T

he EU's chief announced ambitious plans Tuesday to challenge China and the United States in the race for clean-tech industries, as a battle over green trade emerged at the World Economic Forum.

European Commission President Ursula von der Leyen slammed what she described as "aggressive attempts" to convince Europe's clean technology operations to relocate to China through cheap labour and more lenient regulations.

"China heavily subsidies its industry and restricts access to its market for EU companies," she said, warning that the EU would "not hesitate" to investigate such aid that distorts the market.

"We want to cooperate, we want to work together, climate change needs a global approach, but it has to be a fair approach and a level-playing field," she told the world's global political and business elite at the annual meeting in the Swiss Alpine village of Davos.

She also renewed European concerns over the US Inflation Reduction Act, a climate subsidy package worth around $370 billion, though she said both sides have been working to find "solutions" that could include allowing EU-made electric cars to 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," she said.

The week-long forum is taking place under the theme of "cooperation in a fragmented world" as the planet faces a perfect storm of crises -- Russia's invasion of Ukraine, soaring inflation, the spectre of recession and climate catastrophes.

But tensions between world powers still emerged at the meetings in Davos.

- 'Cold War mentality' -

Speaking after von der Leyen, Chinese Vice Premier Liu He called for an end to "Cold War mentality" and repeated Beijing's opposition to "unilateralism and protectionism".