European Council President António Costa has told Chinese Premier Li Qiang that the European Union is seriously concerned by Beijing’s decision to widen export controls on critical raw materials, using a bilateral meeting on the margins of the ASEAN summit in Malaysia to press for access and predictability in supplies.
According to Costa’s account of the discussion, the EU also set out its expectation that China should use its influence to help bring Russia’s war against Ukraine to an end. The message reflects the EU’s broader diplomatic line that Beijing’s positions on security and trade are increasingly intertwined with European economic resilience.
A readout from the Chinese side, carried by state media, said Li was willing to “expand and deepen” trade cooperation with the EU on an “optimised and balanced” basis, while calling for a fair, non-discriminatory business environment for Chinese companies operating in Europe. The emphasis on balanced ties tracks with recent Chinese statements following senior-level contacts with EU leaders.
The exchange comes amid an escalation in global competition over minerals essential for advanced manufacturing. Earlier this month, China broadened its rare-earths controls by adding elements and refining technologies to its list, and tightening scrutiny of end-users in sectors such as semiconductors. Brussels has warned that countermeasures remain possible if European industry faces sustained disruption.
Trade frictions between Brussels and Beijing have widened over the past two years across multiple files. The EU has pursued measures addressing market access and subsidy concerns in sectors including electric vehicles, while China has criticised what it views as discriminatory treatment. Both sides have nevertheless kept channels open, with the Commission confirming that officials will meet under the Export Control Dialogue to address rare-earths and other contentious issues.
A further source of tension is the Netherlands’ emergency intervention at Nexperia, a Chinese-owned chip supplier whose components are widely used by European carmakers. Dutch authorities moved at the end of September to assume special control powers over the firm, citing national-security risks linked to its parent, Wingtech. China, where most of Nexperia’s chips are packaged, responded by blocking exports of finished products, prompting warnings from the automotive sector over possible supply-chain interruptions. The Dutch government has said it aims to resolve the matter swiftly.
EU leaders discussed these strains at last week’s Brussels summit. While the bloc has sought to reduce strategic dependencies through its Critical Raw Materials Act and related initiatives, industry remains exposed to short-notice policy shifts by dominant suppliers. The Commission’s recent engagement with Chinese counterparts is intended to secure predictable licensing and shipment processes while avoiding a spiral of retaliation.
For Beijing, controls are framed as legitimate steps to protect national security and ensure orderly development of a sector in which it holds substantial market share. Chinese officials have also linked their position to broader debates on export restrictions and tariffs, arguing that recent moves by Western economies have increased uncertainty. The juxtaposition of these narratives has complicated attempts to rebuild trust after a period of accelerated trade-defence activity on both sides.
Against this backdrop, both Costa and Li signalled a preference for dialogue. Li urged the EU to resolve differences through consultation and “mutual understanding and accommodation”, while Costa underlined the need for practical solutions that preserve industrial continuity in Europe. The immediate test will be whether experts can engineer technical fixes—such as clearer guidance on licensing and end-use verification—that stabilise flows of rare-earths and related inputs.
The timing of the Kuala Lumpur meeting, during a regional summit overshadowed by wider debates on tariffs and supply chains, underscores how European-Chinese relations are now deeply enmeshed with global trade dynamics. With major economies adjusting industrial policy and screening rules, even single-company disputes such as that around Nexperia can ripple through production lines far beyond Europe and China. For EU policymakers, the priority remains to de-risk without decoupling: maintaining channels with Beijing while building alternative sources and recycling capacity at home and with trusted partners.
If the coming rounds of the Export Control Dialogue yield tangible improvements, a measure of stability could return to a relationship that both sides describe as strategically important. If not, pressure will grow in European capitals for defensive steps that could harden dividing lines in critical-materials trade. For now, the message from Kuala Lumpur is that the EU has put its concerns squarely on the table—and expects movement.
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