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China has said it is issuing general licences for exports of rare earths, in a move that could ease trade tensions with the US, Europe and other trading partners and alleviate acute shortages that have gripped global supply chains.
As part of a trade war truce agreed between the US and China last month, Beijing agreed to begin issuing general licences for exports of rare earths and related magnets, which are essential for industries from automotive to electronics.
Western companies hope general licences will let them more freely import rare earths within a given time period.
China’s commerce ministry said on Thursday that it “actively applies facilitation measures such as general licences to promote the compliant trade of dual-use items and effectively safeguard the security and stability of global industrial and supply chains”.
“As long as the export applications are for legitimate civilian use and are compliant, the Chinese government has approved them in a timely manner,” a ministry spokesperson said.
The statement was the first signal that Beijing had begun easing the restrictions on rare earths and related magnets that have choked off supply chains, rattled trading partners and forced the US to the negotiating table.
China dominates the supply chain for rare earths, accounting for 70 per cent of mining of the minerals, 90 per cent of separation and processing and 93 per cent of rare earth magnet manufacturing.
Beijing’s introduction of a stringent new export control regime this year also damaged confidence in the EU, threatening its car manufacturers and other industries with shortages and even production shutdowns.
EU officials have told member states that about 75 per cent of company requests are now being met, up from 50 per cent in October, after frequent talks between Brussels and Beijing.
The bloc outlined a plan on Wednesday to reduce dependence on China for critical minerals. It includes €3bn to support mining, processing and refining, a purchasing agency to build stockpiles and a push to recycle waste into new products.
France’s President Emmanuel Macron, during a visit to Beijing on Thursday, warned his Chinese counterpart Xi Jinping over trade, saying that growing imbalances were a threat to the relationship.
