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Responding to resource trade disputes, China needs to focus on the long-term
As a major owner and producer of rare earth resources, China still lacks significant pricing power in the global market. This situation is not ideal and needs to be addressed. However, what matters more now is to find effective and less controversial protection methods that can reduce international disputes and avoid unnecessary tensions.
On the 4th, the Office of the U.S. Trade Representative announced that the United States, along with the European Union and Mexico, has requested the World Trade Organization (WTO) to establish an expert panel to review China’s alleged restrictions on raw material exports. With China’s deepening integration into the global economy, such trade disputes are becoming more frequent. It is important to approach these issues with a calm and rational mindset, seeking constructive solutions rather than confrontation.
According to the U.S., EU, and Mexico, China's export restrictions on key raw materials—such as those used in steel, aluminum, and chemical production—are artificially inflating global prices and giving Chinese companies an unfair competitive advantage. In response, the Chinese Ministry of Commerce has emphasized that its export policies are primarily aimed at environmental protection and resource conservation.
This creates a paradox: while some see it as "unfair" trade, others argue it is a necessary step for environmental protection. The WTO’s stance remains uncertain. Meanwhile, public sentiment in China has been strong, with many criticizing the U.S. and European actions, especially regarding rare earth exports.
As a major player in rare earths, China has long sold these valuable strategic resources at low prices, despite their high importance. This situation, however, should not remain unchanged. But the U.S. and Europe have gone further, not only targeting rare earths but also other raw materials like coke, yellow phosphorus, and fluorspar—products known for their high energy consumption and pollution levels. Given the growing global focus on environmental issues, limiting such harmful products is understandable.
Since June 2007, China has implemented measures such as raising export taxes and setting quotas to address this issue. While these steps have helped restrict production and export, it remains unclear whether they are sufficient to fully resolve the problem.
The Wall Street Journal reported on the 5th that China’s current export policy may be deemed illegal by the WTO. If China loses the case, it might be forced to lower tariffs, or face retaliatory trade measures.
Regardless of the outcome, this dispute highlights the need for reflection and policy improvement. The Chinese Ministry of Commerce has used environmental protection as a justification for its policies, but the author believes that "environmental protection" should not only serve as a reason for export controls, but also drive the development of a stronger domestic raw material industry.
In short, the goal of protecting resources and the environment is valid, but what is more urgent now is to refine the methods and approaches used, making them more reasonable, less controversial, and less disruptive to international relations.