China has announced a sweeping new industrial policy aimed at consolidating its dominance over global green energy supply chains, from rare earth minerals to finished solar panels and electric vehicle batteries.

The plan, released by the State Council on Thursday, outlines $200 billion in subsidies and tax incentives over the next five years, targeting key sectors including lithium processing, battery manufacturing, and wind turbine production.

“China is positioning itself not just as the world’s factory, but as the indispensable link in every clean energy value chain,” said Dr. Li Wei, an energy policy researcher at Tsinghua University.

The announcement has drawn immediate concern from European and American policymakers who have been working to diversify supply chains away from Chinese dependence, particularly following disruptions during the COVID pandemic.

EU Trade Commissioner Valdis Dombrovskis called for an “urgent reassessment” of the bloc’s critical minerals strategy in response to the announcement.