Brussels: European Commission President Ursula von der Leyen announced that the European Union and China have reached an agreement to ease restrictions on rare earth exports, a significant step aimed at reducing trade tensions. This announcement was made during a news conference alongside European Council President Antonio Costa following the EU-China Summit.
According to Anadolu Agency, von der Leyen emphasized the importance of China's efforts to expedite licenses for critical raw materials, stating that both parties have agreed to enhance the export supply mechanism. This upgraded mechanism is designed to quickly identify and resolve any bottlenecks that may arise in the supply chain, thereby ensuring a reliable and secure supply of critical raw materials from China to Europe.
Von der Leyen highlighted the strain these export controls have placed on some European companies, stressing the need for trust in the trade relationship with China. She also pointed out the EU's trade deficit with China has doubled over the last decade, calling for a balanced trade relationship to ensure mutual benefits.
The discussions at the summit also covered concerns about overcapacity in various sectors of China's economy, such as steel, solar panels, electric vehicles, and batteries. Von der Leyen noted that subsidized production in these sectors often exceeds domestic demand in China, resulting in surplus production impacting other markets, including the EU's single market.
The Chinese leadership, according to von der Leyen, has acknowledged the issue under the term "involution" and has shown willingness to support consumption over production. She reiterated the EU's commitment to a clear, consistent, and result-driven approach to protect its interests while maintaining an open dialogue with China.
Von der Leyen concluded by affirming the EU's strategy to de-risk, bolster economic security, and enhance competitiveness, while remaining committed to a respectful and open dialogue with China. The summit, she noted, facilitated this crucial exchange of perspectives.