Three European Parliament rapporteurs have agreed on a report that would significantly tighten the conditions for foreign direct investment in the European Union, particularly targeting Chinese investors in strategic sectors. The move goes further than the European Commission's original proposal and is set to intensify trade frictions with Beijing.
The report, due to be published on Wednesday, was drafted by Christophe Grudler (Renew, France), Pierre Jouvet (S&D, France), and Anna Cavazzini (The Greens, Germany) in response to the Commission's proposed Industrial Accelerator Act. That legislation, presented last March, aims to create a European preference in public procurement and support schemes, favouring products manufactured within the 27 member states to shield key industries from foreign competition.
According to details obtained by Euronews, the rapporteurs want to impose stricter requirements on investments exceeding €50 million in sectors where China holds a dominant global position—such as electric vehicles, solar panels, critical raw materials, and batteries. This threshold is half the €100 million initially suggested by the Commission.
For any investment above that level, an investor from a country controlling at least 40% of the global market share in the sector would have to meet six conditions: hold no more than 49% of the target company's share capital; form a joint venture with an EU entity; transfer technology to European partners; ensure at least 60% of the workforce consists of EU workers; reinvest at least 1% of annual revenue into R&D within the EU; and source at least 30% of manufacturing inputs from inside the bloc.
The rapporteurs have also expanded the scope to include wind power, electrolysers, and heat pumps, where investors would need to satisfy at least three of the six conditions. This broader coverage signals a more assertive stance than the Commission's initial proposal.
A signal to Beijing
The report is widely seen as a direct message to China, which has repeatedly threatened retaliation against the EU's efforts to reduce its dependence on Chinese supply chains. The timing is sensitive, as Brussels is engaged in ongoing trade negotiations with Beijing, and the investment rules have become a central point of contention.
China's recent export surge, driven by autos and technology, has heightened concerns in European capitals about market access and industrial competitiveness. The rapporteurs' stricter conditions are intended to protect European industries while still allowing some foreign participation under tightly controlled circumstances.
The report also restricts access to public procurement and public support schemes to products made in the EU. The Commission would only be able to extend these benefits to non-EU countries under strict conditions, such as guaranteeing reciprocal access for European firms to foreign public procurement markets.
This has sparked intense lobbying from EU partners like the United Kingdom, which argue that their value chains are too intertwined with the EU's to be excluded. They have pushed for their products to be recognised as 'made in Europe' to maintain market access.
The rapporteurs' report will now need to be adopted by the full Parliament before negotiations with EU member states on the final legislation can begin. The outcome will shape the bloc's industrial policy for years to come, and the stakes are high as Europe seeks to balance economic security with openness.
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