China places limits on exports of gallium and germanium in response to US restrictions on the export of microchips
Beijing has decided to impose controls on critical raw materials used in the production of semiconductors, solar panels and communication systems, mainly rare earths, in a response to Washington's export blockade of more advanced microchips. This move risks undermining Biden's technology boycott campaign to limit China's advance in the high-tech and microchip sector.
“ If China chooses to weaponize these supply chains, it will greatly complicate the calculus in the United States, the European Union and Asia in terms of reducing dependence on China” , an effort that has only just begun, said Paul Triolo, senior associate at the Center for Strategic and International Studies, a Washington think tank.
He added that it would take " considerable investment and time to recreate even a fraction of critical minerals' supply chains ," noting that Beijing " almost certainly sees these controls as a potential bargaining chip, which it could use to try to persuade states US and Western governments to withdraw some elements of recent export controls on semiconductors and semiconductor manufacturing equipment ."
Germanium
Beginning August 1, exports of gallium, germanium and several other industrial compounds will be restricted to "safeguard national security and interests," China's Ministry of Commerce and Customs Administration announced on Monday. Exporters will need to get approval from the State Council, China's cabinet, for the listed items.
The announcement came hours after US Treasury Secretary Janet Yellen's plans to visit Beijing this week were made public. “ During her time in Beijing, Secretary Yellen will discuss with [People's Republic of China] officials the importance for our countries – as the world's two largest economies – to manage our relationships responsibly, to communicate directly on areas of concern and to work together to address global challenges,” the Treasury Department said Sunday.
Calling the measure in retaliation for an October 2022 US ban on the export of some cutting-edge semiconductor technologies to China, the experts said that while Beijing's restrictions "will likely have an impact on a large number of countries", Washington is "the main target".
" The US is the prime target of export controls imposed on gallium and germanium ," said Aadil Brar, a visiting scholar at National Chengchi University in Taipei.
“ Germanium is also used in important military technologies. China is taking aim at US-imposed restrictions on the sale of semiconductor chips to Chinese firms. This is a clear retaliation against US semiconductor actions,” he said, noting that since it would be difficult for President Joe Biden's administration to reverse the restrictions before the 2024 election, “this is likely to cause an escalation of the technological warfare in the medium term ”.
China is the world's largest producer of the two elements, accounting for more than 95% of global gallium production and 67% of germanium.
Between 2018 and 2021, 53 percent of U.S. gallium imports will come from China, followed by Germany and Japan with 13 percent each, according to a recent report by the U.S. Geological Survey and Department of the Interior. Ukraine with 5% and from other countries with 16%.
“In 2022, imports of gallium metal increased by approximately 34% compared to 2021, thanks to increased imports from Canada, China, Slovakia and the United Kingdom,” the report reads. As for imports of germanium, China accounted for 54 percent, followed by Belgium, Germany, Russia and other countries, with 27, 9, 8 and 2 percent respectively between 2018 and 2021. The report adds that in 2022, germanium-containing zinc concentrates were produced at mines in Alaska and Tennessee.
The US and the EU will now have to engage more in the mining and refining of these metals, and the development of this industry will be economically expensive, as well as posing problems of popularity in areas where "NIMBY" is the word order.
Meanwhile, the state-run China Daily called Beijing's move " right and proper ". “ Those who doubt China's decision could ask the US government why it holds the largest germanium mines in the world but rarely exploits them.” “Or they could ask the Netherlands why they have included some semiconductor-related products, such as lithographic machines, in their export control list.”
He concluded: “It is they (the US) who are questioning the world supply chain, and the blame that belongs to them should never be shifted to China, which is defending its legal national interests in this rather uncertain world.” .
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The article China places limits on the export of gallium and germanium in response to US restrictions on the export of microchips comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-cina-pone-limiti-allexport-di-gallio-e-germanio-in-risposta-alle-limitazioni-usa-nellexport-dei-microchip/ on Tue, 04 Jul 2023 11:01:20 +0000.