Made in the EU with Chinese characteristics
In March, the European Commission proposed the Industrial Accelerator Act. The act aims to streamline permits, set ‘Made in EU’ content rules for low-carbon technologies, and designate industrial zones for manufacturing. It is a clear example of ‘low-carbon industrialism’, where states actively reconfigure production processes through regulation, rather than aiming to correct market failures. Moreover, the IAA clearly shows that China is increasingly the model for economic policies.
Start with production. The Act aims to ensure Europe has a manufacturing base for low-carbon technologies. They acknowledge that Europe has become too dependent on China for batteries, wind turbines, and solar panels; therefore, energy storage systems must be assembled in the EU. For example, wind turbines need at least one – later on two – main components sourced from the EU, and solar inverters have to be made in Europe. This clearly breaks with the neoliberal instinct to let global production networks sort themselves out through cost efficiency. Instead, the European Commission is specifying, component by component, what counts as European production – and using procurement and support schemes to make that specification stick from 2029 onward. The European Commission has, of course, a long history of protectionism, but under low-carbon industrialism this tendency is becoming more dominant and overt, at the cost of efficiency and market logic.
Then there’s regulation. The Act links its own low-carbon thresholds for steel, cement, and aluminum to the EU’s carbon Border Adjustment Mechanism, letting verified CBAM data on imports stand in for domestic emissions accounting. That may seem like a technical detail, but it shows that trade policy and industrial policy are tied to a regulatory instrument that aims to protect the EU's economy. This is a case of lawfare: the strategic use of trade rules to protect a state's interests. The IAA goes further with new foreign investment screening for critical raw materials – extraction, processing, and recycling – requiring investors from countries with over 40% of global manufacturing capacity – in other words, China – to meet conditions like majority EU ownership, joint ventures, or sourcing 30% of inputs from within the EU.
Lastly, space. The IAA requires every member state to designate at least one industrial manufacturing acceleration area within a year. This area is a fast-tracked industrial zone with an aggregated baseline permit, so companies building strategic factors do not have to negotiate every layer of authorization separately. These areas are meant to concentrate global production networks, support SMEs, and come bundled with skills and workforce training. This shows that low-carbon industrialism should be understood as a process unfolding on multiple scales: global, national, regional, and local.
Ironically, the IAA is a defensive response to China's capacity to dominate industries such as EV batteries and solar panels. But the policies and laws chosen reflect China’s own industrial strategies: mandating domestic sourcing, joint ventures with foreign companies to transfer knowledge, and special economic zones. Maybe even pushing industry to 20% of GDP resembles Beijing’s five-year plans. This shows that the world’s economic and political relations are shifting; categories like the Global North and South were already problematic but make less and less sense. A new world order – or orders – is emerging.
