EU's Industrial Accelerator Act targets Chinese tech investments with strict conditions

Major EU members offered qualified support for the bloc's flagship Industrial Accelerator Act (IAA) during Thursday's competitiveness council debate, accepting its broad parameters while quibbling over red tape, timescales, and openness to non-EU members. The proposed legislation, introduced in March, is described as a 'reverse Deng' — reversing China's own playbook of forced technology transfers and joint ventures that helped fuel its economic rise. Under the IAA, foreign companies investing in sectors like electric vehicles and batteries would be required to establish joint ventures with local European partners, transfer technology and know-how, conduct research and development locally, and adhere to strict supply-chain regulations.

Supportive member states — including Germany, France, Italy, Spain, the Netherlands, and Poland — warned that the urgency of the crisis facing EU industry leaves no room for delay. The act represents a significant shift in EU industrial policy, aiming to protect strategic sectors from being dominated by Chinese companies that benefit from state subsidies. Critics argue the measure could deepen tensions with Beijing and reduce investment flows, but proponents believe it is essential to prevent Europe from becoming a 'museum' of obsolete industries. The final shape of the IAA is still under negotiation, with details on implementation timelines and the extent of conditions to be finalized in coming months.