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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 lacks pricing power in the global market. This situation is not ideal and needs to be addressed. However, what matters most now is finding effective and less controversial methods to protect these resources while minimizing trade disputes.
On the 4th, the U.S. Trade Representative’s Office announced that the United States, along with the European Union and Mexico, has requested the World Trade Organization 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 conflicts are becoming more frequent. It's important to handle them calmly and seek constructive solutions.
According to the U.S., EU, and Mexico, China's export controls on materials like those used in steel, aluminum, and chemical production have driven up international prices and given Chinese companies an unfair advantage. In response, the Chinese Ministry of Commerce has emphasized that its export policies aim to protect the environment and preserve natural resources.
This creates a delicate balance—on one side, accusations of unfair trade practices; on the other, claims of environmental protection. The WTO’s stance remains uncertain. Meanwhile, many in China have reacted strongly, often focusing on rare earth exports as the main issue.
China, as a major supplier of rare earths, has long sold these valuable resources at low prices, despite their strategic importance. This situation is clearly unsustainable. However, the U.S. and Europe have gone further, urging China not only to limit rare earth exports but also to restrict other high-energy, high-pollution materials like coke, yellow phosphorus, and fluorspar.
These materials cause significant environmental damage, and with growing global concerns about climate change, it makes sense to regulate them. Since 2007, China has introduced measures like higher export taxes and quotas to address this. While these steps have helped curb production and exports, they may not be enough to fully resolve the issues at hand.
The Wall Street Journal reported that China’s current export policies could be ruled illegal by the WTO. If so, China might face pressure to reduce tariffs or risk retaliatory trade actions.
Regardless of the legal outcome, this dispute highlights the need for reflection and policy improvement. The Ministry of Commerce has used environmental protection as a justification for its policies, but the author believes that “environmental protection†should also drive broader reforms in the domestic raw material industry.
In other words, the development of rare earths and the management of high-pollution resources like coke must be improved. Increasing resource taxes and raising the cost of raw material exports can help prevent overexploitation.
Regarding rare earths specifically, it's essential to recognize their strategic value and develop clear regulations to manage their extraction, use, and protection. These efforts should minimize controversy and avoid giving other countries a reason to complain.
Ultimately, the complaints from the U.S. and EU stem from the long-standing trend of cheap resource exports in China. As China continues to grow economically, it also relies heavily on importing strategic resources from abroad. A rigid protectionist approach could lead to criticism and complicate China’s access to other critical materials.
In conclusion, protecting resources and the environment is a legitimate goal. But for now, the focus should be on making protection strategies more reasonable, less contentious, and more sustainable in the long run.