In an email to SCMP , a US State Department spokesperson said China’s actions underscore the need for supply chain diversification. Washington and its allies and partners will address this and build resilience in critical supply chains.
The metal export curbs are Beijing's first major move in response to what Washington has done to limit China's use of US technology in developing military applications and advanced computing.
On July 3, citing national security and interests, China's Ministry of Commerce announced export controls on germanium and gallium products from August 1. Analysts believe this will further intensify the US-China trade war, affecting efforts to reduce dependence on China for essential materials.
It will take time and significant investment to recreate even part of the critical minerals supply chain, according to Paul Triolo, senior vice president of strategic consulting firm Albright Stonebridge Group.
Beijing informed the US and EU of its decision in advance through export control dialogue channels. China is the world's largest producer of germanium and gallium, accounting for more than 95% of gallium production and 67% of germanium production.
Beijing sees the new controls as potential leverage in negotiations with Washington over access to core technology, Mr. Triolo said. On July 5, former Chinese Commerce Minister Wei Jianguo said the export controls were “just the beginning of China’s countermeasures.”
According to the Wall Street Journal , the Biden administration is considering new regulations that would ban Chinese companies from using US cloud computing services such as Amazon and Microsoft. In October 2022, Washington banned the export of some advanced semiconductor technologies to China. Last week, the Netherlands announced export controls on high-end chip manufacturing.
US allies are assessing the impact of the new restrictions on their economies and looking for ways to respond. The EU has called on Chinese authorities to use an approach in which controls and restrictions are based on clear security considerations in line with World Trade Organization rules.
(According to SCMP)
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