China has threatened the EU with "countermeasures" if Chinese companies are harmed by the bloc's proposed Industrial Accelerator Act, a law designed to boost European manufacturing and shield it from cheaper imports. Beijing's commerce ministry said the legislation would discriminate against Chinese investors and violate basic market economy principles including commercial voluntariness and fair competition.

The EU aims to raise manufacturing's share of GDP to 20% by 2035, up from 14.3% last year. The law targets foreign investments over €100mn in strategic sectors including batteries, solar panels and nuclear power. It requires at least 50% of workers be EU-based and mandates technology transfers to European partners. This represents the EU's most aggressive move yet against Chinese high-tech imports, particularly in the automotive sector.

China's trading partners argue that Beijing generates record trade surpluses by over-subsidizing production, flooding foreign markets and deindustrializing local manufacturing. The OECD estimates Chinese manufacturers receive subsidies three to nine times higher than those available to rich-world competitors. Beijing rejected claims of overcapacity and warned the EU to remove "discriminatory requirements against foreign investors" or face retaliation. The proposals must be negotiated with member states and the European Parliament before becoming law.