China has issued a stern warning to the European Union, threatening retaliatory measures if Brussels moves forward with proposed industrial law that Beijing deems discriminatory. The Chinese Ministry of Commerce claims the legislation introduces severe investment barriers and institutional discrimination against foreign firms.
Beijing expressed “grave concern” regarding the project, which it argues imposes restrictive requirements on foreign investment within four strategic sectors: batteries, electric vehicles, photovoltaics, and critical raw materials. The ministry highlighted clauses favoring “EU-origin” products in procurement as particularly problematic.
According to the ministry, the proposal could violate fundamental trade principles, including “most-favored-nation” status and “national treatment.” Furthermore, China claims the law contradicts international agreements on tariffs, intellectual property, and subsidies, potentially harming the European green transition.
Beijing has urged Brussels to remove provisions considered discriminatory to foreign investors, specifically those related to local content requirements, forced technology transfers, and restrictions on public procurement. They argue these measures undermine fair competition and dampen Chinese investment expectations in Europe.
Read more about this topic: Beijing threatens EU retaliation over sanctions on Chinese firms (with video)
The ministry warned that it will closely monitor the legislative process. Should the European Union ignore these observations and enact norms that harm Chinese companies, the ministry stated that Beijing would be left with no option but to adopt necessary countermeasures to protect its interests.
The European Commission presented the project in March as a key pillar of its strategy to reindustrialize the continent. The goal is to reduce dependencies on external powers like China and the United States by requiring minimum European production levels for public support eligibility.
This warning adds to mounting friction between the two powers, fueled by ongoing disputes over Chinese electric vehicles, cybersecurity, and sanctions related to Russia. It follows recent Chinese sanctions against several European aerospace and defense firms, deepening the commercial rift.
