China has proposed the establishment of a "green channel" aimed at facilitating the export of rare earths to the European Union, as stated by the Ministry of Commerce on Saturday.

This follows a series of restrictions imposed by Beijing since April, which require licenses for the export of these critical materials.

China dominates the global rare earth market, accounting for over 60 percent of rare earth mining production and 92 percent of the world’s refined output, according to the International Energy Agency.

Rare earth metals are pivotal in various high-tech applications, including electric vehicle (EV) batteries.

The new licensing regulations have sparked criticism from various industries within Europe, where stakeholders argue the processes for obtaining licenses are cumbersome and hinder production.

The commerce ministry specified that these export controls are considered a common practice globally.

It expressed China's intent to address European concerns regarding the impact of these regulations on trade.

Minister Wang Wentao, who met with EU Trade Commissioner Maroš Šefčovič, emphasized China’s willingness to expedite the approval process for eligible applications and to ensure ongoing communication to address trade issues.

The discussions took place against a backdrop of escalating tensions, with European officials highlighting severe disruptions to industries reliant on these materials.

Šefčovič remarked that Beijing’s restrictions have led to significant challenges in the European automotive sector, as well as affecting manufacturers of household appliances.

The EU Chamber of Commerce in China reported a slight improvement in the issuance of export licenses but cautioned that ongoing disruptions still significantly affect supply chains.

These developments arise as EU and Chinese officials prepare for a summit next month to celebrate the 50th anniversary of diplomatic relations between the two entities.

In parallel, the EU and China are engaged in negotiations over tariffs imposed on Chinese EV imports, which the EU contends are necessary to protect local industries from subsidized competition.

Both parties are reportedly discussing potential minimum pricing commitments for EV exports from China in exchange for reconsidering these tariffs.

Additionally, a separate report has emerged highlighting that the European Commission allocated up to €700,000 to environmental NGOs to lobby against certain German industries.

The funding, as reported by German media, was intended to bolster the EU's climate agenda and involved organizations such as ClientEarth and Friends of the Earth.

These developments coincide with ongoing negotiations between Indonesia and the EU aimed at finalizing a free trade agreement that is anticipated to ease trade barriers.

Indonesia's Economic Minister stated that discussions are nearing conclusion, with formal announcement expected by the end of June, suggesting a potential opening of the EU market to Indonesian exports, especially in the forestry sector.

In another context, tensions between China and the EU have heightened over maritime issues, particularly in the South China Sea.

The Chinese government reacted to recent EU statements regarding security in this region, urging the bloc to refrain from provoking conflict and respecting China’s sovereignty.

This statement followed a joint declaration from the EU and the Philippines expressing concern over China’s actions in the waterway, underscoring the ongoing geopolitical complexities in the region.