July 4 (UPI) — The Chinese government says it will start limiting exports of two rare raw metals used in computer chip production in retaliation for earlier U.S. semiconductor export restrictions against Beijing.
China announced late Monday that the new export controls on gallium and germanium will be imposed starting on Aug. 1, calling it a matter of national security.
China controls the lion’s share of both rare earth metals on the global market and analysts expect the move to hit semiconductor producers hard.
Mao Ning, China’s foreign ministry spokeswoman, stressed that Tuesday’s move is “not targeted at any particular country,” but added the rules were “justified and non-discriminatory” export controls aimed at protecting the security and stability of international supply chains.”
China’s new restrictions will require exporters to get a license to ship some gallium and germanium compounds to other countries. The exporters will need to identify importers and end users and say how these metals will be used.
The new rules are the latest salvo in the ongoing war to see who will lead the global technology marketplace. China has a large stake in that battle as home to much of the raw materials needed.
Washington last year moved to limit U.S. exports of semiconductor technology to China, calling the restrictions part of an effort to “protect U.S. national security and foreign policy interests” aimed at blunting China’s “ability to both purchase and manufacture certain high-end chips used in military applications.”
“It is a shot across the bow intended to remind countries including the United States, Japan, and the Netherlands that China has retaliatory options and to thereby deter them from imposing further restrictions on Chinese access to high-end chips and tools,” Eurasia Group analysts Anna Ashton, Xiaomeng Lu and Scott Young wrote in a research note obtained by CNBC.