The EU and China agreed on a new mechanism to help smooth the export of rare earth elements and magnets, European Commission President Ursula von der Leyen said after a summit in Beijing with Chinese President Xi Jinping and Premier Li Qiang. President of the EU Council Antonio Costa also participated in the one-day meeting on July 24.
“We agreed – and this is new – to have an upgraded export supply mechanism. 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,” von der Leyen said. China’s chokehold on rare earth exports has become one of the biggest issues in the EU-China relationship and was high the EU's agenda. The tension stems from China’s decision to impose licensing requirements on the export of rare earth elements and magnets in April. The move was a response to U.S. tariffs, but European firms were caught in the crossfire, with some production lines grinding to a halt. Von der Leyen acknowledged China’s efforts “on fast tracking licenses for the critical raw materials” and said progress was vital to repairing “trust in our trade relationship”. “We need a reliable and secure supply of critical raw materials from China. Being seen as a reliable supplier and partner is clearly aligned with China’s long-term economic and strategic interests,” she said.
Von der Leyen said that “the summit showed that we can find practical solutions”. “There will be more transparency about the speed of the export licensing, and speedier delivery of these critical raw materials to the companies,” she said. “And if there is a critical delay, we have now established a mechanism where the companies can immediately ask us to mediate, and to find out why there is a delay. So, a very pragmatic step forward.”
Von der Leyen warned her Chinese hosts that the European market would not remain open to its goods if Beijing did not act on its industrial imbalances. Trade ties had “reached an inflection point”, she said. “In crucial sectors, like steel, solar panels, electric vehicles, batteries and others, the subsidized production does not match the domestic demand in China, and therefore overcapacity produced here goes to other markets,” von der Leyen said. “The Chinese leadership has started to look into this issue under the term ‘involution’, and expressed willingness to support more the consumption and less the production part. This is important. We need to see progress on this issue, because without progress, it would be very difficult for the European Union to maintain its current level of openness.” The summit was the 25th between the two sides and held in Beijing to mark the 50th anniversary of diplomatic relations.
The two parties also pledged to work together on global issues such as tackling climate change and preserving biodiversity, signing a joint statement on climate ahead of the Cop30 summit in Brazil later this year. “This sends an important message on our work together, and we encourage China to also propose an ambitious national contribution for Cop30. And China should lead by example, in line with its major global role,” European Council President Antonio Costa said after the summit.
“Climate has long been the lowest common denominator in EU-China relations, but even that baseline appears to be slipping. This latest statement offers few specifics, just vague pledges to do more of the same,” said Byford Tsang, Senior Policy Fellow for Asia at the European Council on Foreign Relations. “It is in stark contrast to the last joint statement back in 2021, when Beijing at least signaled willingness to tackle its coal consumption.”
The build-up to the event was marked by sharp disagreements, particularly on geopolitical issues such as China’s close ties with Russia. Just a week before the summit, the European Union sanctioned two regional Chinese banks over crypto transactions with Russia. Those tensions spilled over into the summit. While both European leaders described their meeting with Xi as “excellent”, they also raised their concerns over Russia’s invasion of Ukraine and Beijing’s relations with Moscow, the South China Morning Post reports.
The China Daily and the Global Times emphasized President Xi Jinping's call to provide more stability and certainty for the world through steady and sound China-EU relations. Xi said over the past 50 years, China and the EU have achieved fruitful results in exchanges and cooperation, delivering mutual success and worldwide benefits. An important understanding and insight is that the two sides should respect each other, seek commonality while reserving differences, uphold openness and cooperation, and pursue mutual benefit. President Xi underscored the importance for China and the EU, both constructive forces for multilateralism and openness and cooperation, to strengthen communication, enhance trust and deepen cooperation in a more challenging and complex international situation. As “big guys” in the international community, China and the EU should keep their bilateral relationship growing in the right direction, and work together to usher it into an even brighter next 50 years, Xi said.
