China has just instituted massive export restrictions on two metals – gallium and germanium – necessary for the manufacturing of crucial technologies.
According to a notice by China's Ministry of Commerce and General Administration of Customs, the export controls will come into effect on August 1. These restrictions also include several of their compounds.
The communist nation said these controls are necessary to safeguard its "security and national interests." Chinese exporters may apply for export licenses if they wish to continue exporting their metals out of China. (Related: Chinese Defense Minister warns: Severe China-US conflict would be an UNBEARABLE DISASTER for the world.)
The announcement was made on Monday, July 3, amid an escalating tech war with the United States and potentially causing more disruption to global supply chains, especially those involved with the manufacturing of tech that relies on gallium and germanium, like semiconductors, electric vehicles, communications equipment and solar panels.
China's export control announcement comes just days after the Netherlands, at the urging of the U.S., restricted the sale of high-end semiconductor manufacturing equipment abroad in a move designed to target the communist nation.
This also comes nearly a year after the U.S. began limiting Chinese access to the equipment necessary for the manufacturing of semiconductor chips.
China is the world's largest producer of gallium and germanium, with mines in China accounting for 95 percent of global gallium output and 67 percent of germanium output. Chinese curbs are expected to add urgency to American and Western efforts to develop alternative sources for gallium, germanium and other crucial metals.
Chinese export restrictions could have catastrophic impact on global supply chains
The administration of President Joe Biden said in a statement on Thursday, July 6, that it "firmly opposes" China's new export restrictions.
"These actions underscore the need to diversify supply chains," said a spokesperson for the Department of Commerce, adding that Washington would "engage with our allies and partners to address this and to build resilience in critical supply chains."
Secretary of the Treasury Janet Yellen followed this statement up with her own, telling American businesses in China and those with agreements with Chinese corporations that the Biden administration is still evaluating Beijing's decision, but that the move was a reminder of the importance of diversifying supply chains.
The Chinese Commerce Ministry claimed several days after its initial announcement that Beijing had informed the U.S. and the European Union in advance about its decision through "export control dialogue channels."
America's allies in Europe and the rest of the Western world are also in the process of evaluating the potential impact of Chinese export restrictions.
The European Commission, the leading executive body of the E.U., called on Chinese authorities to "adopt an approach where restrictions and controls are based on clear security considerations in line with World Trade Organization rules."
A spokesperson for the government of Japan said: "The intention of the matter and the operational policy of China will be confirmed by us, and the WTO rules will need to be complied with." Japanese manufacturing companies import large quantities of Chinese gallium and germanium.
"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," noted analysts at New York-based political risk consultancy firm Eurasia Group.
Learn more about China's latest activities at CommunistChina.news.
Watch this episode of the "Health Ranger Report" as Mike Adams, the Health Ranger, interviews "The Liberty Man" John Moore about the latter's intelligence pointing to the U.S. engaging in an imminent conflict with Russia and China.
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