China’s export controls on metals used in making semiconductors are “just a start”, an influential trade policy adviser said on Wednesday, as it ramps up a tech fight with the U.S. days before U.S. treasury secretary Janet Yellen visits Beijing.
Shares in some Chinese metals companies rallied for a second session, with investors betting that higher prices on gallium and germanium. This Beijing’s export restrictions target, could boost revenues
Germanium used in high-speed computer chips, plastics, and in military applications such as night-vision devices as well as satellite imagery sensors. Gallium used in building radars and radio communication devices, satellites and LEDs.
China’s abrupt announcement of controls from Aug. 1 on exports of some gallium and germanium products. It also used in electric vehicles (EVs) and fibre optic cables, has sent companies scrambling to secure supplies and bumped up prices.
Announced on the eve of U.S. Independence Day and just before Yellen’s planned visit to Beijing from Thursday. Analysts said it clearly timed to send a message to the Biden administration. This has been targeting China’s chip sector and pushing allies such as Japan and Netherlands to follow suit.
China’s move has also raised concerns on whether restrictions on rare earth exports could follow, they said. Thus, pointing to how it curbed shipments 12 years ago in a dispute with Japan. China is the world’s biggest producer of rare earths, a group of metals used in EVs and military equipment.
Analysts have described Monday’s move as China’s second, and so far the biggest, countermeasure in the long-running US-China tech fight. As coming after it banned some key domestic industries from purchasing from U.S. memory chipmaker Micron in May