In response to Washington’s restrictions, Beijing announced a response with restrictions on exports of civilian components to the United States and banned those intended for military use.
Gallium, germanium, antimony and other materials are subject to new regulations in China if they are to be exported to the United States. These elements likely to be used in dual technologies (both for civil and military purposes) must now obtain a license before being exported if they are for civil applications.
But exports intended “for military uses” are strictly prohibited, announced the Chinese Ministry of Commerce, citing “national security” issues.
“Any organization or individual, in any country or region, violating the regulations will be held accountable,” the ministry warns.
Responses to US restrictions
This announcement follows a third wave of restrictions, announced Monday by Washington, on sales to China of semiconductors and equipment used in the manufacture of precious chips. The objective is to “hinder China’s ability to acquire and produce the technologies necessary for its military modernization,” the US Department of Commerce said in a press release.
China strongly condemned this announcement, saying that the United States “undermines normal trade and economic exchanges”. “In recent years,” the United States has “politicized trade and technology issues,” “imposed unjustified restrictions on certain countries’ exports to China” and “sanctioned several Chinese companies,” China’s Ministry of Defense said on Tuesday. Commerce in another press release.
Élie Cohen, economist, research director at CNRS – 11/26
China represents 94% of global production of gallium, a strategic metal used in solar panels, radars and transistors, according to a European Union report published this year. It is also the source of 83% of germanium, a metalloid used in the manufacture of optical fiber or infrared receivers. China had already tightened controls on exports of these materials to the United States last year, requiring exporters to provide information on end users. The new rules now prohibit any export without obtaining a prior license.
These materials play a “critical role in the advanced technology industry”, and “many intermediate manufacturers had started to stock (them)”, underlined to AFP Brady Wang, associate director at the consulting firm Couterpoint. Graphite, one of the essential components in the manufacture of batteries for electric vehicles, is also the subject of increased attention from the Chinese authorities. The sale of graphite-based products “used for dual purposes” to the United States will be subject to “stricter” controls regarding its end use, the Chinese Ministry of Commerce reported on Tuesday.
Supply and price rise
These new rules are “clearly a retaliatory measure against the United States,” Dylan Loh, assistant professor at Nanyang Technological University in Singapore, told AFP. These “reciprocal restrictions could lead to supply chain disruptions and higher prices,” Chong Ja Ian, associate professor of political science at the National University of Singapore, told AFP.
The Internet Society of China thus in a press release “called on domestic companies to (…) be careful when purchasing American chips, to seek to develop their cooperation with chip manufacturers from other countries (. ..), and actively use chips produced and manufactured in China by domestic and foreign companies.”
The Chinese Association of Automobile Manufacturers accused Washington of having “arbitrarily amended the control rules, seriously affecting the stability of the supply of American chips.” “American automobile chips are no longer reliable and safe,” the association even added.
