BRUSSELS — Beijing is ready to hit back at the European Union if it passes legislation boxing Chinese businesses out of the single market, a senior trade official has said.

Europe’s increasingly muscular industrial policy is provoking Beijing, which has itself long hewed to a policy of state intervention at home. At a rare press event at the Chinese embassy in Brussels on Wednesday, officials spoke out against proposed EU rules that would bar Chinese firms from bidding for public contracts or equipping critical networks.

“If the European side insists on adopting these proposals, and treats Chinese companies in a discriminatory manner, China will have to take countermeasures,” said Suo Peng, minister for trade at the Chinese mission to the EU. “We hope the EU side will not underestimate China’s firm resolve to safeguard our national interests.”

The Industrial Accelerator Act would require European governments to buy either within the EU or from “trusted partners” with whom the bloc has trade agreements; that doesn’t include China. Governments are big spenders, with public procurement accounting for some 14 percent of all economic activity within the EU.

The industry bill, which is still being negotiated by EU institutions, would also set tough screening rules that are aimed at Beijing in all but name. Investments above €100 million from countries accounting for a 40 percent share of production in key sectors — like batteries, electric vehicles, solar panels and critical raw materials — must meet requirements on shared ownership, technology transfers and local research spending.

China has an outsized manufacturing footprint in all those sectors.

Beijing displayed its retaliatory power last year when it throttled exports of critical minerals in response to a hike in U.S. tariffs, leading President Donald Trump to reverse course.

One Commission official, who was granted anonymity to speak candidly, was unfazed by Beijing’s recriminations.

“It means we are doing exactly what we need to do,” the official said.

Pierre Jouvet, who has just been named a lead lawmaker on the industry act, took a similar stance. The French Socialist lawmaker traveled to China this month with a parliamentary delegation to discuss Chinese online retailers like Shein and Temu, which face a crackdown for selling unsafe or illegal goods in the EU.

“The Chinese government’s attempt to exert pressure shows, if any proof were still needed, that Europe is on the right track with this proposal,” he said, adding that the industry act could help “reindustrialize the continent.”

China shock

China’s transition from its Maoist-era planned economy to state-led capitalism has driven an unprecedented boom that has lifted 800 million people out of poverty.

Historically, the Chinese Communist Party required foreign investors to share technological know-how with their local partners, helping the country develop world-beating industries such as batteries and electric vehicles. In that sense, the EU’s own Industrial Accelerator Act mirrors Beijing’s playbook.

But China’s protests come against a backdrop of mounting tensions.

The two sides traded boycotts over the weekend after the EU expanded its sanctions against Russia to include Chinese companies suspected of aiding President Vladimir Putin’s war on Ukraine. Beijing responded by banning seven European defense firms from doing business in China, citing their sales of weapons to Taiwan.

Cybersecurity tensions

Adding to the trade tensions is the EU’s draft Cybersecurity Act, which is intended to strengthen the security of tech supply chains.

The EU is preparing tougher, binding measures for telecoms operators to reduce their use of Chinese tech champion Huawei, and plans similar interventions in areas including energy systems, security equipment, medical devices and more.

Brussels is targeting “high-risk” vendors — commonly understood to be Chinese suppliers in critical sectors. The proposed rules set new criteria for European governments when deciding to ban vendors from their networks, including assessing “non-technical risks” like whether companies are subject to political pressure.

China’s Commerce Ministry said this month that “the proposal is a typical unilateral and protectionist measure,” adding in published comments that “If the EU clings to the wrong path, China will act decisively and take all necessary measures to defend China’s legitimate rights and interests.”

Brussels has previously tried to wean telecoms operators off Chinese vendors like Huawei and ZTE, but national governments dragged their feet, fearing retaliation from Beijing.

The diplomatic temperature between Brussels and Beijing remains icy for now, but senior EU officials show little inclination to escalate. Industry Commissioner Stéphane Séjourné, who is overseeing the industry act, recently said the EU wasn’t following Washington’s hard line on China, and maintained the bloc was open to Chinese investment.

China’s Commerce Minister Wang Wentao has meanwhile been invited to Brussels by EU trade boss Maroš Šefčovič. One person familiar with the matter said Wang could visit in late June or early July.

Commission President Ursula von der Leyen has called for a strategy debate on China with her fellow commissioners on May 29. Policymakers are expected to discuss whether the bloc needs new trade defense instruments to protect itself against Chinese commercial encroachment, as well as ways to keep communication open with Beijing.