‘Upgraded’ rare earths export mechanism with China agreed: EU

BEIJING: EU chief Ursula von der Leyen said on Thursday that the bloc had agreed with Beijing to an “upgraded” mechanism for Chinese exports of rare earth minerals, a key sticking point in ties.

“We agreed… to have an upgraded export supply mechanism. In other words, if there are bottlenecks, this upgraded support supply chain support mechanism can immediately check and solve the problem or the issue that is out there,” von der Leyen told a press conference in Beijing.

Read more: Rare earths: China’s trump card in trade war with US

At the same time, the EU chief said that China’s ties with Russia would be the “determining factor” in relations between the bloc and Beijing.

“How China continues to interact with Putin more will be a determining factor of our relations going forward,” von der Leyen said, referring to the Russian president.

Read more: Trump touts ‘done’ US-China deal on rare earths, Chinese students

WILL ONLY BRING ISOLATION

Earlier, Chinese President Xi Jinping urged top European Union officials on Thursday to “properly handle differences and frictions” as he criticised Brussels’s recent trade actions against Beijing at a tense summit dominated by concerns on trade and the Ukraine war.

“The current challenges facing Europe do not come from China,” Xi told visiting European Commission President von der Leyen and European Council President Antonio Costa, state news agency Xinhua said.

He urged the EU to “adhere to open cooperation and properly handle differences and frictions”, after von der Leyen earlier called for a rebalancing of trade ties with the world’s second largest economy, saying relations were at an “inflection point”.

“Improving competitiveness cannot rely on ‘building walls and fortresses’,” Xi added, according to Xinhua. “‘Decoupling and breaking chains’ will only result in isolation.”

Read more: China rejects EU condemnation over rare earth controls

“It is hoped that the European side will keep the trade and investment market open and refrain from using restrictive economic and trade tools,” Xi said.

He also warned EU leaders to “make correct strategic choices”, in a further veiled criticism of Brussels’ recent hawkish stance on China.

INFLECTION POINT

“As our cooperation has deepened, so have imbalances,” von der Leyen told Xi during their meeting in Beijing’s Great Hall of the People, according to a pool report.

“We have reached an inflection point,” she added, urging China to “come forward with real solutions”.

She was referring to the EU’s trade deficit with China, which ballooned to a historic 305.8 billion euros ($360 billion) last year.

“We think increasing market access for European companies in China, limiting the external impact of involution, and reducing export controls are important steps forward,” von der Leyen told Premier Li Qiang later, according to a pool report.

She described her meeting with Xi as “excellent”.