EU-China Relations Tracker 5.2/10

The EU's dependency on China for critical minerals represents one of the most severe strategic vulnerabilities in the bilateral relationship. Europe is 100% dependent on China for heavy rare earth elements used in hybrid cars, fiber optics, and nuclear reactors, and 97% dependent for magnesium used in aerospace and automotive applications.

April 2025 Export Controls

In April 2025, China imposed export restrictions on seven rare earth materials and permanent magnets, requiring licenses for shipments. The impact was immediate: exports collapsed even as China's broader trade numbers surged. European carmakers have delayed production, while wind turbine and electronics sectors face spiraling costs.

The Processing Chokepoint

China's dominance extends beyond mining to refining and processing, controlling 90% of global rare earth magnet production. This means even materials mined elsewhere must typically pass through Chinese facilities for processing, creating an inescapable dependency.

EU Critical Raw Materials Act Targets (2030)

• 10% of annual EU consumption from domestic extraction
• 40% of annual EU consumption from domestic processing
• 15% of annual EU consumption from recycling
• Max 65% dependency on any single third country for each strategic raw material

Note: Current progress toward 2030 targets remains minimal for most materials. Heavy rare earths, in particular, have no viable alternative suppliers identified, making the 65% target unachievable without technological breakthroughs.

The engagement scores and overall rating presented in this tracker represent proprietary assessments by Iselin Group based on comprehensive analysis of publicly available data, official statements, and bilateral activities.

Overall Score Calculation (5.2/10)

The overall engagement score is derived from four equally-weighted pillars:

• Economic Integration (6.8/10): High trade volume but massive deficit; significant FDI but declining EU investment
• Political Dialogue (4.5/10): Regular summits but strained relations; "triple role" classification reflects complexity
• Security Cooperation (3.2/10): Minimal cooperation; systemic rival classification; technology concerns
• Cultural Exchange (6.3/10): Student exchanges, tourism, but limited people-to-people depth

Sector Engagement Intensity (Policy Area Scores)

Percentage scores for individual sectors reflect both volume of interaction and quality of cooperation, adjusted for competitive/adversarial dynamics.

Risk Assessment Framework

Risk levels represent Iselin Group's assessment based on official EU strategic communications and economic data:

• High Risk - Trade Imbalance: €306B deficit represents structural vulnerability
• High Risk - Dependencies: Critical exposure in solar, rare earths, batteries
• Medium Risk - Market Access: Lack of reciprocity, discrimination against EU firms