The Chinese Communist government announced that it will restrict exports of two minerals essential for the production of electric vehicles, solar panels and state-of-the-art weaponry. This is one more step in the escalation of the war for dominance over the semiconductor market between China and the U.S., which is essential for the control of the latest generation of technology. The announcement came the same week that Treasury Secretary Janet Yellen is expected to visit Beijing.
#ChipWar continues as China hits back at US-led semiconductor restrictions by seeking to throttle exports of 2 metals used in chipmaking and communications.
“Gallium and germanium will be subject to export restrictions in order to “safeguard national security and interests”,… pic.twitter.com/qPbsw2LL9e
— Theresa Fallon (@TheresaAFallon) July 3, 2023
"To safeguard national security and interests"
In a statement issued Monday, Chinese authorities announced that, "to safeguard national security and interests, with the approval of the State Council, it has been decided to implement export controls on gallium and germanium-related items." The restrictions will begin to apply on Aug. 1. As of this date, items meeting certain characteristics may not be exported without authorization. The ministries submitted a list that includes eight gallium-related items and six germanium-related items.
According to the control protocol, exporters must submit an application to the local trade authorities in order to export the products and must receive approval from the Ministry of Commerce before they can send them out of the country. Those who export these products without a permit will face fines and criminal charges.
China is the largest producer of both minerals
At present, China is the largest producer of both minerals, which are essential for the production of semiconductors and other electronic products. Germanium is used in fiber optics and semiconductors, while gallium is needed to manufacture chips for electronic devices such as computer motherboards or portable phones, according to media reports.
FACTBOX Where are strategic materials germanium and gallium produced? https://t.co/h4g6SCDCsJ pic.twitter.com/uakce1tJAb
— Reuters (@Reuters) July 4, 2023
Chinese officials and analysts agree with the measure
Although the Communist government gave no further explanation, the regime’s official newspaper Global Times (GT) said that "the measure takes place in a time when the United States and some of their allies are relentlessly stepping up the crackdown on Chinese technological development in various fields, including semiconductors."
The WG, quoting a national analyst, warned that "as the United States and its allies continue to escalate their chip war and technology crackdown, it is normal and, in fact, crucial for China to take proactive measures to safeguard its technological development and national security and interests."
Gallium and germaniuma belong to dual-use materials. It is a common international practice to impose export controls on them. EU members also impose export controls on some of these materials. #China has imposed relevant export controls in accordance with the law to ensure the… pic.twitter.com/5EK2OcD4At
— Global Times (@globaltimesnews) July 5, 2023
