Chinese controls on exports of two metals critical to making semiconductors came into force on Tuesday, a day after Beijing imposed curbs on the foreign sales of some drones.
The Biden administration has in recent months stepped up measures to restrict Chinese companies' access to the most advanced semiconductors.
China, which seeks to become self-sufficient in semiconductor design, says those measures are aimed at maintaining U.S. supremacy in the field.
From Tuesday, Chinese companies seeking to export gallium or germanium will need to obtain a license, according to a directive from the Ministry of Commerce.
Under the new rules, they will also need to provide information on the final recipient and give details about their end use.
China accounts for 94 percent of the world's production of gallium -- used in integrated circuits, LEDs and photovoltaic panels -- according to a report by the European Union published this year.
For germanium, essential for fibre optics and infrared, China makes up 83 percent of production.
The export curbs "send a clear signal that China holds all of the power in this dangerous game", analyst James Kennedy told AFP, calling the curbs "an unambiguous message" to the United States.
"If the U.S. chooses further escalation, China's next response will have consequences."
For now, he said, China "aims to cause a minimum of damage" to the United States, because their needs in gallium and germanium are "low" and the metals can be acquired elsewhere.
The measures come as the Biden administration mulls fresh curbs on Chinese access to high-tech chips, as well as on outbound U.S. investments in China.
They also follow curbs by Beijing on the exports of certain types of unmanned aerial vehicles, also known as drones.
As of September 1, exporters will require a license laying out their end use as well as other details before they can be sold overseas.
A China commerce ministry spokesperson said the move was not aimed at "any specific country or territory".
But they did cite the risk of drones "being converted for military use" in justifying the restrictions.
China is a major exporter of drones, with the U.S.-blacklisted DJI representing more than 70 percent of global market share, according to CNBC.
The company's drones are reported to have been used extensively by both sides in the war in Ukraine.
In April 2022, DJI said it was temporarily suspending business in both Russia and Ukraine while it "internally reassess(ed) compliance requirements".
The United States has accused China of mulling arms shipments to support Russia's campaign -- claims Beijing has strongly denied.
A U.S. intelligence report last week said Beijing likely supplied Moscow with dual-use civilian-military equipment employed in Ukraine, but noted that it is "difficult to ascertain the extent to which (China) has helped Russia evade and circumvent sanctions and export controls".
© 2023 AFP
16 Comments
TokyoLiving
Excellent, well done China..
Bordeaux
Thank you, China! The more you ban, the less dependent the West is on Chinese products and trade.
Years ago, software experts reported DJI was a security risk because all flight information including images was shown to be sent through a third party server like many of the video tech made in China like video cameras on Amazon and TikTok. The rest of the data was stolen through software updates that also gave China access to people's phone data through the DJI app.
This was the main reason that US banned their use at government facilities. It is also why many countries are banning drone flight paths.
It is almost impossible to fly one in Tokyo for privacy concerns.
Thus, western nations and its allies will be more secure and protected from Russian, NK, and Chinese espionage, and it accelerates the decline of the Chinese economy which will the Chinese population to overthrow the CCP.
Eastman
so EV cars prices will go up so be ready to pay more to be "greener"...
GOOD MOVE CHINA.
Bordeaux
That will hurt Elon "The Manchurian Candidate" Musk. It will also make his "superapp" X less viable to gather everyone's data to control or manipulate people on behalf of the CCP.
ian
Not good
TaiwanIsNotChina
The BBC offers a much more positive assessment:
https://www.bbc.com/news/business-66118831
China has tried this before with the rare earths and failed.
ian
Which is?
TaiwanIsNotChina
Read the article. The percentages they have for China are way lower.
ian
If it's only that then you could just easily post the figures.
But you said first the BBC offers a much more positive assessment.
So what much more positive assessment?
Should be helpful to all readers to just cut and paste the assessment here also
Gabriel Sheffield
The semiconductor is an American invention so let China impose all the rem bands that it wants. The United States is ramping up domestic semiconductor production to decrease its dependence on Chinese semiconductors.
The CCP refuses to publicly say what the world already knows: China needs the U.S. more than the U.S. needs China.
China has a very long way to go to dethrone the United States as the world's economic and military superpower. And I don't believe it will ever happen because innovation thrives when people are free.
Peter14
Australia, one of the worlds powerhouse resources suppliers is about to begin mining and production of both the rare metals China has just restricted exporting. A great oportunity to have customers pounding on the door to buy all we can produce, all thanks to China choosing to withhold sales. Once customers secure alternate supplies they will not go back to China. China will then flood the market to try and kill competition but there will be many not willing to give up the alternative supply to China.
So China is shooting itself in the foot for a short term satisfaction of making it harder for the West to obtain supplies. The west will make do until these new sources come online. Australia is one of a few gearing up to gather and produce these rare resources and more to eliminate China's monopoly once and for all.
kaimycahl
China the country is suffering from Angina!!! Slowly killing themselves and becoming a hermit kingdom like NK!!
quercetum
The US bans chips made by Chinese raw materials. I'm sure they considered the scenario where China bans these materials used to make the chips. That's only one step. The Biden administration can't think that far ahead. They can but they're not. This is just the Tough on China election card to play.
China will no doubt rule the chip production in this World. The sanctions are helping them to be completely self-sufficient. China is the largest electric vehicle manufacturer in the world. It produces more EVs than the US, Germany, Japan, France, and Korea combined. The US has its defense contractors but China is already moving in. Skip the chips and move to the end products in question and that is arms.
Chinese defense firms are planning to produce in Turkey and fulfill a major portion of NATO's demand for weapons. China is a Commodization Colossus. The CCC is a montster of the economies of scale. It knows where it should buy commoodities and where it should sell commodities.
It goes to Saudi Arabia to seal the most profitable oil purchases and now for selling arms and weapons, it goes to Turkey and countries that will have extreme demands. 74 Chinese defense firms are slated to participate in the upcoming International Defense Industry Fair in Istanbul. Only 5 US companies are expected to attend. What is up China's sleeve?
They are looking into acquiring Turkish companies instead of establishing production lines of their own. The West thinks NATO will defeat China yet China is planning to even sell weapons to NATO. This tells you China's outlook and how many steps China is ahead of the game as well as China's manufacturing and defense endeavors.
Strangerland
So are you suggesting they should just accept what you consider to be the inevitable fate of Chinese supremacy, and pander to China instead? Or... just complaining in general. Or pushing the CCP agenda maybe?
quercetum
I tend to think iron sharpens iron. What Biden (or Trump for that matter) is helping China to corner the market. They are on their way to controlling the whole supply line for chips. Furthermore the heads of Nvidia and AMD are Chinese, and founder and culture of TSMC is very much Chinese. The U.S. needs to come up with a plan to counter China and the problem isn’t Taiwan.
China is too smart to start a war and invade Taiwan. Imo, the challenge is that they commoditize everything. They war they mass produce warships. I’ll let Desert Tortoise to share the shipbuilding capacity gap between the US and China. Something like 13 million tons versus 200,000 per year per Navy research. They can make as many drones as ears of corn in Iowa, sort of speak. And now they’re going after the US MIC.
Without chips, the ability to make advanced weapons is compromised, the US says to China.
Without the raw materials to make chips, the ability to make advanced weapons is compromised, China replies to the U.S.
You're not going to sell me bread. I won’t sell you flour. Fine. I’ll just get it somewhere else. You do that.
I doubt the Australian government can compete with the hundreds of billions of dollars the Biden administration is throwing out to encourage greater domestic investment in renewables, including diversifying supplies of critical minerals processing and rare earths refining. Canberra’s commitment to just a $500 million lending facility through the Northern Australian Infrastructure Fund will barely touch the sides of even one big new project.