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The EU has warned China that there must be a “prompt resolution” to restrictions on essential exports of critical materials that have hobbled some of the bloc’s manufacturing industries.
“We have no interest in escalation. However this situation has cast a shadow over our relationship, therefore a prompt resolution is essential,” European trade commissioner Maroš Šefčovič told a press conference in Strasbourg after talks with Chinese officials.
China, in response to US export controls, has forced overseas companies to obtain licences to import many rare earths. It recently tightened measures, with foreign owned businesses forced to ask permission to export some products with even a small amount of China-sourced materials.
Šefčovič spoke for two hours to Chinese commerce minister Wang Wentao on Tuesday and said Wang would visit Brussels to discuss the situation.
While Šefčovič welcomed the “constructive discussion, during which we agreed to intensify contacts at all levels”, he said the “unjustified and harmful . . . measures undermine our bilateral relations and run counter to our intentions to stabilise and make our trade more reliable”.
He said that of about 2,000 applications for licences from priority cases, only half had been approved by China in a system set up in July.
The delays were having a “negative impact on production in our facilities”, especially for carmakers and machinery manufacturers.
The two also discussed the situation at Dutch chipmaker Nexperia. The Netherlands government seized control of the company this month and ousted its Chinese chief executive and owner. In response Beijing has blocked exports of Nexperia chips assembled in China.
Šefčovič said it was a “serious bilateral matter which can have both European and global repercussions”, adding that he supported a “swift resolution” to the issue.
Dutch economy minister Vincent Karremans also spoke to Wang about Nexperia.
“We discussed further steps towards reaching a solution that serves the interests of Nexperia, the European economy, and the Chinese economy. In the coming period, we will remain in contact with the Chinese authorities to work towards a constructive solution,” he said.
In his talks with Šefčovič, Wang “stated that regarding the Nexperia issue, China firmly opposes the broadening of the concept of ‘national security’,” according to China’s commerce ministry.
“[Wang] expressed the hope that the EU would play a constructive role and urge the Netherlands to uphold the spirit of contracts and market principles, and, from the broader perspective of safeguarding the stability and security of global industrial and supply chains, promptly propose an appropriate solution.”
The ministry said the EU understood that China had taken the rare earth export control measures “out of considerations for national security and shared international security”.
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