In a move aimed at safeguarding national security and interests, the Chinese government has announced stricter controls on the exports of gallium and germanium, two essential materials used in computer chip production. Beginning next month, special licenses will be required for the export of these metals from China, which currently holds the position of the world’s largest producer of gallium and germanium. The timing of this announcement is noteworthy, as it precedes an important visit to Beijing by US Treasury Secretary Janet Yellen.
This development comes as a response to Washington’s efforts to limit China’s access to advanced microprocessors, reflecting the ongoing disputes between the two largest global economies over semiconductors. The United States has taken measures to curb China’s acquisition of technology that could potentially be utilized for military purposes, particularly focusing on chips used in supercomputing and artificial intelligence.
The US policy includes a requirement for licenses for companies exporting chips to China, irrespective of their manufacturing location, if US tools or software are involved. Notably, other countries such as the Netherlands and Japan have also joined this movement. The Netherlands recently revealed its intention to restrict exports of specific semiconductor manufacturing equipment, including cutting-edge microchip technology. These restrictions are expected to impact Dutch chip equipment manufacturer ASML, a vital player in the global microchip supply chain. Japan, in a similar vein, has announced plans to limit certain computer-chip manufacturing exports by targeting 23 types of semiconductor manufacturing equipment.
China has frequently criticized the US for acting as a “tech hegemony” in response to the export controls imposed by Washington. As a countermeasure, Beijing has imposed restrictions on US companies associated with the American military, such as aerospace firm Lockheed Martin.
The upcoming visit of US Treasury Secretary Janet Yellen to China holds significant importance as she aims to promote maintaining economic ties between the two nations. Yellen emphasized the mutual benefits derived from open trade and investment, cautioning against any attempts to sever economic links between Washington and Beijing.
This visit follows a recent meeting between US Secretary of State Antony Blinken and Chinese President Xi Jinping in June, which marked the resumption of high-level communications between the rival superpowers.
The tighter controls imposed by China on the export of gallium and germanium could have significant implications for the global supply chain of computer chips. As China plays a pivotal role as the leading producer of these key materials, the impact of these measures may ripple through industries reliant on semiconductors, including technology, communications, and defense. The ongoing disputes between the US and China over access to advanced technology underscore the increasing tensions and complexities in the relationship between these economic powerhouses.