China bans exports of two metals EU considers to be of ‘strategic’ importance

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solo5 July 2023Last Update : 3 months ago
China bans exports of two metals EU considers to be of ‘strategic’ importance

China has banned exports of gallium and germanium, fueling trade tensions with Western allies.

Gallium and germanium are silvery-white metals that can be found in a variety of electronics, such as semiconductors, smartphones, pressure sensors, transistors and fiber optics, as well as solar panels, camera lenses and space systems.

The Chinese Ministry of Commerce cited “national security interests”. said on monday Companies that intend to sell products containing the two target ingredients must first obtain an export license.

In practice, this means that if the central government refuses to issue a licence, the company will be outright banned from exporting.

The government will treat the goods as “dual-use” items, a term that describes items that can be used for commercial and military purposes and therefore require an additional layer of surveillance.

The ministry said the rules will come into effect from August 1.

The unexpected news from Beijing has put Brussels on high alert, as it comes amid a renewed effort to break away from its commercial dependence on the European Union.

The ambition has been translated into the Critical Raw Materials Act, a regulation introduced in March that establishes legally binding targets on domestic extraction, processing and recycling of “strategic” rare-earth metals.

Gallium and germanium both fall into the “strategic” category because they are considered essential to completing the green and digital transition of the bloc.

But achieving greater independence is no easy task: China is estimated to control 80% of production Gallium and 60% of that germaniumthereby giving the country a comfortable dominant position on the world’s supply chains.

Gallium and germanium “are important, they are essential to our industry, especially for their use in strategic sectors, and (in the sense) that we are dependent on a single supplier,” a European Commission spokesperson said on Tuesday afternoon. said in response. Beijing’s decision, noting that an internal analysis was underway.

The spokesperson openly cast doubt on China invoking “national security” reasons to justify the surprise move and urged the country to base its trade policy on “clear security considerations” in line with the World Trade Organization (WTO). Did.

“The commission is concerned that these export restrictions are unrelated to the need to protect global peace and stability and implementation of China’s non-proliferation obligations arising from international treaties,” the spokesperson said.

The spokesman declined to speculate on possible retaliatory steps.

New controversy opens a new chapter fast paced technology race Which has pitted the United States and to some extent Europe against China.

Washington wants its allies to heavily curtail, or outright ban, advanced electronic components bound for the Chinese market to prevent Beijing from seeking global technological supremacy and challenging the Western-led international order.

the netherlands became earlier this year The first country in the European Union to take decisive action against China, when it imposed severe restrictions on the export of semiconductor machinery, which Dutch company ASML makes in particular.

limitations that partly inspired the European Commission to design its first economic security strategyExpanded further last week.

Meanwhile, increasing media reports indicate that the US is considering new restrictions on China-based exports of cloud-computing services and AI semiconductors.

The coincidence of events suggests Beijing is prepared to leverage its market dominance over rare metals to retaliate against “political” trade controls imposed by Western allies.

Chinese Foreign Ministry spokesman Mao Ning denied any intention of tit for tat and defended the restrictions on gallium and germanium.

“China has always been committed to keeping global industrial and supply chains safe and stable, and has always implemented fair, reasonable and non-discriminatory export control measures,” Ning said Tuesday morning.

“The Chinese government’s export control of relevant goods in accordance with law is a general international practice, and does not target any specific country.”

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