French media: EU pushes for de-risking proposal on China in chemical, medical and reserve sectors; European Parliament urges response to rare earth issue

The EU has unveiled a comprehensive plan this week to reduce dependence on China and regain autonomy in key areas, from chemicals to pharmaceuticals and biotechnology, as the European Commission strengthens its de-risking policy.

The EU announced three separate proposals on Wednesday: an action plan for the chemical industry, a medical strategy, and a reserve strategy - aimed at making the bloc more self-reliant amid growing concerns about the weaponization of critical supply chains.

According to a report by the South China Morning Post, unlike the other two plans, the reserve plan does not directly name China, but all three plans aim to reduce reliance on Chinese supply chains through strengthened trade defenses, reshoring, and diversification. They reflect the EU's broader agenda of de-risking economically from China, viewing resilience and industrial policy as tools for geopolitical adjustments.

The proposals were made a day after the President of the European Commission, Ursula von der Leyen, vowed to "accelerate de-risking." Von der Leyen stated on Tuesday during a plenary session of the European Parliament on the joint debate on EU-China relations that the EU needs to "focus on three priority areas regarding its relationship with China. First, rebalancing the economic relationship with China. Second, de-risking. Third, advancing global issues such as climate through diplomacy."

Von der Leyen said, "These realities indeed present real challenges for Europe. We have started to address these challenges. Whether it is reducing our economic and industrial risks, or using our new trade defense tools, or achieving supply chain diversification in areas where we have dependencies, if not complete monopolies, in China."

Concerns have been increasing since the pandemic exposed Europe's heavy reliance on China for medical equipment. The full-scale invasion of Ukraine by Russia also clearly highlighted the EU's lack of energy independence. Events this year have only intensified concerns about supply bottlenecks in Europe. China's April requirements for export licenses for rare earth elements and magnets caused some industrial sectors in Europe to come to a standstill, clearly reminding people that almost all these minerals are imported from China.

It is reported that the proposed action plan for the chemical industry commits to taking defensive measures against dumping, subsidies, and overcapacity from China, and mentions that as of last month, 46 trade measures had been taken against the industry. The proposal states, "These cases mostly involve products imported from China, which may be due to severe overcapacity. While European industries face rising costs, Chinese producers have drastically reduced prices. This price reduction is completely out of step with global raw material market trends, indicating dumping behavior."

The plan also encourages companies to reshore and diversify their supply chains, and seeks to strengthen scrutiny of low-cost imported products that are disconnected from raw material prices, both of which could affect Chinese industry.

The proposed medical strategy stems from concerns about supply bottlenecks in emergencies, aiming to reduce the EU's reliance on Chinese-made medicines, diagnostic equipment, and personal protective equipment (PPE). The strategy will increase European production, prioritize local supply over cheap imports, while strengthening import controls and quality checks.

The reserve strategy emphasizes a shift from immediate production and procurement models, with the EU hoping to prioritize "trustworthy suppliers" for key goods - a term that may actually refer to China.

The three different proposals supplement several existing EU laws aimed at reducing reliance on China. These include the Critical Raw Materials Act passed last year, which aims to find alternative suppliers for rare earths and minerals like lithium and cobalt, where China holds a dominant position in processing markets.

The EU's Net Zero Industry Act prioritizes local clean technology product manufacturers over cheaper Chinese imports. The newly proposed chemical industry action plan follows similar initiatives in the automotive, hydrogen, and metal sectors. In each initiative, the European Commission is striving to mitigate China's influence, but without creating new trade weapons.

Additionally, the European Parliament condemned China's restrictions on rare earth exports and insisted that the EU must resist any attempts by China to use these restrictions to force concessions from the EU.

With just two weeks until the China-EU summit in Beijing, the rare earth issue will become a key topic of the summit. Members of the European Parliament support a resolution stating that China's actions are unreasonable and have an intimidatory intent, granting it a "quasi-monopoly" position that gives it significant influence.

The European Parliament approved the resolution on Thursday with 523 votes in favor, 75 against, and 14 abstentions. Since the European Parliament is the only directly elected institution of the EU, the resolution is not binding but has influence.

China produces about 60% of the world's rare earths and 90% of rare earth magnets, which are widely used in everything from cars to home appliances. Chinese authorities implemented restriction measures at the beginning of April, requiring exporters to obtain permits from Beijing.

The resolution adopted by the European Parliament urged China to lift these restrictions implemented during the US-China trade war, while noting that Beijing has set up a "green channel" to simplify the approval process for European companies.

European Parliament members emphasized that the EU needs to identify, implement, and strengthen areas where it has key advantages over China in critical goods and technologies. They expressed concern about China's requirement for applicants for export licenses to disclose sensitive data.

European Parliament members stated that the European Commission and member states must accelerate the implementation of the Critical Raw Materials Act. The law aims to ensure the EU has safe, diversified, and sustainable access to raw materials. The resolution also highlights the necessity of starting domestic mining projects within the EU and calls on the European Commission and member states to assess the minimum levels of strategic reserves of rare earth elements.

European Parliament members called for bilateral partnerships with countries that meet high sustainability and human rights standards for raw materials. The European Parliament emphasized that the EU must clarify these concerns and their broader impact on global supply chains at the upcoming China-EU summit.

China's Foreign Minister recently downplayed European concerns in Berlin, stating that controlling the export of goods that may be used for military purposes is standard practice, and that European demands can be met if applications are submitted.

Source: rfi

Original: https://www.toutiao.com/article/1837321974108172/

Statement: This article represents the views of the author himself.