Giving European Auto Industry a Boost: China Relaxes Rare Earth Export Restrictions
China softens export policies for crucial rare earth elements
Sit back, relax - the EU auto sector just got a breather! China, the world's biggest processer of rare earths, has shown a tad of mercy to European firms during this ongoing trade spat.
In the latest saga of China's export controls on essential rare earths and magnets, the EU Chamber of Commerce in Beijing announces a budding improvement in the grim situation. Increased granting of export licenses to European companies has been reported, a move averting a potential crisis, as quoted by the chamber.
Bringing us back to mid-April, Beijing implemented general export controls on seven strategic minerals during the ongoing trade feud with the U.S. This meant only the lucky few could export the essential raw materials after passing a convoluted application process for export permits.
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Europe, Japan, Germany, and the U.S. are reeling under pressure due to rare earths' indispensable role in motors and sensors. This predicament even led to initial production standstills, with Suzuki's Swift model taking a hit. European suppliers are also reporting shutdowns of production lines.
Being the ultimate power player, China justifies its actions by stating that rare earths are dual-use goods; they can be harnessed for both civilian and military purposes. Export controls for these materials are common worldwide, as stated by the Chinese Commerce Ministry's spokeswoman, He Yongqian.
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- China's Move: An Attention-Grabber: In response to reported applications, only about a quarter have been approved so far, with the rest denied for procedural reasons or due to the disclosure of sensitive information.
- Green Channel: China is currently considering creating a "green channel" for qualified exporters in select nations, but details are yet to be released regarding speed, scope, and the countries included.
US President Donald Trump, ever the blunt one, expressed satisfaction after a chat with Chinese President Xi Jinping about those pesky rare earths. China, however, remains tight-lipped about these discussions.
Sources: ntv.de, chl/dpa
- China
- Rare Earths
- EU
- The latest improvement in China's export controls on rare earths might provide a lifeline for small and medium-sized European auto industry undertakings, currently struggle with initial production standstills and shutdowns of production lines.
- As the technology sector heavily relies on rare earths for the production of motors and sensors, the relaxation of China's export restrictions could potentially stimulate collaborations between European small and medium-sized technological undertakings and their Chinese counterparts.
