Listen: Why is everyone so eager to meet with China?

This week, the European Union and China will hold talks in Brussels aimed at easing trade tensions, focusing on Beijing’s restrictions on exports of rare earths and magnets, materials vital for Europe’s automotive, defence, green tech and digital industries.

All this, as Donald Trump meets Xi Jinping to discuss trade and critical minerals on the other side of the world. But why is everyone so eager to meet Chinese officials?

Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Long Story Short” hosted by Evi Kiorri. The podcast is available on all major platforms.

You can find the transcript here if you prefer reading:

This week, the European Union and China will hold talks in Brussels aimed at easing trade tensions, focusing on Beijing’s restrictions on exports of rare minerals and magnets, materials vital for Europe’s automotive, defence, green tech and digital industries. All this, as Donald Trump meets Xi Jinping to discuss trade and critical minerals on the other side of the world. But why is everyone so eager to meet Chinese officials?

China currently produces about 90 percent of the world’s processed raw materials, and has recently tightened export controls, adding new licensing requirements since 9 October. The European Commission says that out of 2,000 priority applications from EU companies for export licences, only around half have been processed.

These restrictions have raised concerns in Brussels. A planned meeting between EU trade commissioner Maroš Šefčovič and China’s commerce minister was cancelled, replaced by lower-level talks under the Export Control Dialogue.

At last week’s European Council summit, the issue of Chinese export controls was discussed by EU leaders. French president Emmanuel Macron described Beijing’s actions as “economic coercion.” The Anti-Coercion Instrument, a new EU trade defence tool adopted in 2023, was mentioned, but no decision was made to trigger it.

The EU remains heavily dependent on China for critical raw materials and magnets. European Commission president Ursula von der Leyen warned last week that “a crisis in the supply of critical raw materials is no longer a distant risk.”

Now, Europe is trying to protect key industries, from electric vehicles to renewable energy, that depend on materials China largely controls.

Brussels has been working to secure supply chains since the energy crisis exposed its dependence on Russian gas. And rare earth materials are seen as the next potential pressure point. The European Commission estimates that the EU imports almost all of its raw materials and permanent magnets from China.

At the same time, the EU is caught between major global players. Beijing is clashing with Washington over similar export controls, while the US and China are preparing for a high-level meeting between presidents Donald Trump and Xi Jinping later this week in South Korea.

So, both Washington and Brussels are trying to stabilise relations with Beijing, but from different positions of leverage. China continues to hold the upper hand when it comes to access to critical minerals.

So, what’s next?

In response, the European Commission is preparing a new strategy called RESourceEU, designed to reduce Europe’s dependency on Chinese raw materials.

The plan will focus on diversifying supply, developing recycling systems, and forming partnerships with countries such as Ukraine, Australia, Canada, Kazakhstan, and Chile.

Von der Leyen says the EU must act with the same urgency it showed when cutting its reliance on Russian fossil fuels. But so far, Europe remains dependent on Chinese exports to keep its green and digital transitions on track.

For now, the Commission is opting for dialogue, not confrontation. The Anti-Coercion Instrument, sometimes described as the EU’s “trade bazooka,” requires the backing of a qualified majority of member states, support that does not currently exist.

So the meetings in Brussels will be more about preventing escalation than imposing consequences. Because Europe needs the materials that power its industries and Beijing knows it.