China restricts exports of critical minerals to US in response to chip restrictions

By Emre Aytekin

BEIJING (AA) – China has announced export restrictions on critical minerals to the United States, countering recent US measures targeting its chip industry.

The Ministry of Commerce stated that the export of materials with dual military and civilian uses, including gallium, germanium, antimony, and super-hard materials, to US defense manufacturers is now prohibited.

Exports of graphite, which is essential for batteries and aerospace applications, will also face tight controls.

China justified the measures as compliant with its export control laws, asserting that they aim to safeguard national security and uphold international non-proliferation obligations.

As the world’s largest producer of rare metals—accounting for 70% of global output and processing 85%—China’s move could significantly disrupt supply chains.

A US Geological Survey (USGS) report warned that restricting gallium and germanium exports could cost the US economy $3.4 billion.

The Chinese government had already announced in August 2023 that gallium and germanium exports would be restricted, followed by graphite export controls in December.

-Response to chip restrictions

China’s action is a direct response to US restrictions targeting its chip-making industry.

The US Commerce Department recently expanded its export controls, prohibiting the sale of 24 types of chip-manufacturing equipment and three categories of software essential for semiconductor production.

US Commerce Secretary Gina Raimondo stated that the measures aim to curb China’s military advancements in cutting-edge technologies.

Beijing has condemned the US actions, accusing Washington of using export controls to suppress Chinese industries.

The Joe Biden administration has prioritized preventing the transfer of critical technologies to China, notably through the CHIPS and Science Act and broader investment restrictions.

Signed into law in August 2022, the CHIPS and Science Act has limited Chinese manufacturers’ access to advanced semiconductor technologies.

In August 2023, Biden issued an executive order restricting American companies from investing in critical technology sectors in China, including artificial intelligence, quantum computing, and microelectronics.