With less than a week to go before the EU's temporary tariffs on China's new energy vehicles come into effect, China and the EU are negotiating on the matter. While waiting for the final results, China issued new rules on rare earths to regulate the rare earth industry, which caused concern in foreign media.
A few days ago, a number of overseas media reported on China's newly promulgated "Rare Earth Management Regulations", which is China's first comprehensive regulation to regulate the mining, smelting and circulation of rare earth minerals, which will come into force on October 1. However, the focus of these foreign media is not on the extent to which this regulation can regulate the domestic rare earth industry, but on whether this regulation will affect the international rare earth market and whether it is related to China's countermeasures against the EU's temporary tariffs.
Germany's Der Spiegel linked the matter to national security, Nikkei Asian Review talked about the United States' dependence on China in the field of rare earths, and Bloomberg, Reuters and other media focused on the EU's rare earth market under the influence of this regulation. German media also noted that the "regulation" was issued at a time when the European Union imposed temporary tariffs on Chinese electric vehicles, and said that this could further exacerbate the EU's concerns about the limitation of rare earth supply.
The analysis of these media is based on the fact that China's newly promulgated "Rare Earth Management Regulations" are aimed at European and American countries, but this judgment is clearly wrong. There are 32 articles in the "Regulations", which mainly stipulate six aspects: clarifying the working principles, strengthening the protection of rare earth resources, improving the rare earth management system, promoting the high-quality development of the rare earth industry, improving the supervision system of the whole rare earth industry chain, and clarifying the supervision and management measures and legal responsibilities. On the whole, it is used to regulate some chaos in the domestic rare earth industry, such as the illegal mining and illegal smelting separation mentioned by the heads of the Ministry of Justice and the Ministry of Industry and Information Technology, which have nothing to do with European and American countries.
The Global Times interviewed a researcher from the Ministry of Commerce on June 30, who also made it clear that the Regulations are not export control regulations, and it is unreasonable for foreign media to worry that China will restrict the export of rare earths. On the whole, China has about 23%-37% of the world's proven rare earth reserves, and is the world's leading rare earth mining country. It also has the largest number of rare earth patents, more than the United States and other countries in the world combined. In addition, it also accounts for nearly 90% of the world's rare earth processing and refining output, which can be described as the "hegemony" of the whole industry chain. Naturally, China wants to regulate this area in which it has great influence and avoid disorderly competition, and this move is not aimed at any one country.
At the instigation of the United States, several Western powers have begun to seek supply chain autonomy in recent years, such as Italy, which is preparing legislation to ensure the supply of critical minerals; Media concerns have been influenced by the fact that the European Union has even set targets for raw materials such as rare earths through the Critical Raw Materials Act, aiming to significantly reduce its dependence on imports from a single country by the 2030 deadline. But the problem is that China has repeatedly expressed its support for economic globalization and free trade on the international stage, and has done so itself, and it is a few countries led by the United States that are obstructing the stability of supply chains.
In addition, the road to autonomy of the rare earth supply chain sought by the West may not be so easy. The International Energy Agency predicts that global demand for rare earths will increase several times by 2040, but it usually takes more than 15 years for rare earth mining projects to go from discovery to first production, and the market cannot wait that long.
If the West wants to solve this problem, the key is to recognize the reality. The global industrial chain shaped by economic globalization in the past few decades cannot be changed overnight, and the trade barrier with deep trenches and high barriers will eventually harm others and itself. Some media must not spend the belly of a gentleman with the heart of a villain.