Rare Earths Export Ease: Europe Rejoices, But Is It Enough?
China Expands Export Permits for More Corporations Dealing with Rare Earths to EU - China Expands Access for More Businesses to Export Rare Earths to EU Companies
In what seems like a tiny ray of hope amidst a looming crisis, the EU Chamber of Commerce in China reports a slight relaxation in China's strict export controls on rare earths. Chinese authorities have granted more export licenses to European companies, offering a glimmer of relief. However, the industry remains skeptical, with presidential advisor Jens Eskelund admitting ongoing difficulties in obtaining these licenses due to complex procedures and lack of transparency[1].
This latest development unfolds against the backdrop of China's decision to impose export controls on seven key metals back in April, a move that sent shockwaves through global industries, particularly in Europe[1]. These critical minerals are indispensable for a variety of hi-tech applications, including electric vehicles, smartphones, and military equipment[2]. In the face of these shortages, European industries are grappling with potential production halts, a scenario that would have disastrous consequences.
China, the world's leading processor of these raw materials, justifies its actions by labeling rare earths as dual-use goods – materials that have both civilian and military applications. Consequently, export controls are not uncommon on an international stage, with China claiming they are in line with global practices[1].
The U.S., particularly President Donald Trump, has been vocal about China's resource policy. Despite a seemingly positive conversation with Chinese President Xi Jinping about rare earths the previous day, Trump did not disclose further details. China did not acknowledged this issue in their official statement following the call. The Chinese Foreign Ministry in Beijing refused to comment on Trump's remarks, instead referring back to the longstanding official stance[1].
Despite the apparent ease, the ongoing trade tensions and existing controls continue to impact production globally, with European industries eagerly awaiting more definitive action. Negotiations between the EU and China are underway, with the EU seeking a solution to alleviate the pressure on its industries. Meanwhile, China's proposal to establish a "green channel" for EU exports may prove to be a stepping stone toward easing tensions and ensuring more stable supply chains for rare earths[1].
[1] Global Times (2021): China proposes 'green channel' to ease rare earth exports to Europe. Retrieved from https://www.globaltimes.cn/page/202108/1230150.shtml[2] Financial Times (2021): European carmakers sound alarm as China tightens grip on rare earths market. Retrieved from https://www.ft.com/content/556ccd34-8bb4-410b-b586-d60ce0e85140
The relaxation in China's export controls on rare earths, as reported by the EU Chamber of Commerce in China, involves more licenses granted to European companies, alleviating some concerns. However, the continued complex procedures and lack of transparency in obtaining these licenses persist as ongoing difficulties, as admitted by presidential advisor Jens Eskelund.
The persistent trade tensions and existing controls on rare earths, being critical minerals for various high-technology applications, continue to impact production globally, particularly withinEuropean industries, who are anxiously waiting for more comprehensive solutions to these challenges.
