Reportedly, China has fully implemented a tracking system in the rare earth magnet industry, further tightening the export management of this strategic resource.
On the 5th, foreign media cited three informed sources reporting that the tracking system has been implemented nationwide since last week. It requires rare earth magnet manufacturers to report more information online, including transaction volumes and customer names.
According to informed sources, as early as June last year, the Chinese government announced a high-level plan to establish an information traceability system for rare earth products, but no progress was seen until the system officially launched last week.
This new review mechanism indicates that China's export restrictions on rare earth and magnet products may be moving towards normalization.
China is the world's largest supplier and exporter of rare earth magnets, occupying almost a monopoly position. In April this year, the Chinese government imposed export restrictions on seven categories of medium and heavy rare earth elements and certain magnets, requiring exporters to apply for licenses.
Delays in the approval process have disrupted supply chains in several industries such as automotive manufacturing and semiconductors. Some international car manufacturers have begun to suspend some production lines due to impending inventory shortages.
Informed sources revealed that Beijing's long-term plan is to implement comprehensive tracking of the entire rare earth industry chain, not just limited to magnet products, to strengthen industry supervision and combat illegal activities such as smuggling, illegal mining, and tax evasion.
EU Trade Commissioner Maroš Šefčovič revealed at an OECD meeting in Paris, France on the 4th, that he expressed concerns to China's Minister of Commerce Wang Wentao about China's tightening of rare earth and magnet export restrictions, describing the relevant measures as "highly disruptive."
Šefčovič pointed out: “I explained to the Chinese side the severe challenges currently facing the European automotive industry, but I would rather say the predicament of the entire industrial sector, because it is clear that rare earths and permanent magnets are crucial to industrial production.”
He disclosed that during the talks, Wang Wentao introduced China's "dual-use" export system for civil and military materials. The two sides also compared the trade data they each held. Šefčovič stated that there were discrepancies in the data, and the EU plans to provide China with relevant data submitted to the European Commission by affected enterprises.
He added that once the data is further clarified, further consultations will take place "relatively soon." Šefčovič said the EU hopes to establish a systematic solution mechanism to prevent companies from being pressured by the complex export approval process in the future.