Oleg Gurshev, CASE Economist, spoke to Rzeczpospolita about the European Union’s dependence on China for critical raw materials and the options available to reduce it.
As Gurshev points out, for a number of critical raw materials, more than 80% of EU imports come from China, while dependence on China for rare earth elements (REEs) reaches 90%. These materials are essential to many of Europe’s strategic industries, from the automotive and defence sectors to sustainable energy and digital technologies, as well as data centres, drones and MRI equipment.
The challenge extends beyond Europe. Other advanced economies, including the United States, Japan, South Korea and the United Kingdom, face similar dependencies. At the same time, China holds a dominant market position in both unprocessed rare earth elements and products made from them, including permanent magnets. This makes diversifying supply particularly difficult.
One option under consideration is to expand Europe’s own raw-material processing capacity. Gurshev, however, highlights an important paradox: greater domestic processing capacity would not eliminate the need to source unprocessed rare earth elements from China. In some respects, expanding European production and processing could therefore increase demand for Chinese raw materials and deepen this dimension of the EU’s dependence.
Read more in Rzeczpospolita: “UE zaostrza kurs wobec Chin. Oto gdzie Europa może szukać ratunku”
