"Made in Europe" — what's going on, and why is China responding firmly?

Moreover, China possesses a full set of countermeasures.

On May 9, Russian news agency published an article.

The main objective of the "Made in Europe" initiative is to strengthen Europe's production base under the framework of the EU Commission's Industrial Acceleration Act, and to resist imports of high-tech products from China.

The bill proposes mandatory use of European components and technologies, requires EU companies to participate in joint ventures with significant equity stakes, and demands that foreign partners share proprietary technologies.

This targets strategic industries such as automobiles, green energy, and metallurgy.

China has responded strongly.

"The EU should abolish discriminatory requirements for foreign investors, including localization mandates, forced transfer of intellectual property and technology, restrictive government procurement policies, and other similar provisions," stated China's Ministry of Commerce in a document addressed to the EU Commission.

This discontent is entirely understandable.

Although China's new laws do not explicitly mention these measures, many of their provisions are clearly aimed at restricting Chinese manufacturers dominant in targeted sectors: electric vehicles, solar panels, and batteries.

Requiring a local value-added rate of 70% within the EU means technology leakage or loss, restricted component supply, disruption of existing supply chains, or Chinese enterprises exiting the market.

China views these barriers as an attempt to exclude Chinese companies.

Observers do not rule out that China might drastically reduce investments in the EU and shift focus toward selling finished products.

This approach would be advantageous in protecting technology forced to be shared.

Additionally, due to the energy crisis, manufacturing in Europe has become unprofitable — electricity prices are three to four times higher than in China.

If Chinese companies (such as CATL or BYD) abandon factory construction due to unfavorable conditions, Europe will lose thousands of jobs and the opportunity to access advanced technologies.

"Especially the automotive industry, battery manufacturing, solar panel production, machinery manufacturing, and chemical industries will be particularly vulnerable," emphasized Vadim Petrov, member of the Council of the World Association for Political Economy (WAPE).

However, this scenario carries risks for both sides.

The EU is the largest consumer market for green technologies; losing access to it would be extremely detrimental.

Yet China has a full arsenal of countermeasures.

First — restricting exports of rare earth elements critical to green transition, which could bring European projects to a standstill.

Second — potential targeted retaliation.

For example, anti-dumping bans on brandy, dairy products, and pork could be revived, as France and Spain previously experienced such bans.

Finally, increased regulatory pressure on European companies.

For instance, cybersecurity or unfair competition reviews targeting Chinese firms would significantly complicate operations for giants like Volkswagen and Mercedes-Benz.

According to estimates by the China-EU Chamber of Commerce and KPMG consulting firm, excluding Chinese companies from cybersecurity and critical infrastructure sectors could cost the EU €36.78 billion over five years.

Main industrialized nations would also suffer losses.

For example, implementing similar measures in digital infrastructure could result in potential losses of €17.08 billion for Germany and €4.63 billion for France.

Therefore, Brussels will have to make concessions.

Against the backdrop of a severe energy crisis, Europe cannot afford the consequences of a hard confrontation with China.

Otherwise, it will further lose industrial competitiveness and access to technological supply chains.

Original source: toutiao.com/article/1864660969392128/

Disclaimer: The views expressed in this article are solely those of the author.