China expressed concern yesterday over a proposal by European Commission chief Jean-Claude Juncker to limit its ability to buy up European companies in the infrastructure, hi-tech manufacturing and energy industries.
In the European Union's equivalent of a U.S. president's State of the Union address last week, Juncker presented proposals for an investment screening framework.
It aims to give EU members a tool to intervene in cases of foreign direct investment in strategic assets, in particular if carried out by state-controlled or state-financed enterprises.
Chinese Foreign Ministry spokesman Lu Kang said the EU had for a long time been promoting free trade and making investment easier, which have brought real benefits to European nations.
Closing the door will not achieve lasting development, he added.
"Practicing trade and investment protectionism for short-term interests, from a long-term perspective, the losses will outweigh the gains," Lu told a daily news briefing.
He urged the European Union to respect World Trade Organisation (WTO) principles, especially non-discriminatory principles, in any measures it adopted.
It must "avoid putting out wrong, confusing and negative information to the outside world," he added.
In June, French President Emmanuel Macron urged the Commission to build a system for screening investments in strategic sectors from outside the bloc.
In July, Germany became the first EU country to tighten rules on foreign corporate takeovers following a series of Chinese deals giving access to Western technology and expertise.
France already has national legislation in place to block such deals in certain sectors, such as energy and telecoms.
Last year's purchase of German robotics maker Kuka by Chinese company Midea raised concerns that China was gaining too much access to key technologies while shielding its own companies from foreign takeovers.