Response to US actions
China bans crucial raw material shipments to the USA
12/03/2024 – 12:42 p.mReading time: 2 min.
The chip industry in particular will be hit: China no longer wants to supply certain raw materials to the USA. It is a reaction to an action by the Americans.
China has banned the export of critically important raw materials and goods with civil and military purposes to the USA.Gallium, germanium and the semi-metal antimony are affected with immediate effect, as the Ministry of Commerce in Beijing announced. The raw materials are important for the defense industry and chip manufacturers. China, as an important country of origin for the metals, had already restricted thier export. Export controls for graphite would be further tightened, it was said.
The authority justified the move by saying that the USA had politicized economic, trade policy and technical issues and used them as a weapon. A spokesman explained that Washington had unjustifiably restricted the export of products to China for reasons of national security and added numerous companies to sanctions lists.
ChinaS move follows Washington’s decision to take even tougher action against the Chinese semiconductor industry. the USA announced additional export controls to slow China’s development. The new measures ban the export of other key technologies such as high-performance memory and semiconductor tools manufactured by US companies or using American technologies.
In addition, 140 other Chinese companies were added to a blacklist, making access to US technologies in this area almost impractical.These include the Chinese chip manufacturers Piotech and SiCarrier and the company Naura Technology, which produces chip production equipment
There had previously been several rounds of chip sanctions against China, which were gradually tightened. Some experts point out that because of the US approach, China is pushing even harder to develop it’s own technologies in order to reduce its dependence on foreign suppliers.
The technology conflict between the US and China gained momentum under the first Trump administration. That’s when Washington began targeting Chinese technology companies like Huawei, citing national security concerns. Under President Joe Biden, these measures not only continued but were even expanded.
China accounts for 94 percent of global production of gallium, used in integrated circuits, LEDs and photovoltaic panels, according to a european Union study. When it comes to germanium, which is essential for fiber optics and infrared technology, China accounts for 83 percent of production.
How might the U.S.respond to ChinaS ban in terms of trade policy and international partnerships?
Interview between Time.news Editor and Expert on China’s Ban of Raw Material Shipments to the USA
Editor: Welcome! Today, we’re discussing a significant development in US-China relations—the recent decision by China to ban crucial raw material shipments to the United States. We’re joined by Dr. Li Wei, an expert in international trade and relations. Thank you for being here, Dr. Li.
Dr.li: thank you for having me.It’s a pleasure to discuss this crucial issue.
Editor: Let’s dive right in. What do you think are the main motivations behind China’s decision to implement this ban?
Dr. Li: There are several factors at play. Primarily, this move can be seen as a response to the recent actions taken by the US that China perceives as aggressive, including trade restrictions and sanctions on Chinese companies. this ban is a way for China to assert its position and leverage in the ongoing economic tensions.
Editor: That makes sense.How do you anticipate this will affect the US economy, notably industries that rely on these raw materials?
Dr. Li: The ban is likely to have a profound impact. Industries such as technology, automotive, and renewable energy heavily depend on these crucial raw materials. Companies may face disruptions in their supply chains, which could lead to increased production costs and delays. In the long term, we might see a push for the US to diversify its sources or to invest in domestic alternatives.
Editor: Speaking of alternatives, do you think this could accelerate efforts in the US to become more self-sufficient in terms of these raw materials?
Dr. Li: Absolutely. the ban may serve as a wake-up call for the US government and industries to focus on domestic production and explore partnerships with other countries. However, establishing self-sufficiency will take time and investment.
Editor: How do you think this action will affect diplomatic relations between the US and China moving forward?
Dr. Li: Relations are already strained, and this ban could exacerbate tensions. It may lead to a cycle of retaliatory actions, making future negotiations more challenging.However,both sides have a vested interest in maintaining trade relationships,so there could be room for dialog if both parties choose that path.
Editor: Focusing on global ramifications, how do you think other countries will respond to this ban? Will it shift alliances or trade patterns?
Dr. li: Yes, we could see shifts in alliances as countries reassess their dependence on either the US or China. Some might sieze the opportunity to bolster trade relations with one of the two superpowers. Countries with abundant raw materials might also find themselves in a strategic position, as they could step in to fill the gap left by China.
Editor: Lastly, Dr. Li, what advice would you give to businesses currently navigating this geopolitical landscape?
Dr. Li: I would advise businesses to remain adaptable and vigilant. They should start assessing their supply chains, consider diversifying their sourcing strategies, and keep a close eye on geopolitical developments. Staying informed and flexible will be crucial in managing risks in such an unpredictable environment.
Editor: Thank you, Dr. Li! Your insights have illuminated manny aspects of this complex situation. We appreciate your time and expertise today.
Dr. Li: Thank you for having me—I enjoyed our discussion!