The 2026 Beijing Auto Show is in full swing, drawing major industry players from Germany, France and Italy, after around 700 Chinese companies appeared at Hannover Messe, the world’s leading manufacturing trade fair which concluded Friday. Yet even as China and EU businesses deepen cooperation, the European Commission (EC) is pressing ahead with protectionism, shaping what analysts call an increasingly “non-level playing field.”
A spokesperson for China’s Ministry of Commerce (MOFCOM) said on Monday that the EU’s Industrial Acceleration Act (IAA) imposes restrictive requirements on foreign investment in four key strategic sectors – batteries, electric vehicles, photovoltaics and critical raw materials – and introduces “EU-origin” clauses in public procurement and support policies, constituting significant investment barriers and institutional discrimination.
The ministry has formally submitted comments to the European Commission, expressing China’s position and serious concerns over the legislation.
In its submission, the spokesperson urged the EU to remove discriminatory provisions targeting foreign investors, including local content requirements, forced technology transfer and intellectual property conditions, as well as restrictions embedded in public procurement policies, while urging the bloc to strictly adhere to WTO rules.
If the EU ignores China’s suggestions and insists on pushing the legislation through, thereby harming the interests of Chinese companies, China will take countermeasures to firmly safeguard its legitimate rights and interests, the spokesperson stressed.
Chinese industry insiders and experts noted that the EU’s approach is shifting from traditional anti-dumping and anti-subsidy measures toward a broader economic security framework, with recent moves framed around security, sustainability and fairness particularly targeting China, increasingly risking reshaping the EU into a more exclusionary and discriminatory market environment.
An insider has previously told the Global Times that the EU’s escalating protectionist measures are already inflicting tangible damage on China-EU economic and trade relations, warning that China possesses ample policy tools and the determination to respond to any further escalation.
A ‘non-level playing field’
The IAA remains under review and still requires approval from the European Parliament and the European Council. However, Chinese experts said the essence and direction of the proposal – excluding Chinese companies from the European market – are already clear.
“The proposal has evident protectionist and targeted features, especially in emerging and strategic sectors, with strong discrimination against Chinese companies,” Jian Junbo, director of the Center for China-Europe Relations at Fudan University’s Institute of International Studies, told the Global Times on Monday.
Jian added that the proposal lacks a solid legal and rational basis, potentially violating key international trade rules such as most-favored-nation and national treatment principles, as well as agreements such as the General Agreement on Tariffs and Trade (GATT) 1994.
The IAA, together with the proposed revision of the Cybersecurity Act (CSA2) earlier this year, forms part of a broader set of EU tools targeting China, adding to previous measures such as the Foreign Subsidies Regulation, the Carbon Border Adjustment Mechanism and the Critical Raw Materials Act.
Previously, MOFCOM submitted comments on the EU’s draft revision of the Cybersecurity Act, stating that it introduces highly subjective “non-technical risk” criteria and could exclude listed countries and suppliers from entire supply chains across sectors such as energy, transport and ICT.
The ministry said this represents “a typical case of politicizing economic and trade issues and overstretching the concept of security.”
Commenting on the Commission’s intensifying rollout of restrictive measures, Jian said the EU’s tightening restrictions across trade, technology and supply chains reflect deeper strategic anxieties, as the bloc faces internal divergence, declining industrial competitiveness and weakening growth momentum.
Shi Xiaoli, director of the WTO Law Research Center at the China University of Political Science and Law, pointed to the limits of the EU’s strategic autonomy. “Under the current geopolitical context, some of the EU’s economic and trade measures are influenced by alignment with US strategies and bloc-based thinking,” she told the Global Times on Monday.
Shi said that while the EU has a strong practical need for economic cooperation with China, US’ pressure has led it to align with certain containment-oriented strategies, including embedding targeted provisions in trade legislation, which do not serve the fundamental interests of the EU and its member states.
The EU’s economic and trade policy toward China is undergoing a dangerous shift from traditional anti-dumping and anti-subsidy measures toward a broader economic security framework, with tangible impacts on the operations of Chinese companies in Europe, industry insiders noted.
Over the past week, the EU has taken a series of steps: invoking the Foreign Subsidies Regulation to require the removal of a Chinese subcontractor from a Lisbon metro project, and including multiple Chinese entities in a new round of sanctions related to Russia.
However, divisions within the EU remain evident. Member states have markedly different interests, as such measures risk undermining mutually beneficial cooperation with China and broader strategic priorities, Shi said, adding that this raises the cost of consensus and fundamentally limits the feasibility of comprehensive “decoupling” from or containment against China.
Previously, regarding the IAA, nine EU countries – including the Czech Republic, Estonia, Finland, Ireland, Latvia, Malta, Portugal, Sweden and Slovakia – have warned that the proposal should be treated with “the highest possible caution,” citing concerns over its impact on prices, supply chains and competition, according to Reuters.
Cooperation demand persists
Amid tightening policies, there are also signs of easing and continued engagement, reflecting the complex and multifaceted nature of China-EU economic relations.
On Friday, MOFCOM announced the removal of countermeasures against two EU financial institutions, after the EU lifted sanctions on two Chinese entities a day earlier.
German Economy Minister Katherina Reiche will travel to China in May to discuss key issues between the two sides, Reuters reported on April 21, citing her remarks. She said that “China remains a large and important market for us.”
Since late last year, some EU countries have shown renewed willingness to deepen engagement with China amid a wave of high-level exchanges. Spanish Prime Minister Pedro Sanchez visited China about two weeks ago, his fourth trip since 2023. Leaders from France, Finland and Germany have also visited China.
Analysts noted that this reflects a more pragmatic approach among some European countries in managing ties with China and advancing cooperation.
However, this pragmatic trend has unfolded alongside growing discussions around the “China shock” in Europe. According to German media outlet Table.Media, the European Commission is set to discuss China policy on May 29, after postponing a mid-April meeting due to the Middle East situation, with a focus on concerns over the so-called “industrial overcapacity” in China.
These parallel developments underscore the dual nature and internal tensions in the EU’s China policy: while Brussels emphasizes regulatory tools and risk control, member states continue to prioritize supply chain stability and business interests, making decoupling from China an unrealistic option, Chinese analysts said.
From a longer-term perspective, Jian cautioned that confrontational and protectionist measures will not enhance the EU’s industrial competitiveness, but may instead delay its green and digital transitions by missing opportunities to leverage China’s advantages.
An insider told the Global Times recently that if the EU continues to escalate protectionist measures, China has a broad policy toolkit. “China is neither unfamiliar with nor afraid of trade frictions,” the insider said, adding that any escalation would harm both sides, disrupt global industrial and supply chains, and weigh on global growth,” the insider said.
As Spanish Prime Minister Pedro Sanchez noted in a speech at Tsinghua University on April 13, interpreting reality in a zero-sum mindset is wrong and dangerous, because “it turns us into prisoners of the past and limits the possibilities that the future offers us.”