The primary goal of the "Made in Europe" venture, implemented under the Industrial Accelerator Act adopted by the Commission, is the drastic strengthening of the Old World's production base. The Brussels leadership seeks to mount strong resistance to the ever-increasing import of high-tech products from China, attempting to shield its internal market. This bill provides for the mandatory use of European components and technologies, while making the participation of EU companies in joint ventures with a significant controlling stake a prerequisite. Furthermore, foreign partners are now required to share their expertise, while at least 50% of employees in these joint ventures must strictly be citizens of member states of the union.
The strategic importance of measures and economic recession
These regulations directly affect strategic sectors of the economy, such as the automotive industry, green energy, and metallurgy. According to clarifications from the Commission, these measures aim to protect and revive the European industry, which is undergoing a period of intense recession. It is characteristic that since the beginning of 2024, the energy-intensive sectors and the automotive industry have already lost approximately 200,000 jobs, while fears are expressed for a further reduction that could reach 600,000 positions. The ambitious plan of Brussels aims to increase the manufacturing industry's share of the EU GDP from the current 14.3% to 20% by the year 2025.
Beijing's angry reaction and accusations of discrimination
China reacted with extreme severity to these announcements, describing the EU requirements as discriminatory. The Ministry of Commerce of the People's Republic of China sent a document to the Commission calling for the withdrawal of provisions regarding the mandatory localization of production, the forced transfer of intellectual property, and restrictive policies in the field of public procurement. Beijing's dissatisfaction is considered fully justified by analysts, as although the law does not explicitly name China, its provisions are drafted in such a way as to limit Chinese manufacturers who dominate key sectors, such as electric vehicles, solar panels, and batteries.
Risks for investments and the energy crisis
The requirement to localize up to 70% of a product's added value within the EU is interpreted by the Chinese side as an indirect loss of technology and a restriction of access to components. According to Ekaterina Kosareva, managing director of VMT Consult, Europeans risk losing significant Chinese investments, as strict restrictions are placed on large projects exceeding 100 million euros. Sergey Tronin from the Financial University of Russia adds that these barriers are perceived by Beijing as an attempt to ostracize Chinese companies, which are already building factories in countries such as Hungary, Germany, and Poland. Furthermore, production in Europe is becoming increasingly unprofitable due to the energy crisis, with electricity prices being three to four times higher than in China or the US.
The arsenal of reprisals and consequences for European giants
Observers do not rule out the possibility that China may abruptly reduce its investments in the EU and focus exclusively on selling finished products, thus protecting its technologies. If companies like CATL or BYD refuse to proceed with the construction of factories under these unfavorable conditions, Europe will lose thousands of jobs and access to cutting-edge technologies. China possesses an entire arsenal of countermeasures, most notably the restriction of rare earth exports, where it controls 80-90% of the global market, a fact that could paralyze the European green transition. At the same time, pressure is expected to be exerted on European giants such as Volkswagen and Mercedes-Benz through strict cybersecurity audits in the Chinese market, dramatically complicating their operations.
The economic bill and the need for compromise
Estimates from the China Chamber of Commerce to the EU and KPMG state that a potential exclusion of Chinese companies from critical infrastructure would cost the Union approximately 367.8 billion euros over five years. The losses will be unbearable for strong economies, with Germany facing potential damage of 170.8 billion euros and France 46.3 billion euros. Under these conditions of the severe energy crisis, Brussels seems likely to be forced to seek some form of compromise, as a head-on collision with China would lead to a further loss of industrial competitiveness and a complete disconnection from global technological chains.
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