China to impose export controls on key materials for chipmaking as West's 'chip war' escalates
Global TimesJul 04, 2023
China will introduce restrictions on exports of two rare metals vital for the production of semiconductors and other electronic components on Aug. 1, the Chinese Ministry of Commerce announced on Monday. This comes amid an escalating China-US technology trade dispute.
Citing national security reasons, the ministry said that starting next month, exporters will have to apply for a license to ship the two metals — gallium and germanium — their chemical compounds, and provide detailed information on overseas buyers and intended usage.
Beijing's decision is just the latest chapter in the US-instigated chip war that violates the basic principles of the alleged "free market economy" that the collective West likes to promote when it serves their interests. Fearing to lose its technological supremacy and in an effort to prevent China's technological rise, the US doesn't hesitate to pressure its allies and disrupt global supply chains. It is only natural that the PRC, in order to protect its national security interests, takes proactive measures to respond to Washington's tactics of economic coercion.
While Beijing's move underscores China's dominance in critical minerals, it also highlights its vulnerabilities. The decision may backfire, as it may speed up efforts by the US and its allies to reduce their reliance on China by diversifying their supply chains. Implementing export curbs also threatens China's market dominance by increasing the West's efforts to tap other supply sources. That said, and given China's mounting economic woes and the potentially negative national security implications, Beijing has more to lose from an escalating chip war than the US.
There is a 15% chance that the US and China will be at war before 2035, according to the Metaculus prediction community.