By Meng Hao, Vision Times
As geopolitical tensions and supply chain concerns continue reshaping the global economy, finance ministers and central bank officials from the Group of Seven (G7) gathered in Paris this week with a growing focus on reducing Western dependence on Chinese rare earths and critical minerals.
The two-day meeting, which began on May 18, centered on the economic fallout from the Middle East conflict, volatility in global energy markets, and mounting concerns over China’s dominance in key industrial supply chains. At the same time, the European Union (EU) is reportedly preparing new regulations aimed at forcing companies to diversify suppliers for strategic components, in a move widely seen as part of a broader “de-risking” strategy toward China.
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According to a recent report by the Financial Times, EU officials are considering rules that would require companies in sectors such as chemicals and industrial machinery to source components from at least three separate suppliers. The proposal would also cap purchases from any single supplier at roughly 30 to 40 percent, with the remaining sourcing required to come from multiple countries.
Reducing reliance on Beijing
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European officials say the goal is to reduce vulnerabilities exposed by Beijing’s export restrictions on rare earth magnets and other critical materials. Last year, Chinese export controls disrupted parts of Europe’s automotive sector and reignited fears that supply chains could increasingly be used as geopolitical leverage.
Maros Sefcovic, the EU’s trade commissioner, has emerged as one of the leading advocates for the policy shift. Brussels is also reportedly considering punitive tariffs on selected Chinese chemical and machinery imports as concerns grow over heavily subsidized Chinese exports flooding European markets.
Officials have also warned that Europe’s growing dependence on Chinese exports comes with significant economic and strategic risks, particularly as heavily subsidized Chinese manufacturing places mounting pressure on European industry.
Meeting highlights supply chain security
The Paris gathering reflected similar concerns among G7 economies. French Finance Minister Roland Lescure said the meeting aimed to demonstrate that “multilateralism is useful and can work,” even as geopolitical divisions intensify globally.
Officials discussed how the global economy faces mounting structural imbalances, including weak domestic consumption in China, overconsumption in the U.S., and underinvestment in Europe. Participants also addressed the risks posed by continued instability in the Middle East, particularly the threat of disruptions in the Strait of Hormuz, a critical artery for global oil and fertilizer shipments.
German Finance Minister Lars Klingbeil stressed the importance of preserving freedom of navigation through the strait and called for efforts to stabilize the region amid rising energy and fertilizer prices.
While French officials said there were currently no active discussions about releasing strategic oil reserves, they acknowledged such measures could be considered if shipping disruptions become prolonged.
The race for rare earths
Rare earths and critical minerals have increasingly become central to strategic competition between China and Western economies. China currently dominates large portions of the supply chains tied to electric vehicles, renewable energy systems, semiconductors, and defense technologies.
G7 officials signaled they want greater coordination to diversify supply routes, improve stockpile management, and develop alternative production partnerships.
French officials compared the challenge to the energy crises of the 1970s, arguing that critical minerals should now be treated as a collective strategic priority. The discussions align closely with the EU’s broader push for “strategic autonomy,” as governments increasingly view supply chain resilience as both an economic and national security issue.
Accelerating ‘de-risking’
The Paris meeting underscored a broader shift underway across Western economies: moving away from maximizing globalization efficiencies toward prioritizing supply chain security and industrial resilience. Still, analysts note the transition will not be easy. Diversifying suppliers could raise costs for European manufacturers in the short term, while divisions remain within the G7 over how aggressively to confront China economically.
International Monetary Fund Managing Director Kristalina Georgieva urged governments to avoid policies that could further destabilize global markets, while Joachim Nagel said policymakers should take steps to reassure investors amid rising uncertainty.
Analysts say that if the EU’s proposed supplier diversification rules are formally adopted, they could mark a major turning point in Europe’s industrial policy. Combined with coordinated G7 efforts, the measures would significantly accelerate the restructuring of global supply chains away from heavy reliance on China.
