Posted on 07/07/2023 4:50:52 AM PDT by EBH
Gallium and germanium are silvery-white metals that can be found in a wide variety of electronics, such as semiconductors, smartphones, pressure sensors, transistors and fibre optics, as well as solar panels, camera lenses and space systems.
Invoking "national security interests," the Chinese Ministry of Commerce said on Monday that companies that intend to sell products containing the two targeted materials would need to first obtain an export licence.
In practice, this means that if the central government refuses to issue the licence, the company will be outright banned from exporting.
The government will treat the merchandise as a "dual-use" item, a term that describes goods that can be employed for commercial and military purposes and therefore warrant an extra layer of oversight.
The rules will apply as of 1 August, the ministry said.
The unexpected news from Beijing put Brussels on high alert, as it comes in the midst of a renewed push to wean the European Union off its commercial dependencies.
The ambition has been translated into the Critical Raw Material Act, a regulation presented in March that establishes legally-binding targets on the domestic extraction, processing and recycling of "strategic" rare-earth metals.
Both gallium and germanium fall under the category of "strategic" because they are considered to be essential to fulfill the bloc's green and digital transition.
But achieving greater independence is no easy task: China is estimated to control 80% of the production of gallium and 60% of that of germanium, giving the country a comfortably dominant position over the world's supply chains.
Gallium and germanium "are critical, they are essential for our industry, especially for their use in strategic sectors, and also (in the sense) that we are dependent on a single supplier," a European Commission spokesperson said on Tuesday afternoon in reaction to Beijing's decision, noting that an internal analysis was underway.
The spokesperson openly cast doubt over China's invocation of "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).
"The Commission is concerned that these export restrictions are unrelated to the need to protect the global peace and also the stability and the implementation of China's non-proliferation obligations arising from international treaties," the spokesperson said.
The spokesperson refused to speculate on possible counter-measures.
The new dispute opens a new chapter in the increasingly fierce technology race that has pitted the United States, and to a lesser extent Europe, against China.
Washington wants its allies to heavily curb, or downright prohibit, advanced electronic components bound to the Chinese market in order to prevent Beijing from securing global tech supremacy and challenging the Western-led international order.
The Netherlands became earlier this year the first EU country to move decisively against China when it imposed severe restrictions on the exports of the semiconductor machinery that Dutch company ASML manufactures in exclusivity.
The limitations, which partially inspired the European Commission to design its first economic security strategy, were further expanded last week.
Meanwhile, growing media reports indicate the US is considering fresh curbs on China-bound exports of cloud-computing services and AI semiconductors.
The coincidence of events suggests that Beijing is willing to leverage its market dominance over rare metals to retaliate against what it sees as the "politicised" trade controls slapped by Western allies.
Mao Ning, spokesperson for the Chinese Ministry of Foreign Affairs, denied any tit-for-tat intention and defended the restrictions on gallium and germanium.
"China is always committed to keeping the global industrial and supply chains secure and stable, and has always implemented fair, reasonable and non-discriminatory export control measures," Ning said on Tuesday morning.
"The Chinese government's export control on relevant items in accordance with law is a common international practice, and it does not target any specific country."
But “sanctions don’t work” the neocons say!
Tell them Ron Brown already payed forward on export licenses. We should be good for another 100 years.
The solution is to do what Trump did.....ie restart domestic mining and production of “rare earths”. The reality is these minerals aren’t all that rare. They’re just environmentally messy to extract.
Gaia worship is what caused the US and the rest of the West to abandon this industry - which the US dominated in the 1990s - to China. Its time to remove this sacrifice to Gaia.
“Gallium and germanium are found in a wide variety of electronics, such as semiconductors, smartphones, pressure sensors, transistors and fibre optics, as well as solar panels, camera lenses and space systems.”
Why are you posting this? So we no longer have the above? What’s the big deal? All that matters is UKRAINE, UKRAINE, UKRAINE!!!! Off to War!!!!
(Neocon response)
Typical Hyper Bull Shit from Bob L
“China is estimated to control 80% of the production of gallium and 60% of that of germanium”
Production, not supply. Some other countries could take up the slack.
“Typical Hyper Bull Shit from Bob L”
Haven’t heard a peep from our government regarding this move, which will CRUSH US. There are things they can do...tell us what they’re doing. This story is already a week old.
All they seem to talk about is UKRAINE, UKRAINE, UKRAINE!!!!!
This is how China will win over Taiwan. They will choke them on the natural resources and force them to stop doing business directly with the west. They won’t fire a shot.
Gallium and germanium are not rare. They are byproducts of zinc and aluminum processing. The reason they aren’t processed here is because of environmental restrictions. It will take a bit of time, but all of America’s needs are easily met in the lower 48. It just takes the approvals to do the processing.
If the US really wanted to hit back, well, some 90% of the silica used by the world’s IC industry comes from the US. So far, nobody has said, “Hey, we’ll hit back.” Probably, the people who are managing the Chinese have no idea how any of this works.
China is cornering the markets in Africa, Russia, Central Asia and parts of South America.
China is trying to win “the war” economically, not militarily. The tactics they use in Africa are right out of The Mafaia’s playbook.
But the snowflakes here in America cannot have their green utopia look messy. Only other countries can be messy. It’s out of sight and out of mind.
Isn’t it ironic that they insist on an open border that allows all the messy people of the world into America? Isn’t it ironic that their policies have turned every major city into a messy dump. Maybe that’s out of sight and out of mind too?
That’s what happens when you rely on “Global Trade”.
China already has Taiwan, for all intents and purposes. They have moles everywhere in their industries and government.
I know. I think most of the population in Taiwan doesn’t care one way or the other. There is a lot of travel from there to the mainland. I understand the strategic importance of the island. I am not confident that the population is as concerned as the government.
We’ll see.
China has its eyes on Eastern Russia more than Taiwan.
China wants us to think Taiwan is a “friend”, any secrets we give them go straight to Beijing.
Good for China.
Nations should defend their natural resources - starting with our nation, of course.
Imagine if we had the Japs manufacturing all our stuff in the 1920s, when technically we were still “allies”.
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