(Financial Times Europe, Joe Leahy and Wenjie Ding, Apr 28, 2026)
China has threatened to take “countermeasures” if its companies are harmed by the new European Industrial Accelerator Act, one of the EU’s most ambitious tools to counter low-cost Chinese high-tech imports and revive European manufacturing, aiming to raise the sector’s share from 14.3% to 20% of GDP by 2035. Beijing considers the regulation discriminatory because it imposes restrictions on foreign investments over 100 million euros in strategic sectors, requiring the use of at least 50% EU labor, involvement of local companies, and transfer of technological know-how.
The warning comes as the US and China negotiate a truce in their trade war and Beijing wants to keep channels open with Europe, an important export market. The Chinese Ministry of Commerce harshly criticized the law, arguing that it violates the principles of commercial voluntariness and fair competition, reduces Chinese companies’ investment expectations, and contradicts the consensus reached at the highest levels between Chinese and European leaders on managing divergences.
The European regulation responds to China’s historical practices of mandatory joint ventures and technology transfer, and massive state subsidies (three to nine times higher than Western ones according to the OECD) that have allowed Beijing to accumulate huge trade surpluses and flood foreign markets, deindustrializing rival economies. The EU aims to protect key sectors such as batteries, solar panels, and nuclear from competition perceived as unfair.
Threat of Chinese countermeasures
“China ‘is willing to conduct dialogue and communication with the European side on this matter.’ But if the EU ‘ignores China’s suggestions […], China will have no choice but to adopt countermeasures.’”
Discrimination against Chinese investors
“The law means that Chinese investors ‘will suffer discrimination, which goes against the basic principles of a market economy such as commercial voluntariness and fair competition.’”
Impact on investment expectations
“The law ‘runs counter to the important consensus of Chinese and European leaders on the proper management of frictions and differences, seriously affecting Chinese companies’ expectations for investments in Europe.’”
Response to Chinese technology transfer practices
“The law is seen as the EU’s response to decades of practices in China requiring foreign companies to invest jointly with partners in joint ventures and transfer their technology to local producers.”
EU’s goals against Chinese competition
“The EU aims to increase the manufacturing share of the bloc’s GDP to 20% by 2035, up from 14.3% last year.”
(Excerpt from the newsletter by Giuseppe Liturri)
