The Foundation for Applied Economic Studies (Fedea) has urged the Government to tighten the requirements in light of the arrival of productive capital from China and to link any budgetary support to "executed investment and verifiable milestones," thus avoiding funding mere promises or preliminary announcements.
In an extensive report signed by Judith Arnal on the "China shock 2.0," the think tank defends maintaining an open policy, reminding that Spain is the second largest car manufacturer in the EU without having a large national group of its own.
However, it emphasizes that "openness does not mean unconditional acceptance" nor does it support granting subsidies to projects without clear guarantees of return for the local economy.
To prevent autonomous communities and municipalities from getting caught up in a race for downward incentives, Fedea proposes creating "a unique registry of aids and commitments that allows knowing the total public support, comparing offers, and subsequently verifying their execution."
In the case of large-scale initiatives, the entity also recommends early consultation with the European Commission, in order to reduce the risk that the aids granted by Spain are added to foreign subsidies incompatible with the internal market rules.
Fedea also specifies that "industrial conditions" —linked to employment, training, the use of local suppliers, and the generation of genuine added value versus mere assembly— must be established exclusively through the regulatory bases of public aids and applied equally regardless of the origin of the investor.
Adapting investment control to new plants
In the regulatory field, the study calls for an update of the national investment control framework (screening) to adjust it to the new reality.
The document notes that the current regulation focuses on changes of ownership or control in already existing companies, leaving internal restructurings and expansions of subsidiaries already under foreign control outside of scrutiny.
To close this gap, Fedea proposes to reform the law and expressly incorporate new plant investments (greenfield) and relevant expansions in strategic sectors, establishing clear and predictable thresholds and criteria.
The 'think tank' insists that this instrument must be reserved solely for addressing "specific risks of security, health, or public order," and not become a general mechanism to impose national content or demand technology transfers.
From big announcements to effective investment
The analysis by Fedea emphasizes the gap between investment announcements and their actual materialization. The entity estimates around 14.5 billion euros in Chinese capital operations in Spain since 2019, with a strong concentration starting in 2024.
However, it details that only 1.7 billion corresponds to projects that have already been completed, while 6.1 billion are under construction and 6.8 billion remain pending announcements to be executed. "The relevant variable is not how much is announced, but how much ends up being executed," highlights the report.
In this line, the document clarifies that plants dedicated solely to assembly do not have to be vetoed, but they should not receive the same level of public support as a factory integrated with stamping, welding, and engineering processes developed in Spain.
According to Fedea, when there are subsidies, they must be associated with a verifiable path of industrial integration and the achievement of true "operational autonomy" in licenses, software, and training of the workforce.
The "China shock 2.0" and the risk of retaliation
The report places these proposals in the transition from the "China shock 1.0" —focused on the massive entry of labor-intensive consumer goods— to the "China shock 2.0," in which China competes in the heart of the European industrial fabric (machinery, electronics, chemicals, batteries, and automotive) and raises factories within the EU itself.
Although the exposure index developed by Fedea places Spain in the lower half of the 27 EU partners, far from the risk level of Germany, the Spanish economy presents specific weak points.
China has become, since the first half of 2026, its main supplier, and the bilateral trade deficit hovers around 2.5% of GDP, given that Spain only covers 15.5% of its purchases from China with sales to that market, according to the study.
As Spanish exports to China concentrate on items such as pork —close to 1 billion euros in 2025—, the document warns that the country is vulnerable to "selective trade retaliation" from Beijing.
For this reason, Fedea claims that any commercial defense instrument that the EU promotes should include from the outset a vulnerability analysis and articulate mechanisms of solidarity at the community level to compensate for the damages in the most affected territories or productive sectors.