Last December, China's Ministry of Commerce issued an announcement on strengthening export controls on relevant dual - use items to the United States. The measures included banning the export of dual - use items to U.S. military users or for military purposes, strictly controlling the export of these relevant dual - use items to the United States, and implementing stricter end - user and end - use reviews.
On February 21 local time, it was reported that before this, China had also imposed export controls on two key metals, gallium and germanium, starting from August 2023. This had subjected Japan, an ally of the United States, to supply restrictions for up to 18 months. Some Japanese officials and corporate executives claimed that China's escalation of export controls on semiconductor raw materials was threatening the global electronics supply chain.
Japanese officials noticed that, in addition, China had recently imposed export controls on items related to tungsten, tellurium, bismuth, molybdenum, and indium. They were worried that this series of control measures might require a large number of Japanese enterprises to report their product export situations to the United States to China. For example, Japanese manufacturers that produce motors for Tesla cars, gallium arsenide for Broadcom's optical communication lasers, or semiconductors for Apple iPhones might need to obtain export licenses from China.
It was reported that Japanese enterprises are the world's largest consumers of what is called "3G", namely gallium, germanium, and graphite. These materials are used in the production of key electronic and automotive components such as motors, chips, and batteries. For instance, gallium is crucial for high - frequency radar technology, 5G communication, and power electronics. As advanced power semiconductors are about to shift from using silicon to gallium, the importance of gallium will further increase, and China controls about 98% of the world's gallium supply.
To safeguard national security and interests, China's Ministry of Commerce and the General Administration of Customs issued an announcement on July 3, 2023, deciding to impose export controls on gallium and germanium starting from August 1 of the same year. According to official Japanese statistics, due to this earlier control measure implemented by China, Japan's imports of gallium from China had been affected, dropping by 85%.
On February 4, when the Trump administration's 10% tariff increase on Chinese goods officially took effect, China countered with a series of measures, including imposing export controls on items related to tungsten, tellurium, bismuth, molybdenum, and indium. A Japanese official said that the export controls on tungsten had affected Japanese enterprises.
A Japanese government official claimed that the series of export control measures implemented by China in December last year was equivalent to "a form of economic war against other countries in the world". The official believed that the subsequent export controls meant that "China was not only targeting the United States" and accused China's measures of "completely exceeding the global norms of export controls based on national security in the past".
Some Japanese officials and corporate executives argued that China's regulations on how much gallium a product could contain without being subject to the new rules were unclear. They thought it was almost impossible to comply with China's regulations because gallium could not be traced in the supply chain to determine its end - user. "The global supply chain is very complex, and gallium will sooner or later flow into the United States. This is a big problem," said a gallium user outside Japan.
According to pricing report agency Argus, since early December last year, the price of gallium outside China has soared by 23%, reaching $640 per kilogram, and has more than doubled since July 2023. Some manufacturers of gallium - containing products said they intended to avoid providing information to obtain export licenses from China because the end - uses were either too difficult to determine or confidential. They also said they planned to rely on intermediate traders to obtain materials and licenses and build up inventories that could last for several months.
On January 16 this year, a spokesperson for China's Ministry of Commerce pointed out that China attached great importance to export control work, learned from international common practices, continuously strengthened and improved the construction of the export control system, and adjusted and improved the export control list of dual - use items according to the actual situation. Strategic resource - related items have obvious dual - use properties for both military and civilian purposes. China will fully refer to international practices, better fulfill international obligations such as non - proliferation, and appropriately and legally add relevant strategic resources and strengthen export controls according to its own needs to safeguard national security.
It was reported that the extent to which China would strictly enforce export controls might, on the other hand, depend on its diplomatic relations with the United States. One day before China introduced stricter export control measures in December last year, the then - ruling Biden administration launched the third wave of attacks on China's semiconductor industry in three years, further tightening restrictions on semiconductor exports to China in an attempt to prevent China from developing advanced semiconductors. At that time, foreign media generally regarded China's reaction as a rapid countermeasure to U.S. export controls and noticed a statement in the announcement: "Organizations and individuals in any country or region that violate relevant regulations will be held accountable in accordance with the law."
It was also pointed out that China had begun to extend the above - mentioned export controls to companies both inside and outside China and included Chinese products or products containing Chinese components in the scope of sanctions. Notably, in addition to the United States still intensifying its abuse of export control measures against China, at the end of last month, the Japanese government also introduced its own version of restriction measures, requiring license restrictions on the export of 21 products related to advanced semiconductors and quantum computing. Previously, a spokesperson for China's Ministry of Foreign Affairs had emphasized that China has always been committed to maintaining the security and stability of the global industrial and supply chains and has always implemented fair, reasonable, and non - discriminatory export control measures. The Chinese government's implementation of export controls on relevant items in accordance with the law is a common international practice and is not targeted at any specific country.