MofCom reportedly signals softening of REE export controls for EU semiconductor companies
Beijing wants to reassure European firms that they aren't the target of China's new export controls on rare earth elements (REEs).
On Wednesday, state-run media outlet China Daily reported that the commerce ministry (MofCom) is exploring how to ease the impacts of REE export controls on European firms.
- The report cited sources with knowledge of a symposium hosted by MofCom on Tuesday that brought together European and Chinese firms involved in semiconductor supply chains.
ICYMI: China imposed export controls on seven REEs on April 4. Though the move was part of a slew of countermeasures against US tariffs, it impacted REE exports to all countries.
Why it matters: The targeted REEs have multiple defense applications, providing an obvious justification for adding them to a dual-use export control list.
- However, they are also used in the electronics industry, including as a key input for global chipmakers.
Plot twist: By Thursday afternoon, China Daily's article had been taken offline.
- Other domestic coverage mentioning a potential relaxation of REE controls on Europe remains up, as of writing, as does MofCom's original post on the symposium – which made no mention of REE-related agenda items.
Our take: We think the scoop is credible, but officials weren't planning to make the info public – and China Daily's state media status meant its reporting was far too authoritative for Beijing's taste.
Get smart: Relaxing or streamlining the process for European firms to secure REE export licenses would be a loud, clear signal to the EU that Beijing wants to build trust and expand cooperation in the face of US trade pressure.
The bigger picture: Despite the 90-day tariff truce, Washington started imposing new tech export controls on China this week.
- That will create even more incentive for Beijing to pursue compromise and cooperation with the EU.