China Rare Earths Policy Misunderstood, Think Tank Says

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00:00Let's start with that statement from the Ministry of Commerce. It seems like there is still some

00:04cooperation that the Chinese still want leading up to, of course, this APEC meeting. Do you think

00:10that this meeting will still, first and foremost, take place?

00:14I don't think that there are a lot of obstacles for both leaders to meet with each other if we

00:20are able to reach some of the concerns. I don't think that is the preconditions for, you know,

00:25the following occasions to happen. But I, you know, personally, I'm not involved in this kind

00:31of business is often for meetings arrangement by the two countries. But I would say that the

00:37mechanism between the two countries, the governments to talk about the trade are still there.

00:42We continue to discuss about the possibilities and also what we want to have in the coming future

00:48about the different issues, including some of this misunderstanding and also some mechanism,

00:53some new mechanism or institutional arrangements. I think it's likely, you know, we are going to

00:59continue with that because the market is waiting for us to make more clearance about what we are

01:04really want to have. Yeah. Jomi, David here, since you mentioned misunderstanding, I want to get your

01:12opinion on what you think was the biggest misunderstanding. I think that as you mentioned

01:19just now that, you know, some people think that China do not want to export our real earth products.

01:25And I don't think that is the truth because we still are, you know, encouraging the companies to

01:30follow the market rules and trying to do the business with other trading partners. I know that

01:35China's real earth industry is very strong, but it's not only because our domestic market, we depend

01:42a lot on the global market. But the global market is based on some rules and certainty.

01:47So if we are continue to support the government, I mean, the government to support enterprises in

01:52different ways to trying to give them more confidence, I think that the supply chains can

01:57be strengthened. But we have to say that, you know, there are some kind of misunderstanding about

02:03China's practice. This is trying to stop the export to United States. I don't think that is the truth.

02:08We are trying to fulfill our commitments in the laws of the export control. That is a system that we want to

02:15safeguard our national security and also trying to contribute to the world. Can you tell us on how

02:24the enforcement side of these export curbs, Jomi, I'm just wondering, because does China have the

02:30capacity? What tools does it have to really kind of, you know, check these, you know, products contain

02:36traces of certain rare earths to be effectively implemented beyond its borders? This whole long arm

02:41jurisdiction side of things. Does it have the capacity to do so? Yes, it is a very good question,

02:48because, you know, when we are trying to start a new mechanism or regulations, I think that we still

02:54need some time to observe the procedures. First of all, we need to publish the kind of instructions on

03:01the businesses who really want to have that export, you know, from China about rare earths. I think that

03:07we are setting up some mechanism to coordinate different ministries and also the regulations

03:14parties and also trying to give them very clear signals about whether they are required to provide

03:21the information to the related ministries. I think it's a first step. We are going to strengthen the

03:27abilities, not just by, you know, the company side. We are also trying to improve our own abilities in

03:33dealing with such a kind of a difficult and very complicated situation. So in the meanwhile,

03:38I think it's worthwhile for, you know, a lot of more communications and the discussions between

03:44the governments. If the governments are able to have a more, you know, channel of communications,

03:50then we are shortened the time for the people, for the companies to adapt to the new regulations.

03:54Yeah, I think you make a very good point that, you know, the U.S. should not identify itself as a

04:04target, you know, of these controls. This is something that China is looking to do with all

04:10its markets and all its trading partners. And I'm curious, improving the communication lines between,

04:16you know, the Ministry of Commerce, let's say Chinese officials and its trading partners.

04:20There was a lot of misunderstanding when the news broke last week. In fact,

04:23I remember during the shows this time last week that we had to figure out what was happening. And

04:29I wonder whether China communicated what was announced last week with other trading partners

04:36ahead of that announcement. Well, I'm not quite sure about, you know, the communication between

04:45different countries, but I would believe that, you know, the public announcement is a very

04:50official one that we state out what we are going to do in such a time. I think all these procedures

04:56are, you know, following our suit by the government and related laws and the regulations and to do with

05:03real earth. I think we are having more discussion about the targets. I don't think that, you know,

05:09China wants to export or can show our export to the U.S. But on the other side, we are saying that

05:16the United States is trying to put more Chinese companies in the so-called entity list and that

05:21really are, you know, putting so many Chinese companies in the danger. I didn't hear any of these

05:28messages from, you know, the U.S. side before they are putting Chinese companies in that list.

05:33So I think that is also natural for China to do the similar things. We are trying to safeguard our own

05:40national security. We don't have to, you know, require the opinions from the other side. If it's

05:47just the following the practice of the international communities, we're not just trying to do something

05:52unilaterally. I think it's a practice is to follow our law requirements.

06:01You mentioned a little bit more about, you know, maybe limiting the collateral damage that you still

06:06want to ensure that global supply chains are still intact. There is, after the controls that were set

06:13in April, there was a narrative out there that China might be disrupting global supply chains and that

06:20it is looking to be China is an unreliable supplier in some ways. How do you think China is responding to

06:27that? Are they better prepared this time around to process these applications? Well, if you're looking at

06:33data, I mean, yesterday, China published the data of the September international trade and the first

06:40three quarters, you know, they are coming and continuously three quarters of China's export to

06:45other countries are keeping on the trend of increasing. I think that proved our very important

06:51fact that all the, you know, many trading partners of China are still trying to count on the China's

06:58export. I think it's really a good proof that we are able to provide a better support to other

07:03countries. So for the supply chain, in my understanding, you know, China is the number one country for the

07:08international trade. We are not want to put us in the very dangerous position of interrupted that and

07:15disrupted that. So for us, the best benefit for us is to give the market more confidence and more

07:21sustainability. I think that is what we are really want to have. So even to the real earth, I think that China is the

07:27largest stakeholder of that, but we are not just the producer of the raw materials. We're still having

07:33so many manufacturers, they are demanding a lot of more demand of this real earth products. So that

07:40means that we are able to coordinate with our trading partners and make a better balance based on the,

07:46you know, the demand and the supply.

07:49Joby, a final question before we let you go. And thank you so much, by the way, for being patient

07:55with us. Do you think a grand bargain is still, grand trade deal is still achievable? Are you

08:02optimistic that we can achieve? We can see one from both sides in two weeks. And apart from rare earths,

08:07what else, what other sticking points do you think still remain on the table?

08:12Well, you know, it is always the same with China side that we think that the relation between China

08:21and United States are mutual beneficial. We should respect each other. And these relations are

08:27benefiting both sides, not just the government, but also the market and the prices. So if United States

08:32still able or still want to do that, I think it's possible and most likely to happen in the future that

08:40we can reach some consensus on the practices and trying to give the markets more confidence.

08:45So for us, I think the most important thing that the other side is not just trying to

08:51abandon what they have promises. They have to keep their words and they have to move forward

08:56to trying to reduce the more interference with the relation between us. And that is very

09:02important for us to build the trust-based relations between our two countries.

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