Recently, a report that "Suzuki, a Japanese car manufacturer, has suspended production of its main small cars in Japan due to delays in parts procurement caused by China's rare earth export control" has drawn widespread attention, once again bringing China's rare earth control measures to the forefront of public opinion. On June 5th, in response to this report, China made a response at a regular press conference.
According to a report by the Nikkei Asian Review on June 5th, affected by China's rare earth export control, Suzuki Motor has suspended most of the production lines for its main model "Swift (Rainbow Swallow)" domestically from May 26th to June 6th, with only the sport version (Swift Sport) remaining operational. Although Suzuki has not publicly disclosed the reason for the suspension, media reports and supplier sources confirmed that the direct cause was the interruption of rare earth supply. Due to the inability of parts companies to obtain timely Chinese rare earth export permits, the procurement chain has stalled, prompting Suzuki to suspend the production of most Swift models to avoid efficiency losses on the production line.
The crux of the issue lies in the mild hybrid system used in the "Swift" model. The high-performance motor and inverter in this system heavily rely on rare earth materials such as neodymium, dysprosium, and terbium. Since China tightened its export management of seven categories of rare earth products in April this year, the international circulation rhythm of rare earth-related components has slowed down, directly affecting the progress of vehicle assembly. Suzuki is almost entirely dependent on China for rare earth procurement. Although Japan has the third-largest rare earth reserves in the world, its refining capacity is severely inadequate, with 92% of rare earth processing relying on China. Suppliers of Suzuki's components, such as Nidec Corporation and Denso, source 80% of their neodymium iron boron magnets from Chinese manufacturers like Ningbo Yongsheng and Zhongke Sanhuan. When customs in China suspends clearance due to export permit issues, Suzuki's production lines are paralyzed.
At the regular press conference held by the Ministry of Foreign Affairs on the same day, a reporter from NHK asked about this matter. Spokesperson Lin Jian responded that China's export control measures comply with international practices and are non-discriminatory, not targeting any specific country. "Regarding the specific questions you mentioned, I suggest asking the relevant Chinese authorities," said Lin Jian. This response clearly indicates that China's rare earth export control measures are based on rules and international conventions and are not special measures targeted at individual countries.
On the same day, at the regular press conference held by the Ministry of Commerce, a journalist also asked: Some foreign enterprises believe that China's rare earth export licensing process is relatively slow, and their enterprises may face production halts. How does China respond to this? Spokesperson He Yongqian of the Ministry of Commerce stated that rare earth-related items have obvious dual-use attributes, and implementing export controls on them is an international practice. The Chinese government reviews applications for export licenses of dual-use items according to laws and regulations. Applications that meet the criteria will be approved, promoting and facilitating compliant trade. This further illustrates that China strictly adheres to laws and regulations in its rare earth export control, and there will be no deliberate restrictions for applications that meet the conditions.
In fact, China's implementation of rare earth export controls is not unprecedented and is not without purpose. Rare earths, as important strategic resources, play an irreplaceable role in new energy, information technology, aerospace, military, and many other fields. Ninety-two percent of the global rare earth refining capacity is concentrated in China, where core technologies such as rare earth separation and permanent magnet material preparation are mastered. Previously, to maintain the rational development and utilization of rare earth resources, promote sustainable industrial development, and ensure national security, China has implemented a series of policy adjustments and controls in the rare earth industry. The tightening of approval for exports of seven categories of medium and heavy rare earths is also based on comprehensive considerations from multiple aspects.
Suzuki's production halt due to rare earth supply issues is not an isolated event but a microcosm of the "rare earth dependency risk" in the global automotive industry. At the end of May, Ford Motor also suspended production of the SUV "Explorer" at its Chicago plant in Illinois due to insufficient supply of rare earth-related components. The European Association of Automotive Parts Industries disclosed that since April, only about 25% of the hundreds of rare earth export license applications submitted by major European component manufacturers to the Chinese government have been approved. Many companies have been forced to reduce production or temporarily shut down due to prolonged approval waiting times and uncontrollable delivery schedules. Tata Motors and Maruti Suzuki of India, which depend on China for 90% of their automotive magnets, saw their inventories run out at the end of May, facing potential supply disruptions for critical components such as electric windows and ABS systems.
With the rapid development of the global new energy industry, demand for rare earths in electric vehicles and wind power continues to rise. While countries are actively laying out the new energy industry, they are increasingly realizing the importance of stable rare earth supply chains. As China occupies a key position in the global rare earth supply chain, its every move has far-reaching impacts on related industries worldwide. This incident of "Japanese companies halting production due to China's rare earth control" undoubtedly serves as a wake-up call for global companies, prompting enterprises in various countries to reassess their layouts in the rare earth supply chain and consider how to reduce dependence on single sources, building more diversified and stable supply chain systems. For China, while reasonably utilizing its rare earth resource advantages, it will continue to uphold the principles of openness, fairness, and non-discrimination, working with the international community to jointly safeguard the stability and security of the global industrial chain and supply chain.
Original article: https://www.toutiao.com/article/7512405597137060387/
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