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China has announced to allow export of rare earth metals for civilian use. This is expected to provide relief to many countries including India. This decision has come at a time when India was continuously expressing concern about the shortage of raw materials in the auto, electronics and energy sectors. However, China has made it clear that this exemption will be limited to civilian use only and the export of rare earths for defense products will still remain under control. This decision may bring some stability in the global supply chain, but the question of strategic dependence still remains.
New Delhi. China said on Friday that it will allow export of rare earth metals for civilian use. This statement has come at a time when many countries including India had requested China to remove the restrictions on the export of rare earth metals. Rare earth metals are considered very important for electronics, automobiles, wind energy and high tech manufacturing. Chinese Foreign Ministry spokesperson Guo Jiakun said that China’s export control system is in accordance with the law and does not target any one country. He made it clear that if the export is for civilian use and follows the prescribed regulations, then the government will give approval in time.
China has also clarified that export will not be allowed if rare earth metals are used in defense products. Medium and heavy rare earths are kept in dual use category, that is, they can be used in both civilian and military purposes. For this reason, China is calling it an international practice and linking it to world peace and regional stability. China argues that such controls are necessary for non-proliferation and global security. This is the reason why despite giving relief to the civilian sector, China seems to be in no mood to give any relaxation in the defense sector.
What a big relief for India
India has long been concerned about the supply of rare earth metals, especially in the auto and electric vehicle industries. New Delhi had strongly raised this issue in bilateral forums and the Foreign Ministry consultations held on 12 December. The Ministry of External Affairs had clearly said that it is necessary to resolve the pending issues related to export control quickly. This decision of China may provide some relief to Indian industry in the short term, but the challenge of dependence in defense and strategic sectors will still remain. India has also placed before China the demand for export of heavy boring machines along with rare earths.
Why the whole world depends on China
China controls about 70 percent of global rare earth mining and about 90 percent of processing. America, European Union and India are its biggest importers. During the tariff war with America, China had imposed strict export controls on rare earths, which are now being partially loosened. Recently, after the deal related to semiconductor chips with America, China has shown relaxation in rare earth controls. It is clear from this that rare earth metals have become not only industrial but also geopolitical weapons. China’s latest decision certainly provides relief, but it also reminds that the real hold on the supply chain is still in the hands of Beijing.
