Xi to Biden:
Do you really want to hamper our chip producing companies?
Really?
China curbs critical metal exports in retaliation for Western restrictions on chip industry
China on Monday ordered export restrictions on two technology-critical elements in retaliation for new Western sanctions on its semiconductor industry.
The restrictions, which take effect on August 1, will apply to gallium and germanium metals and several of their compounds, which are key materials for making semiconductors and other electronics.
The Ministry of Commerce said in a statement that the export controls on gallium- and germanium-related items were necessary “to safeguard national security and interests”.
Exporters in China will need to apply for permission from the ministry, with information about the end users and how the materials will be used.
Gallium and germanium are used in lots of electronic components. AESA (active electronically scanned array) radars used on modern warships and fighter airplanes can not be made without those metals. China produces some 95% of those available on the global market.
It will take one or two years until the currently available stocks outside of China are diminished. But it takes much longer to open up new mining and processing facilities for replacement of the Chinese production. The processes used therein are quite dirty. A not-in-my-backyard attitude will make any setup of new facilities difficult to pursue.
The situation will soon become similar to the titanium market where Russia is the biggest global supplier but has restricted access for certain customers.
This is just one of many cards China (and Russia) can play in their anti-sanction games.
The U.S. is reaching the limits of its sanction power.
Reprinted with permission from Moon of Alabama.
The post Punishing Sanctions appeared first on LewRockwell.
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