China issues first batch of new licenses for rare earth exports

China has issued the first batch of new rare-earth export licenses, according to a Reuters source. The measure is expected to speed up shipments to specific customers and fulfill one of the key outcomes of the summit between U.S. President Donald Trump and Chinese President Xi Jinping.

The approvals come after months of disruptions caused by China’s April implementation of rare-earth export controls at the height of the trade war. By requiring companies to obtain a license for each shipment, Beijing created a shortage that disrupted segments of the automotive supply chain and increased China’s leverage in negotiations with Washington.

The new “general licenses” were designed to ease this pressure by allowing more exports through annual permissions granted to individual customers. They were one of the main results of the Trump–Xi meeting at the end of October.

Automotive industry

According to Reuters, Chinese magnet manufacturer JL Mag Rare Earth obtained general licenses for almost all of its customers. Ningbo Yunsheng and Beijing Zhong Ke San Huan High-Tech, meanwhile, received licenses only for some clients.

The three companies and China’s Ministry of Commerce did not respond to requests for comment. Company websites show that all of them supply the automotive industry, among other sectors. JL Mag has a European subsidiary, and Ningbo Yunsheng says it has customers in Europe and the Americas.

Complement to the current system

The new licenses will complement, but not replace, the existing licensing system. For now, only major Chinese rare-earth companies are eligible for general permits, but the criteria may be expanded if implementation proves successful, the source said.

Pending issues

The new licenses help align the interpretations of Beijing and Washington regarding the agreements reached during the leaders’ summit in South Korea. While the White House considered the general permits to be the practical end of China’s export controls on rare earths, the Chinese government has said little on the topic. It has not indicated any intention to dismantle its system.

It remains unclear how broadly the licenses will be issued and whether they may be limited to specific customers, such as defense-related sectors or sensitive areas like aerospace or semiconductors.

Meanwhile, European companies again complained on Monday about long delays and a lack of transparency in the current export control system.

Source: Valor Econômico

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