China expands olive branch to western auto giants

China seems to have offered us and European car giants something like cancellation after industrial groups warn to increase threats of production over rare land shortages.

The Chinese Ministry of Trade on Saturday said He was ready to create the so -called “green channel” for exporting licenses for export licenses to speed up the approval process to European Union companies. A spokesman for the Ministry of Trade said Wang expressed hope that the EU would take “reciprocal steps” and adopt measures to promote compatible trade in high -tech products with China.

The breakthrough comes after trade talks between Chinese Minister of Trade Wang Ventao and EU Commissioner Maros Sephkovic, met in Paris, France last week.

Beijing also provided licenses for rare land to US car giants suppliers General Motors., Ford and a jeep manufacturer Stellantis., Reuters reported On Friday, citing unnamed sources. The report states that the Ministry of Trade in China did not respond to a fax request for comment. CNBC contacted GM, Ford and Stellantis.

The Chinese Ministry of Trade in early April imposed restrictions on the export of several rare earth elements and magnets widely used in the automotive, defense and energy sectors. Connections were part of the US President’s response Donald TrumpThe increase in the tariffs for Beijing products.

Some of the rarely affected elements were critical components for the production of both engine combustion and electric vehicles.

Maximilian Butek, CEO and member of the Board of the German Chamber of Commerce in China, said the weekend message was certainly good news for the European business, but noted that it remains unclear whether the fast tracking channel is being applied to large-scale companies or more sectors.

“This is a huge bureaucratic monster that they have created and I am not sure if they can really speed up the process and give the licenses to those who need them,” Butek told CNBC “Europe Early Edition“On Monday.

The best car manufacturers in Europe will welcome the diplomatic breakthrough, Butek said, stressing the need for the European bloc to improve the diversification of the supply chain.

“Everything has hit us quite surprised that China is even ready to download this card because it is a measurement of revenge to the tariffs that the US has fulfilled, right? And we, as European companies, are now in the cross fire of this trade escalation. This is not really where we want to be,” Butek said.

“It’s not enough to announce it, but they have to show it,” he added.

China is Undeniable from the critical supply chain of minerals, accounting For approximately 60% of the world’s production of rare earth minerals and materials. US officials had previously had warn The fact that this domination is a strategic challenge against the background of rotating more resistant energy sources.

Some analysts compare squeezing throughout the industry on deliveries of rare earth magnets with Global semiconductor crisis This disrupts automotive production during the coronavirus pandemic.

Speaking to CNBC before China announces plans to accelerate the export approval of rare EU exports, the European Association of Car Producers (ACEA) said some of its members are at risk of interruption of production, starting next month.

The Car Lobby Group that represents the likes of Stellantis, Renault., Ferrari., Volkswagen and Volvo said that licenses for export of rare land from the Ministry of Commerce of China have taken a “significant” time to process after the April restrictions entered into force.

“Overall, the global stocks of these magnets are quite low. And given that China is a voluminous global supplier, this means that in the absence of these export licenses, these shares are gradually exhausted since early April,” said Jonathan O’Rjordan, International Commercial Director at ACEA, in front of CNBC on the phone.

“We are gradually entering a very, very critical moment in which these stocks are already exhausted and we will potentially see a stop of production,” he added.

Acea’s warning followed separately ominous update by the European Association of Car Suppliers.

Last week, the group said several car suppliers and production suppliers installations have already been closed due to the latest Beijing export restrictions, with more interruptions expected with the exhaustion of rare animals in the coming weeks.

Japanese carmaker SUZUKI motorHowever, stopped production of his Swift Car due to the rare lands of China, Reuters reported Thursday, citing two unnamed sources. The Suzuki motor spokesman did not respond to a comment request when he contacts CNBC.

The search for rare lands and critical minerals is expected grow exponentially In the coming years as The transition of clean energy is gaining paceS