China-EU trade talks make good progress

Details of China's trade talks with the EU began to emerge on Saturday. The response from businesses has been positive.

China's Commerce Minister Wang Wentao met with his EU counterpart Maros Sefcovic in Paris on Tuesday, to thrash out a way forward on a variety of issues, including the exporting of electric vehicles and the use of China's vast supply of rare earth minerals.

China owns 90% of the world's rare earth minerals – such as allanite, brockite and titanite – plus an array of magnets.

These are used in the manufacture of cars, planes, wind turbines, fighter jets and much more.  After U.S. President Donald Trump imposed tariffs on world trade – in his infamous "Liberation Day" - governments have been scrambling to work out how to trade successfully and, more importantly, with whom.

In the wake of the U.S. tariffs, Beijing took the decision to suspend exports of a wide range of rare earth and minerals, requiring companies who wished to buy them, to apply for licenses.

China's Ministry of Commerce argues that rare earth-related items have dual-use attributes for both military and civilian purposes, and that imposing export controls on such items is in line with international practice. A ministry spokesperson said on Saturday that the controls aim to better safeguard national security and interests and fulfill international obligations of non-proliferation, which reflects China's commitment to world peace and regional stability.

Beijing's Ministry of Commerce ramped up operations to process these applications, but as the weeks drew on, it became clearer that the backlog was growing and manufacturing was suffering.

German carmaker BMW predicted trouble ahead. Many other car and plane makers began to run out of rare earth minerals.

This was the backdrop to China's Paris talks with the EU. Wang Wentao and Maros Sefcovic presided over talks, which have been described as cordial and constructive.

Agreements have been reached already. Beijing has agreed to "green light" applications for licenses – and has already granted some of these. China has committed to strengthening the approval process, greatly speeding up the release of rare earths.

Since U.S. tariffs rocked the world's financial institutions, countries and regions have been forging new alliances.

These talks are being seen as a reset of China's relationship with the EU, a reset that's described as fitting and timely, as the world's second largest economy and the world's largest trading bloc commemorate 50 years of friendship and co-operation.