Latest news with #FederationofGermanIndustries
&w=3840&q=100)
Business Standard
19-05-2025
- Business
- Business Standard
How China's slow approval of rare earths is threatening supply chains
China's sluggish approval of rare earth exports is threatening to disrupt global supply chains, the Financial Times reported, with exporters and industry bodies warning that delays are already affecting European manufacturers and could soon hit other major economies including India. While the Chinese commerce ministry has started granting some export licences, reportedly to select European-bound shipments, the pace is far too slow to meet industrial demand. 'The window to avoid significant damage to production in Europe is rapidly closing,' Financial Times quoted Wolfgang Niedermark of the Federation of German Industries (BDI) as saying. An unnamed European executive based in China described the delays as 'untenable' and said officials had 'underestimated' the operational requirements of enforcing the restrictions. Why did China impose export controls on its rare earth minerals? Beijing introduced new export controls in early April on seven rare earth elements and related permanent magnets, materials crucial for the production of electric vehicles (EVs), wind turbines, fighter jets, and advanced electronics. The move followed sweeping US tariffs, announced by President Donald Trump. While tariffs were announced on all US trade partners, China has been especially targeted by the Trump administration's new trade policy. The tariff announcement marked an escalation in ongoing trade tensions between the two powers. How is China controlling rare earth mineral exports? The restrictions come under China's rights as a signatory to the international Non-Proliferation of Nuclear Weapons Treaty, which allows it to regulate exports of "dual-use" items. The applies to products that can be used for both civilian and military applications. Also Read How does China export restrictions impact global supply chains? Rare earth elements like terbium, dysprosium, and samarium are critical to modern industry. They are essential for manufacturing everything from electric motors and MRI scanners to laser surgery devices and precision-guided military systems. But it is not their scarcity that makes them so strategically important — it's China's grip over the supply chain. While rare earths are found in several countries, China accounts for 61 per cent of global production and 92 per cent of processing, according to the International Energy Agency. Processing rare earths is expensive and environmentally hazardous due to their radioactive by-products, which has led most other countries to scale back or abandon domestic production. As a result, the world is highly reliant on China not just for supply, but also for refinement and distribution. By tightening its control over exports, Beijing is effectively deciding who can access these essential materials and when. Which other countries can process rare earth minerals? While Japan has begun reviving its rare earth industry, the US and othe rnations, including India, remain deeply dependent on Chinese exports. Trump in April ordered the US Commerce Department to identify strategies for boosting domestic production, but progress has been slow. Impact on auto industry Global automakers, including Tesla and Volkswagen, as well as US defence contractors like Lockheed Martin, have already raised concerns about the export delays. With four Chinese rare earth magnet producers, some of whom supply global giants like Volkswagen, recently granted export licences, there is hope of some relief. But experts warn that these approvals are selective and fail to address the broader risk of disruption. Impact of China's rare earth minerals on India The pressure is also being felt in India, where EV manufacturers are facing potential shortages of rare earth magnets used in electric motors, power steering systems, and braking units. Industry sources told The Indian Express that Chinese suppliers are now demanding undertakings that the magnets won't be used for military purposes. There is also growing pressure on Indian carmakers to buy entire electric motor assemblies from China, rather than sourcing just the magnets, as a way to bypass red tape. These magnets, especially neodymium-iron-boron (NdFeB) magnets, are critical to EV performance due to their strength and efficiency. Any disruption in their supply could delay production timelines and increase costs, particularly damaging for India's price-sensitive EV sector.
&w=3840&q=100)
First Post
18-05-2025
- Business
- First Post
China's rare earth export curbs are stirring global supply chain fears
China's new controls require exporters to submit end-use certifications to ensure materials are not used for military purposes or re-exported to the United States— a key condition under the licensing terms read more A mining machine is seen at the Bayan Obo mine containing rare earth minerals, in Inner Mongolia, China. File photo/Reuters China has begun approving limited exports of rare earth elements under its new licensing regime, but delays in processing have raised alarm among global manufacturers about potential disruptions to critical supply chains. Beijing introduced export controls in early April on seven rare earth elements and related permanent magnets essential to products such as electric vehicles, wind turbines, fighter jets, and humanoid robots. The move was widely seen as a response to a sweeping tariff package announced by US President Donald Trump on April 2. STORY CONTINUES BELOW THIS AD While Chinese commerce officials have since granted some export licenses— including to companies supplying customers in Europe— industry participants say the approvals have been too slow and too limited to meet demand. 'The window to avoid significant damage to production in Europe is rapidly closing,' Financial Times quoted Wolfgang Niedermark, a board member of the Federation of German Industries, as saying. Volkswagen confirmed that its German operations had received rare earth supplies, noting that a 'limited number' of licenses were issued to its suppliers. Other European manufacturers said they were still struggling to navigate China's export bureaucracy, with one unnamed executive calling the delays 'untenable.' The new controls require exporters to submit end-use certifications to ensure materials are not used for military purposes or re-exported to the United States— a key condition under the licensing terms. Several exporters and buyers said the requirements were unclear and difficult to fulfill. Rajesh Jejurikar, head of the automotive division at India's Mahindra & Mahindra, said the certification process remained opaque. A manager at Chengdu Galaxy Magnets said her company was assisting clients with statements for export approval, but any applications related to military use were categorically rejected. The controls have prompted concern from major US companies, including Tesla, Ford, and Lockheed Martin. Lockheed, whose F-35 fighter jet uses rare earth magnets, said it has adequate supplies for now, and expects the US government to prioritise access. STORY CONTINUES BELOW THIS AD Some suppliers say limited material continues to flow. Yantai Zhenghai Magnetic Material, based in eastern China, confirmed it had resumed taking orders after receiving export licenses. Other sources said certain long-standing clients were still receiving shipments even before formal approvals were granted. 'There is still material going out,' said Cameron Johnson, a supply chain expert at Tidalwave Solutions in Shanghai. However, questions persist over whether China has resumed exports to the U.S. since both countries agreed to a temporary 90-day ceasefire in their tariff dispute. Analysts say Beijing's strategic advantage lies in maintaining uncertainty. 'Everyone wants Mofcom to provide clarity,' said Cory Combs of Trivium China, referring to China's Ministry of Commerce. 'But China's strategic leverage relies partly on the ability to pull the export control lever to the extent that the US does not provide a satisfying deal.' With no full resolution in sight, experts say the episode will likely accelerate Western efforts to diversify supply chains and reduce dependence on Chinese rare earths. STORY CONTINUES BELOW THIS AD
France 24
08-05-2025
- Business
- France 24
Can new German chancellor cure 'the sick man of Europe'?
Europe's largest economy finally has a leader. Conservative Friedrich Merz was elected as German chancellor on Tuesday, but only after a second round of voting in the Bundestag. The unprecedented failure in the first round has raised doubts about the new government's ability to revive a flagging economy through reforms. Germany's industrial base, once the backbone of its economy, is eroding. What needs to be done for the country to bounce back? FRANCE 24's Yuka Royer talks to Frederik Lange, senior manager for research of industrial and economic policy at the Federation of German Industries.
Euronews
29-01-2025
- Business
- Euronews
Germany cuts 2025 economic growth forecast to 0.3% amid structural challenges
The German government has lowered its forecast for economic growth in Germany in 2025 to 0.3%, the country's economy minister said on Wednesday. The new projection is much lower than the government's previous forecast of 1.1% growth, issued in October. Germany has managed no meaningful economic growth in the past four years as it has struggled to deal with major shifts in the global economy and with structural challenges of its own. Preliminary figures released two weeks ago showed that gross domestic product contracted by 0.2% last year, following a 0.3% decline in 2023. Export-oriented economies hit 'particularly hard' The economy is one of the top issues in the campaign for an early German parliamentary election on 23 February. It is being held seven months before it was originally scheduled after Chancellor Olaf Scholz's three-party coalition collapsed in November in a dispute about how to revitalize the economy. Contenders to lead the next government have made contrasting proposals on how to get it growing again. Vice Chancellor Robert Habeck, who is also Germany's economy minister, said in a statement that 'the global crises of recent years have hit our industry- and export-oriented economy particularly hard,' although an energy crunch was headed off after Russia's full-scale invasion and inflation has fallen. Delayed reforms and held-back investments He said it has become increasingly clear that Germany suffers from fundamental structural problems including a shortage of skilled labour, 'overflowing bureaucracy and investment weakness, in private as well as public investment'. Habeck pointed to 'the currently high uncertainty' about U.S. economic and trade policy and uncertainty about Germany's own post-election course as a brake on sentiment for investment and consumers. Germany's main industry lobby group on Tuesday issued an even gloomier outlook for this year. It forecast that the economy will shrink again, contracting by 0.1%. 'For years, governments have delayed important reforms, held back investments and made do with the status quo,' said Peter Leibinger, the head of the Federation of German Industries, or BDI.
Nahar Net
29-01-2025
- Business
- Nahar Net
Germany's government slashes its economic growth forecast for this year to 0.3%
by Naharnet Newsdesk 29 January 2025, 17:37 The German government on Wednesday slashed its 2025 growth forecast for the country's economy, Europe's biggest, to just 0.3% after it shrank for two consecutive years. The new projection is much lower than the government's previous forecast of 1.1% growth, issued in October. Germany has managed no meaningful economic growth in the past four years as it has struggled to deal with major shifts in the global economy and with structural challenges of its own. Preliminary figures released two weeks ago showed that gross domestic product contracted by 0.2% last year, following a 0.3% decline in 2023. The economy is one of the top issues in the campaign for an early German parliamentary election on Feb. 23. It is being held seven months before it was originally scheduled after Chancellor Olaf Scholz's three-party coalition collapsed in November in a dispute about how to revitalize the economy. Contenders to lead the next government have made contrasting proposals on how to get it growing again. Vice Chancellor Robert Habeck, who is also Germany's economy minister, said in a statement that "the global crises of recent years have hit our industry- and export-oriented economy particularly hard," although an energy crunch was headed off after Russia's full-scale invasion and inflation has fallen. He said it has become increasingly clear that Germany suffers from fundamental structural problems including a shortage of skilled labor, "overflowing bureaucracy and investment weakness, in private as well as public investment." Habeck pointed to "the currently high uncertainty" about U.S. economic and trade policy and uncertainty about Germany's own post-election course as a brake on sentiment for investment and consumers. Germany's main industry lobby group on Tuesday issued an even gloomier outlook for this year. It forecast that the economy will shrink again, contracting by 0.1%. "For years, governments have delayed important reforms, held back investments and made do with the status quo," said Peter Leibinger, the head of the Federation of German Industries, or BDI.
