The World Briefly

July 06, 2023

New Fronts

China

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China will restrict the export of two important metals used to manufacture semiconductors, a move that could further escalate the global trade war over access to microchips, CNBC reported.

The Chinese commerce ministry announced that the new regulations will require exporters to seek a license to ship compounds of gallium and germanium starting next month. These licenses must identify importers and end users, as well as explain how these metals will be used.

Officials said the restrictions were imposed on grounds of national security, but are not targeted at any specific country.

The two metals are integral for creating electronic circuits, semiconductors, and fiber optics for the transfer of data and information. China produces 60 percent of the world’s germanium and 80 percent of the world’s gallium, according to the Critical Raw Minerals Alliance.

The restrictions are part of an ongoing global battle for technological supremacy: In October, the United States launched regulations to cut off exports of key chips and semiconductors tools to China.

It has also lobbied chip-making nations and allies to introduce their own restrictions.

Last week, the Netherlands also imposed its own export curbs on advanced semiconductor equipment.

Analysts explained that Beijing’s decision will have a limited impact on the global supply because of its targeted scope.

However, they added that the move serves as a reminder to the US and its allies “that China has retaliatory options and to thereby deter them from imposing further restrictions on Chinese access to high-end chips and tools.”

Semiconductors are vital tech components used in smartphones, cars, even refrigerators, and have strategic importance in military applications and advancing AI.

This story originally appeared in the July 06, 2023 newsletter, Humbled but Unbowed.