China extends the olive branch to Western car giants

China seems to have offered American and European car giants something a stay after industrial groups warned increase production threats to a shortage of rare earth.

The Chinese Ministry of Commerce on Saturday said He was willing to establish a so-called “green channel” for eligible export license requests to accelerate the approval process to European Union companies.

A spokesperson for the Ministry of Commerce said Wang had expressed hope that the EU would take “reciprocal measures” and adopt measures to promote the compliant trade in high-tech products with China.

The breakthrough comes after the commercial negotiations between the Chinese Minister of Commerce Wang Wentao and the EU Commerce Commissioner Maros Sefcovic met in Paris, France last week.

Beijing has also granted rare earth licenses to suppliers of American automobiles General Motors,, Ford And jeep-maker Stelllantis,, Reuters reported Friday, citing anonymous sources. The report indicates that the Chinese Ministry of Commerce has not responded to a request for faxed comments. CNBC contacted GM, Ford and Stellantis.

The Chinese Ministry of Commerce in early April imposed export restrictions on several rare elements and magnets widely used in the automotive, defense and energy sectors. The borders were part of a response to the American president Donald TrumpThe increase in the price of Beijing products.

Some of the rare elements of rare land was critical to the production of combustion engines and electric vehicles.

Maximilian Butek, executive director and member of the Board of Directors of the German Chamber of Commerce in China, said that the announcement of the weekend was certainly good news for European companies, but noted that it is not clear if the fast chain applies to large-scale businesses or more widely.

“It is a huge bureaucratic monster that they have created and I do not know if they can really accelerate the process and give licenses to those who need it,” said Butek to CNBC “Europe Early Edition“Monday.

The best European car manufacturers will welcome diplomatic breakthroughs, said Butek, while highlighting the European block need to improve the diversification of supply chains.

“All this struck us with a surprise that China is even ready to draw this card, because it is a measure of reprisals to the prices that the United States has implemented, right? And we, as European companies, we are now in the cross fire of this commercial escalation, and it is really not where we want to be,” said Butek.

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

China is the undisputed leader of the critical mineral supply chain, accounting For around 60% of the world’s production of minerals and rare land materials. US officials have previously warned That this domination poses a strategic challenge in the middle of the pivot of more sustainable energy sources.

Some analysts have compared compression on the scale of industry on rare earth magnet supplies Global semiconductor crisis This disrupted automotive production during the coronavirus pandemic.

Addressing CNBC before China announced its intention to accelerate the process of approving rare land exports to the EU, the European Automobile Manufacturers’ Association (ACEA) said that some of its members were in danger of production failure.

The car lobby group, which represents the tastes of Stellantis, Fox,, Ferrari,, Volkswagen And Volvo, said that the export licenses for rare earths from the Chinese Ministry of Commerce had taken “significant” time to deal with since the entry into force of restrictions in April.

“Generally, the global actions of these magnets are quite low. And, since China is the world supplier in bulk, he indicated that, in the absence of these export licenses, these actions have been exhausted gradually since the beginning of April,” said Jonathan O’Riordan, director of international trade at ACEA, at CNBC by phone.

“We are gradually entering a very, very critical moment when these stocks are now exhausted, and we will potentially see production stops,” he added.

Acea’s warning followed a separate Disturbing update of the European Association of Automobile Suppliers.

Last week, the group said that several automotive supplier and production lines had already been closed due to the recent Beijing export restrictions, with other expected breakdowns while rare earth inventories are exhausted in the coming weeks.

Japanese car manufacturer Suzuki engineHowever, the suspended production of his fast car due to the borders of the rare land of China, Reuters reported Thursday, citing two anonymous sources. A spokesperson for Suzuki Motor did not respond to a request for comments when contacted by CNBC.

The demand for rare earths and critical minerals should grow exponentially in the coming years as the The clean energy transition accelerates the pace.