China has proposed establishing a 'green channel' to facilitate the export of rare earths to the European Union, according to a statement from the Commerce Ministry on Saturday.

This initiative follows Beijing's decision in April to require licenses for the export of these strategic materials, which are essential for numerous technologies, including electric vehicle (EV) batteries.

China is a dominant player in the rare earth market, accounting for over 60% of the global mining production and approximately 92% of refined output, according to data from the International Energy Agency.

The Commerce Ministry indicated that the measure aims to address concerns raised by the EU regarding China's export restrictions, which have been criticized for adversely affecting various sectors, particularly the automotive and household appliance industries.

In a statement, the ministry emphasized that 'export control on rare earths and other items is an international practice,' and expressed China's commitment to support compliant trade with the EU.

Commerce Minister Wang Wentao, during a meeting with EU Trade Commissioner Maroš Šefčovič on Tuesday, discussed the prospect of creating a streamlined process for eligible applications to expedite examination and approval for exports.

Minister Wang also conveyed hopes for reciprocal actions from the EU that would ease trade of high-tech products with China.

In response, Šefčovič remarked that China's restrictions on key materials have created an 'alarming situation' for the European car industry, impacting production lines of various household appliances as well.

The EU Chamber of Commerce in China noted improvements in the issuance of export licenses but cautioned that the changes remain insufficient to prevent significant supply chain disruptions.

The backdrop to these developments includes preparations for an upcoming EU-China summit, which will celebrate 50 years of official diplomatic relations between the two regions.

Concurrently, discussions are ongoing regarding tariffs imposed by the EU on Chinese electric vehicles, which can reach as high as 35.3%.

Officials from both sides are exploring the possibility of establishing 'price commitments' that would set minimum pricing for Chinese EV exports in exchange for a possible reduction or removal of tariffs.

The Ministry of Commerce characterized the negotiations regarding EV pricing commitments as being in their final stages, signaling ongoing efforts on both sides to reach an agreement.