Q: On March 4, the European Union released the Industrial Accelerator Act (IAA), which imposes a series of restrictive requirements on foreign enterprises investing in four emerging strategic industries. What is MOFCOM’s comment on this?

A: China has taken note of the relevant legislation released by the EU on March 4. The act establishes restrictive clauses targeting foreign investment in battery, electric vehicles, solar PV, and critical raw materials, including requirements for technology transfer, cap on foreign ownership, local content rules for products, and local employment. These restrictions apply exclusively to investors from third countries that account for more than 40% of global production capacity in these sectors. Furthermore, the act explicitly prioritizes a “Union Origin” policy in public procurement. These measures constitute serious investment barriers and institutional discrimination. They are suspected of violating the Most-Favored-Nation (MFN) treatment principle and will further increase uncertainty for Chinese enterprises investing in the EU. China expresses serious concern over these measures.

China holds that, under the pretext of developing its own industries and promoting green transition, the EU is building walls and barriers and engaging in protectionism. Such actions will not only prove counterproductive but will also undermine rules, distort fair competition, and disrupt global industrial and supply chains.

It has been proven by practice that protectionism cannot enhance competitiveness, and only openness and cooperation are the right path for development. As important economic and trade partners, China and the EU share broad common interests and have achieved positive results in cooperation on addressing climate change and promoting green transition. We call on the EU to take the lead in following WTO rules and to return as soon as possible to a path of cooperation that is fair, transparent, and non-discriminatory, rather than going further down the road of undermining rules and practicing protectionism. China will closely follow the relevant legislative process, carefully assess its impact on Chinese interests, and resolutely safeguard the legitimate rights and interests of Chinese enterprises.