EU chief Ursula von der Leyen took China to task over clean-technology industries yesterday, threatening investigations over Beijing's subsidies in the sector.

In a speech to the World Economic Forum Davos, Switzerland, Von der Leyen announced plans for a “sovereignty fund” and a “Net Zero Industry Act” to defend Europe's industrial base from massive US and Chinese subsidies.

“We see aggressive attempts to attract our industrial capacities away to China and elsewhere,” von der Leyen told the world's global political and business elite at their annual meeting in the Swiss Alpine resort.

“China heavily subsidies its industry and restricts access to its market for EU companies,” she said.

“We will not hesitate to open investigations if we consider that our procurement or other markets are being distorted by such subsidies.”

Von der Leyen also renewed European worries over the US Inflation Reduction Act, a climate subsidy package worth around $370 billion.

Our aim should be to avoid disruptions in transatlantic trade and investment

“It is no secret that certain elements of the design of the Inflation Reduction Act raised a number of concerns in terms of some of the targeted incentives for companies,” she said.

“This is why we have been working with our US friends to find solutions,” the European Commission president said, adding that European firms and EU-made electric cars could also benefit from the act.

“Our aim should be to avoid disruptions in transatlantic trade and investment. We should work towards ensuring that our respective incentive programmes are fair and mutually reinforcing.”

At a separate event earlier in the morning, US climate envoy John Kerry said countries complaining about the act should instead try to imitate the United States.

“The reaction of other countries shouldn't be, 'oh my god, you shouldn't be doing that, that's putting us in an unfair position'. Do it, too. Everybody's got to do the same thing to accelerate this process even more,” Kerry said at a panel discussion on boosting philanthropic involvement in climate change.