In the 1980s, China wanted to catch up with the global economy. It then imposed strict conditions on European and American companies wishing to establish themselves on its soil. They had to transfer technologies to Chinese workers by training them and buying raw materials and equipment from China to access the local market. Forty years later, the rules have reversed.
The European Union, through the Commission, is currently working on a new regulation on industrial acceleration, also known as the “Made in EU” regulation. European preference is widely highlighted to revitalize the Union’s industry. This would have direct and assumed effects on trade relations with China, the Financial Times analyzes.
Context: China imposed strict conditions on foreign companies in the 1980s, but now the EU is focusing on revitalizing its industry with a new regulation, which could impact trade relations with China.
Fact Check: The EU Commission is working on a new regulation on industrial acceleration, not specifically targeted at Chinese investors.
Europe seeks to better regulate Chinese investments on its soil
In other words, to open businesses and factories on European soil, the Chinese would, if the regulation is adopted, have to transfer skills to European workers in return. An idea supported by France. Emmanuel Macron had written in the Financial Times in 2025 that “the EU must remain open to Chinese investments in sectors where it leads, provided that China helps create employment, innovation, and shares its technologies.”
If the regulation under discussion is not explicitly aimed at Chinese investors, it is well known that they tend to come and set up businesses in foreign countries to conduct low-cost businesses without hiring local labor. The regulation would allow member states to veto any direct investment abroad of more than 100 million euros in strategic sectors if the investor comes from a country that owns more than 40% of global industrial capacity.
Context: The regulation being discussed aims to impose restrictions on large foreign investments in strategic sectors if the investor comes from a country with significant industrial capacity.
Fact Check: The regulation covers strategic sectors like batteries, electric vehicles, and materials extraction, including rare earths.
What do the EU member states think of the current European regulation under consideration?
The strategic sectors highlighted by the European regulation include batteries, electric vehicles, solar panels, and processes related to the extraction and processing of critical pure materials, such as rare earths.
If the regulation project pleases some EU member states – including France, which would like it to be more stringent, and Spain, one of the few European countries to have welcomed Chinese investors and companies in recent years – other actors oppose it. German industrialists, especially in the automotive sector, believe that the law is not in favor of Europe.
Context: Some EU member states support the regulation, while others, like Germany, oppose it, believing it would harm Europe’s prosperity.
Fact Check: The automotive sector in Germany is concerned about the potential negative impact of the regulation.
“Less innovation, slower growth, and ultimately a reduction in prosperity in Europe,” Milan Nedeljković, chairman of the BMW board, believes. China, on the other hand, regrets that Europe is “building walls and barriers and resorting to protectionism.”
