Adam Maguire

So batteries is one example, which would absolutely apply to China.

And in those cases, this Act says that

Any company looking to invest in those kind of particular areas, say setting up a factory here, would need to partner with a local company.

They'd need to share their technology with them, commit to having at least half of the employees European and so on.

And China is specifically saying these kinds of requirements would breach World Trade Organization rules and also global agreements around intellectual property if you have to hand over your technology as part of investment.

So what are they going to do about it?

Well, in its submission on the proposal, China does say it's willing to negotiate with the EU in relation to this.

But if it's ignored, it would have no choice but to bring in countermeasures.

It doesn't specify what that means, although we've already seen some kind of trade skirmishes between the EU and China in recent years.

So, for example, China has opened up investigations into some areas where Europe exports a lot to China, like pork, for example, certain drinks like wine and brandy, and clearly trying to suggest that we could just cut off the market there.

So,

They could make it more expensive for European companies to sell products into China, which would be very significant to some firms, particularly German car makers sell a lot of cars in China.

Last year, there was close to 200 billion euro worth of goods exported from the EU to China.

So a lot of money there.

But as we've discussed, Europe is heavily dependent on other countries, including China, for a lot of products.

And another weapon China might have is to restrict their supply of goods to the EU, the likes of electronics and textiles, which would have a huge impact on businesses and consumers here.

So China, open arms, but a bit hypocritical, is it?

Yeah, I mean, that European proposal to require certain foreign investors to partner up with a local firm is heavily inspired by a rule China has had itself for many years.

The reason why you can buy a Volkswagen or a BMW or a Fiat in China is because those European manufacturers created joint ventures with Chinese manufacturers and as part of that they had to share their intellectual property and their expertise.

So Europe would say they're proposing simply to do the same thing China has done for decades.