China-Europe call just talked about rare-terrestrial cooperation, Deutsche Welle turned to China, Germany: not exclude the use of "nuclear option"

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On October 21, Chinese Minister of Commerce Wang Wentao had a two-hour video call with European Commission Commissioner for Trade and Economic Security Shefcovic.

The talks focused on key economic and trade issues such as rare earth export control and Nexperia. The two sides reached a preliminary consensus and agreed to launch an "upgraded" export control dialogue.

This move released positive signals of easing relations between China and Europe.

However, just one day later, discordant voices emerged from within the EU. Germany, France and Poland made tough statements on China, once again putting China-EU economic and trade relations into tension.

Rare-earth export control has become the focus of the conflict.Rare-earth is the core resource of the high-tech industry, widely used in new energy, chip manufacturing and other fields.

China has long occupied a global dominant position in the production and export of rare earth, but in recent years, China has strengthened rare earth export controls based on national security and global industrial chain stability.

In the call, Wang Ventao made it clear that China's policy is not unreasonable restrictions, but rather improves the export control system in accordance with the law, while committed toining the stability of the global supply chain and providing facilities for EU companies to approve.

However, this policy has caused dissatisfaction in some EU countries.

Germany’s attitude was radical, claiming that it did not rule out the use of the Anti-Coercion Instruments Act (ACI) in response.

The ACI Act, which came into force at the end of 2023, gives the EU powers to restrict trade, cut intellectual property rights, and restrict foreign direct investment, which is considered a “nuclear weapon” in the EU’s trade toolkit.

Despite the fact that the bill hasn’t actually been enacted so far, Germany has pushed it out this time in an attempt to respond to China’s rare-earth controls, while France suggests that the EU consider all possible “revenge options” and Poland calls for the summit conclusions to include the content of so-called “China’s harmful economic actions.”

These tough statements have once again cast a shadow over China-EU relations.

In addition to rare earth controls, the issue of ANSE semiconductors has also become an important issue in China-EU economic and trade relations. The EU restricts investment by China companies on the grounds of "national security", which is regarded by China as a typical example of trade protectionism.

In the call, Wang emphasized that China will never accept the fact of trade protection under the name of "national security", and urged the EU to take due responsibility and play a constructive role.

Shevcovic expressed his understanding of this and promised to promote the Netherlands to negotiate with China on the Ansei semiconductor issue. However, judging from the tough attitude within the EU, there are still doubts about whether Shevcovic's commitments can be translated into practical actions.

Despite Germany, France and Poland’s tough stance on the issue of China, there has been no unified position within the EU.

A senior EU official revealed that even if the issue of "economic security" may be mentioned at the Brussels summit on October 23, there will be no formal debate on China's trade issues. This shows that the EU is trying to avoid a full-scale conflict with China.

Some countries’ harsh remarks are more like “false voices” to fight for political capital, rather than really seeking to confront China.

From a global perspective, the complexity of China-European relations is reflected not only in the issue of rare-earth control and anxiety semiconductors, but also in the mutual dependence and competition between the two sides in the global supply chain.

The EU relies heavily on China’s rare-earth resources, and China also needs the EU as an important trading partner.

However, harsh statements from some EU countries could exacerbate trade frictions between the two sides and even have a negative impact on the global industrial chain.

The United States, Japan and other countries are also paying close attention to China's rare earth export policy, which may lead to far-reaching adjustments in the global supply chain.