Beijing says the EU’s proposed Industrial Accelerator Act would create investment barriers for Chinese companies in batteries, electric vehicles, solar technology and critical raw materials, warning of countermeasures if the legislation is adopted without changes.
China has warned that it may take countermeasures if the European Union proceeds with its proposed Industrial Accelerator Act in its current form, adding a further point of tension to an already strained trade relationship between Brussels and Beijing.
In a statement issued on Monday, China’s Ministry of Commerce said the proposed EU legislation would create “serious investment barriers” and “institutional discrimination” against foreign investors. Beijing said it had formally submitted comments to the European Commission on 24 April, setting out its objections to the draft law and calling for several provisions to be removed.
The dispute centres on the EU’s Industrial Accelerator Act, presented by the European Commission on 4 March. The proposal is designed to strengthen European industrial capacity in strategic sectors, support lower-carbon manufacturing, and increase demand for products made in Europe. It forms part of a wider EU effort to reduce external dependencies in key supply chains while maintaining competitiveness in sectors exposed to global industrial policy and state-backed competition.
The Commission has described the measure as a way to support manufacturing, create jobs and accelerate industrial decarbonisation. The draft proposal covers strategic areas including batteries, electric vehicles, photovoltaics and critical raw materials. It also includes measures related to public procurement, public support schemes and conditions for certain foreign investments in sectors regarded as central to Europe’s industrial resilience.
Beijing’s objection is that the proposal moves beyond industrial support and into discrimination against non-EU firms. In its 27 April statement, China said the Act would impose restrictive requirements on foreign investment in four strategic emerging industries: batteries, electric vehicles, photovoltaics and critical raw materials. It also objected to EU-origin clauses in public procurement and public support policies.
China argued that the proposed rules may conflict with principles including most-favoured-nation treatment and national treatment. It also said the measures could affect the investment expectations of Chinese companies operating in Europe, slow the EU’s green transition, and undermine fair competition within the European market.
The statement called on the EU to remove requirements that Beijing views as discriminatory, including local-content rules, mandatory intellectual property or technology-transfer requirements, and procurement restrictions. China said it was prepared to continue dialogue with the EU but warned that, if the legislation were adopted in a way that harmed Chinese corporate interests, it would respond with countermeasures.
The EU proposal reflects a broader shift in Brussels towards a more interventionist industrial policy. The Commission has said the draft law is intended to help European manufacturers compete in sectors where global competition is intense and where supply-chain vulnerabilities have become a policy concern. The legislative file remains subject to approval by the European Parliament and member states before it can enter into force.
The disagreement also comes against the background of wider EU-China trade friction. Brussels has been seeking to balance market access, industrial competitiveness and economic security, particularly in areas linked to clean technology. China remains a major producer and exporter of batteries, solar panels, electric vehicles and processed critical materials, making any EU local-content or procurement preference commercially significant.
For the EU, the policy question is whether European public money should be used to strengthen domestic industrial capacity in sectors considered strategically important. For China, the concern is that such measures could restrict market access for firms that have already become central players in clean-technology supply chains.
The dispute is likely to intensify as the proposal moves through the EU legislative process. Member states will have to assess whether the economic and security arguments for stronger European content requirements outweigh the risk of higher costs, possible retaliation and further disruption in EU-China commercial relations.
For Brussels, the challenge will be to defend industrial resilience without creating rules that are seen by trading partners as protectionist. For Beijing, the warning signals that China is prepared to contest EU industrial policy where it believes Chinese companies are being targeted.
The immediate significance of Monday’s statement is not that countermeasures have been announced, but that China has formally placed the issue on the EU-China trade agenda. That gives the Industrial Accelerator Act a geopolitical dimension beyond its stated industrial and climate objectives, and makes it one of the next files to watch in the relationship between Europe’s economic security agenda and China’s position in global clean-technology markets.
