Nicolas at the French Institute of International Relations said that the discovery of such a massive deposit of rare earth elements in Europe “may turn out to be a game changer” because it may help the EU further reduce its dependence on Chinese imports.
“It is worth stressing here that the point is not about decoupling from China, but simply about mitigating what is perceived as a situation of over-dependence and a source of vulnerability,” she said.
Echoing Nicholas, Natixis’ Garcia-Herrero said that “this is not decoupling, but successful diversification”, as the European Union is already reducing its dependence on China by reshuffling parts of its value chain.
However, Andersson’s perspective is that there is “clearly political will” in Europe for the selective or partial decoupling from China in the technology sector.
“The EU wants to maintain strong and healthy trade relations with China, but it is also concerned about the risks of over-reliance on Chinese technologies in some sectors, as well as about the lack of reciprocity in trade and investment practices,” he added.
But as Nicholas points out, it would take at least 10 to 15 years before the rare earths mined in Sweden hit the market.
“Exploration of the site will not start for years, even if permits are delivered very fast,” she explained. “Moreover, the whole project is likely to face resistance due to its potentially harmful environmental and social impact.”
