China expresses concern following EU legislation restricting foreign investment

China expressed serious concern on Friday after the European Union released a new legislative proposal imposing restrictive conditions on foreign investment in several emerging strategic industries, warning that the measures could create investment barriers and undermine fair competition, according to China's Ministry of Commerce.

The European Commission unveiled the Industrial Accelerator Act on Wednesday, introducing a series of restrictive requirements for foreign investors in four sectors — batteries, electric vehicles, photovoltaics, and critical raw materials.

The legislation includes provisions related to technology transfer, foreign ownership ratios, local content requirements, and local employment, while also emphasizing a "EU-made priority" principle in public procurement, a spokesperson for the Commerce Ministry said in a statement.

Such provisions constitute serious investment barriers and institutional discrimination and may violate the most-favored-nation treatment principle under World Trade Organization rules, the spokesperson said, adding that the move could increase uncertainty for Chinese companies investing in the EU.

China urged the EU to uphold WTO rules and return to a path of fair, transparent, and non-discriminatory cooperation, the commerce official said, noting that protectionism will not enhance competitiveness and could disrupt global industrial and supply chains.

The spokesperson said China will closely follow the EU's legislative process, carefully assess its potential impact, and take necessary steps to safeguard the legitimate rights and interests of Chinese businesses.