China Downplays EU Concerns Over Rare Earth Export Restrictions

Highlights

• China imposed new export licensing requirements for rare earth elements, controlling over 90% of global processing capacity.
• Wang Yi reassured European partners that rare earth exports will not be a problem, offering a fast-track approval process.
• Ongoing tensions raise questions about supply chain diversification, market volatility, and future EU-China trade relations.

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Chinese Foreign Minister Wang Yi (opens in a new tab) addressed European concerns over China’s rare earth export restrictions during a press conference in Berlin on July 3, 2025, according to reporting by Sarah Marsh and Andreas Rinke of Reuters (opens in a new tab). Wang stated that rare earths, essential in manufacturing industries from automobiles to home appliances, “have not been, are not, and will not be a problem between China and Europe, or between China and Germany.” He emphasized that standard procedures for dual-use goods were being followed and assured that legitimate European and German needs could be fulfilled upon proper application submission.

Earlier in April, China imposed new export licensing requirements for rare earth elements, reinforcing its dominant position controlling over 90% of global processing capacity. The move sparked significant anxiety within the EU, prompting German Foreign Minister Johann Wadephul (opens in a new tab) to express “great concern” about China’s reliability as a trading partner.

Wang Yi underscored that China had implemented a fast-track approval process to expedite routine export applications. Nevertheless, Wadephul stressed the urgency of reaching a sustainable solution before the upcoming EU-China summit later this month.

Critical unanswered questions remain, notably: How transparent and fair is China’s fast-track application process in practice? Can Europe realistically diversify its rare earth supply chain rapidly enough to reduce dependency on China? And crucially, how will these ongoing tensions affect the pricing and availability of rare earth elements for European industries?

Rare Earth Exchanges (REEx) highlight these critical developments for retail investors, underscoring the strategic importance and inherent vulnerabilities within the rare earth supply chain. Investors should closely monitor whether the EU-China discussions yield tangible agreements or if further geopolitical complications could exacerbate market volatility.