The European Commission’s proposed Industrial Accelerator Act (IAA), aimed at strengthening domestic industry and accelerating the adoption of clean technologies, has drawn sharp criticism from China, which warned the draft could lead to retaliatory measures.
Unveiled in early March and still under review, the IAA is designed to boost manufacturing, support corporate growth, and create jobs within the European Union. The legislation also seeks to promote cleaner industrial processes, with potentially significant implications for sectors such as automotive, batteries, and renewable energy.
Key provisions in the draft include new requirements for public procurement and subsidy programs, introducing criteria tied to carbon emissions and “Made in EU” sourcing. For large-scale investments exceeding €100 million in strategic industries, additional rules would apply if a single non-EU country controls more than 40% of global manufacturing capacity—a clause widely seen as targeting Chinese-linked operations in Europe, including battery manufacturing.
Despite these measures, the EU has emphasized it does not intend to close its market. Officials have said the bloc aims to remain “one of the world’s most open markets” while seeking “greater reciprocity in public procurement,” meaning foreign companies would receive equal access only if their home countries offer similar conditions to European firms.
China’s Ministry of Commerce of the People’s Republic of China formally responded to the draft on April 24, raising concerns over what it described as discriminatory elements. According to a report by Handelsblatt, Beijing argued that the proposed legislation creates “significant investment barriers and institutional discrimination” in strategic sectors including electric vehicles, batteries, photovoltaics, and critical raw materials.
Chinese authorities outlined three main objections, stating the draft law violates certain international agreements, discriminates against Chinese investors, and risks undermining the EU’s own green transition while distorting fair competition.
Beijing called on the EU “to remove discriminatory requirements against foreign investors, local content requirements, mandatory intellectual property and technology transfer requirements, and public procurement restrictions from the legislation,” according to Agence France-Presse.
China also warned of potential retaliation if its concerns are not addressed. It said it would be “forced to take countermeasures” should the EU proceed with the law in a way that harms Chinese companies’ interests.
The warning follows Beijing’s recent introduction of new legal tools aimed at safeguarding its industrial and supply chain security, including Regulation No. 834, as well as measures designed to counter what it describes as unlawful extraterritorial jurisdiction by foreign governments.
