Highlights

• China accuses the EU of discriminatory enforcement under the Foreign Subsidies Regulation, targeting Chinese firms like CRRC and Nuctech, while warning of potential retaliatory measures.
• Beijing has approved general export licenses for certain rare earth items from select Chinese exporters, representing controlled normalization rather than a rollback of export controls.
• The dual message signals China's strategic leverage over critical minerals supply chains while maintaining that access will remain strictly on Beijing's terms with conditions that can be tightened without notice.

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China has sharply criticized the European Union for what it describes as discriminatory enforcement actions against Chinese companies, while simultaneously signaling more systematized—though still tightly controlled—management of rare earth exports. The message, delivered through state media (opens in a new tab) this week, underscores rising economic friction between Beijing and Brussels as supply chains for electric vehicles, security technology, and critical minerals become increasingly politicized.

At a regular press briefing, China’s Ministry of Commerce (opens in a new tab) accused the European Commission (opens in a new tab) of selective targeting under the EU’s Foreign Subsidies Regulation (FSR (opens in a new tab)), citing investigations into Chinese rail manufacturer CRRC and security equipment maker Nuctech, as well as on-site inspections of Chinese digital platforms. Beijing warned it would “take necessary measures” to safeguard Chinese firms’ interests—language commonly used to signal potential retaliatory trade or regulatory responses.

For Western businesses, the framing matters. China is portraying EU enforcement not as neutral competition policy, but as economic containment, laying rhetorical groundwork for possible countermeasures.

A Parallel Signal on Rare Earths

Included in the same announcement was a development with direct implications for U.S. and European manufacturers: China has received and approved applications for general export licenses covering certain rare earth–related items from some Chinese exporters. According to the Ministry of Commerce exporters that have gained experience in export operations and regulatory compliance now meet the basic requirements to apply for such licenses.

This does not represent a rollback of export controls. Rather, it reflects a controlled normalization—a shift from ad hoc approvals toward a selective licensing framework. Importantly, China did not disclose which companies were approved, which products are covered, or what volumes, destinations, or license durations apply.

For Western supply chains, the takeaway is sobering: access to rare earths may resume for some buyers, but strictly on China’s terms, and under conditions that can be tightened again without notice.

Why This Matters for the U.S. and Europe

The juxtaposition is deliberate. While condemning EU scrutiny of Chinese firms, Beijing is reinforcing that it retains strategic leverage over rare earth exports—a critical input for EVs, defense systems, wind turbines, and advanced electronics. Dialogue is offered, but from a position of strength.

In short, China is signaling cooperation without concession.

Disclaimer: This news item originates from Chinese state-owned media. The information and claims should be independently verified.

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