By Sanxuan

After multiple rounds of communication between China and the EU, as well as President Macron's visit to China, the EU finally received good news on rare earth supply. According to European Commissioner for Trade and Economic Security, Valdis Dombrovskis, on December 15, China has started issuing general rare earth export licenses with a validity period of up to one year to European companies.

Since China established the rare earth export licensing system in April this year, the EU has repeatedly criticized the procedures as overly complicated. In October, it further escalated its rare earth export control measures. After the EU and the US held economic and trade negotiations in Kuala Lumpur, the EU's concerns intensified, fearing that it might not be included in China's list of "suspended rare earth export controls."

European Commissioner for Trade and Economic Security, Valdis Dombrovskis

According to the EU's statement in November, European companies had submitted about 2,000 rare earth applications since China implemented export controls. The number of approved applications just exceeded half. How to ensure a more stable rare earth supply became a key issue for Europe. Now, China's decision finally allows the EU to breathe a sigh of relief.

China has repeatedly emphasized that implementing rare earth export controls is to better safeguard national security and fulfill international non-proliferation obligations. The facts have proven that we have indeed lived up to our promises. Adjusting these measures now is to better maintain the stability of the global supply chain. However, this does not mean that trade tensions between China and the EU have been completely resolved. Just a day after Dombrovskis announced this news, the Chinese Ministry of Commerce released a notice, deciding to impose anti-dumping duties on imported related pork and pig by-products from the EU starting December 17.

Chinese Ministry of Commerce

The two trade measures taken by China against the EU may seem contradictory at first glance, but they actually conceal precise strategic considerations. In the rare earth sector, China chose to optimize the licensing system, extending the validity period to one year and simplifying the process. Behind this move is the irreplaceability of China's rare earth industry globally. China holds an almost absolute "dominant position" in the rare earth materials sector, which are the "lifeblood" of the EU's new energy vehicles and clean technologies. By relaxing the license, China avoids stagnation of key EU industries due to supply disruptions, while also locking the flow of rare earths into civilian areas through relevant mechanisms to prevent misuse of technology.

As for the decision to impose tariffs on EU pork and pig by-products, it was a carefully considered choice made after investigation. The EU has long relied on the Chinese market to absorb excess production capacity, especially in pig by-products. Products such as pig ears, pig feet, and pig organs, which are rarely consumed by European consumers, are exported to China at a rate of over 90%, with an annual export value of nearly $5 billion. These products are sold at dumping prices and have caused substantial harm to China's domestic industries.

Although the timing of these two measures is highly delicate, China's "one loosening and one tightening" combination is not meant to clash with the EU, but rather to uphold the bottom line of fair trade. Relaxing the rare earth restrictions is because the global supply chain needs stability, and China is willing to show cooperation in key areas. Imposing tariffs on pork is because the EU's low-price dumping has harmed Chinese enterprises' interests, and necessary protection cannot be lacking. This is not a "one-size-fits-all" confrontation, but a balanced approach based on precision.

Sino-EU economic and trade relations have never been a "zero-sum game." In 2024, bilateral trade between China and the EU reached 850 billion euros. China is the EU's largest trading partner, while the EU is China's second-largest trading partner. In fields such as new energy, digital economy, and environmental protection, the complementary nature between the two sides is much greater than their competitiveness. If the EU can put aside its "superior" mindset, regulate export order, and stop dumping, China is not opposed to adjusting tariffs flexibly. China can also use this opportunity to promote more cooperation between the EU and China on rare earth processing technology and market access, so that both sides can benefit and achieve long-term results.

Global trade is currently in a period of adjustment. Unilateralism and protectionism only narrow the path forward. Precise and rational policies can lead the way. China's two moves toward the EU protect domestic industries and provide space for cooperation. Ultimately, it means: cooperation is possible, but it must be fair; win-win is possible, but not at the expense of one side. If the EU can understand this, the future of Sino-EU trade will become smoother.

Original: toutiao.com/article/7584392967209648694/

Disclaimer: This article represents the personal views of the author.