Rare earths exports will not be disrupted, China assures EU

China has assured the European Union its rare earths shipments to the bloc will not be disrupted, EU Trade Commissioner Karel De Gucht said in Beijing on Tuesday.

De Gucht was speaking to the media after the conclusion of the third EU-China High Level Economic and Trade Dialogue in the Chinese capital. He did not provide further details, but the Chinese assurance counts for much given recent episodes of the Chinese halting its rare earths shipments to Japan, the U.S. and the European Union.

It was reported on September 21 that China had abruptly stopped the processing of documents for Japan-bound rare earth shipments. The Chinese decision followed the breakout of a fresh row between the two countries over the disputed islands in the South China Sea. China twisted the balance of an ongoing fist fight over the Senkaku islands which both countries claim as their own, by mixing business with politics in a crude fashion.

China reportedly halted some shipments of the rare earths to the U.S and Europe between October 18 and 28. This was seen as a retaliatory action by the Chinese as the U.S. government started an inquiry into Beijing’s possible violation of international free trade rules with its green energy policies.

While China denied clamping down on rare earths exports to the U.S. and the European Union, it officially restarted shipping rare earths to Japan last month.

Rare earths are indispensable for high-tech industries and are heavily in demand in defense systems, electric cars, wind generators, hard-disk drives, mobile communication, missile guidance and the like. The 17 rare earth elements are lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium and yttrium.

Technically viable alternatives to rare earth materials are not known currently, and countries dependent on rare earths have no option but to put in place long-term plans to build alternative resources. China accounts for almost 97 percent of global rare earths exports.

China, which became the world’s largest exporter this year, is also just about to dethrone Japan as the world's second largest economy. The bilateral trade between the Asian giant and the European Union has risen from 4 billion pounds in 1978 to 296 billion pounds in 2009.