BUSINESS

China Warns EU of Retaliation Over Proposed Green-Tech Investment Curbs

Published: Apr. 28, 2026 12:31 a.m. GMT+8

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China’s Ministry of Commerce said Monday that it had submitted formal comments to the European Commission on Friday expressing “serious concerns.”

China warned the European Union it could retaliate over a proposed industrial law that would impose strict local-manufacturing requirements and investment barriers in key green-technology sectors, escalating trade tensions between the two economies.

The dispute over the EU’s Industrial Accelerator Act, or IAA, highlights deepening friction between China and the bloc and could complicate plans by Chinese electric-car and battery makers to build factories in Europe to sidestep recently imposed tariffs.

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China warns EU of countermeasures over proposed Industrial Accelerator Act (IAA), citing discriminatory local-content and investment barriers in batteries, EVs, photovoltaics, and raw materials.
IAA mandates "EU-made first" procurement, prescreening investments >€100M from high-capacity nations like China, with conditions like 50% local staff and 49% foreign equity caps.
Aims to raise EU manufacturing GDP share to 20% by 2035 from 14.3% in 2024; divides bloc, impacts Chinese EV factory plans post-2024 tariffs.

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Who’s Who

Chery Automobile Co. Ltd.: Chery Automobile Co. Ltd. has accelerated plans to build local production capacity in Europe since the EU imposed anti-subsidy tariffs on Chinese-made electric vehicles in October 2024, aiming to sidestep these tariffs amid the proposed Industrial Accelerator Act's restrictions.

XPeng Inc.: XPeng Inc. has accelerated plans to build local production capacity in Europe to sidestep EU anti-subsidy tariffs on Chinese-made EVs imposed in October 2024. The proposed EU Industrial Accelerator Act could complicate these efforts with strict local-manufacturing and investment requirements.

Guangzhou Automobile Group Co. Ltd.: Guangzhou Automobile Group Co. Ltd. is among Chinese automakers, including Chery, XPeng, BYD, and Leapmotor, accelerating plans to build local production capacity in Europe to sidestep EU anti-subsidy tariffs on Chinese EVs imposed in October 2024.

BYD Co. Ltd.: BYD Co. Ltd. has accelerated plans to build local production capacity in Europe since the EU imposed anti-subsidy tariffs on Chinese-made electric vehicles in October 2024, aiming to sidestep the tariffs.

Zhejiang Leapmotor Technology Co. Ltd.: Zhejiang Leapmotor Technology Co. Ltd. is accelerating plans to build local production capacity in Europe to sidestep EU anti-subsidy tariffs on Chinese-made EVs imposed in October 2024.

Roland Berger: Roland Berger is a consulting firm. Zheng Yun, its global senior partner and head of Asia auto practice, stated the EU’s proposed Industrial Accelerator Act could impact Chinese carmakers’ European plants/expansions. Local R&D, staffing, and procurement rules are feasible, but equity caps and tech transfers pose challenges. China remains committed to Europe for scale; EU may moderate provisions. (62 words)

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