EU China rare earth

Beijing (dpa) — The European Union and China have agreed on a new mechanism to help solve possible issues regarding exports, European Commission President Ursula von der Leyen said on Thursday, amid fears sparked by Chinese restrictions to rare earth exports.

“We agreed – and this is new – to have an upgraded export supply mechanism,” von der Leyen said during a press conference following a EU-China summit in Beijing.

“In other words, if there are bottlenecks, this upgraded supply chain support mechanism can immediately check and solve the problem or the issue that is out there,” she said.

The EU chief did not provide further details on how exactly the mechanism would work, including the types of exports it would cover and whether China had extracted any concessions in exchange for agreeing to the move.

The instrument was designed to provide more transparency regarding the granting of licences for raw materials and the delivery to companies, von der Leyen said.

She called on China to show more reliability in the supply of critical raw materials.

China introduced export limits on seven rare earths and magnets made from them in April, obliging companies worldwide to go through a lengthy and complicated application process in order to be able to import the materials.

As a result of the controls, which were imposed by Beijing amid an escalated trade dispute with the US, industrial companies have increasingly voiced concerns that they may have to halt production amid a lack of rare earths, which are essential for manufacturing electric motors and sensors, for example.