China Hits Back At Biden With Curbs On Exports Of High-Tech Metals Before Yellen Visit

Beijing has hit back at the Biden administration’s recently imposed export curbs on select materials which are crucial for advanced semiconductors and chip-making machinery, and it comes just before Treasury Secretary Janet Yellen is set to arrive in Beijing Thursday, the first visit of her tenure. 

China has just put in place its own export curbs on two rare metals commonly used in computer chips and solar cells. This expands the already complicated fight between the two economic powerhouses over high tech trade.

But Beijing has on the whole been slow to retaliate, likely on fears of expanding the tit-for-tat restrictions, given especially that America’s semiconductor industry is significantly more advanced. The two metals newly impacted by the measure are gallium and germanium.

According to details in The Associated Press: 

The controls on gallium and germanium are intended to “safeguard national security,” the Commerce Ministry said late Monday. It said exports will require official permission once the rules take effect Aug. 1 but did not say what restrictions might be applied.

And The New York Times notes just ahead of Yellen’s arrival in Beijing, “The Biden administration is mulling further controls on advanced chips and on American investment into cutting-edge Chinese technology.”

Treasury said in the statement announcing her trip, “While in Beijing, Secretary Yellen will discuss with [People’s Republic of China] officials the importance for our countries — as the world’s two largest economies — to responsibly manage our relationship, communicate directly about areas of concern, and work together to address global challenges,”

However, a Treasury official sought to temper expectations, saying no breakthrough is expected, following Secretary of State Blinken’s mid-June trip where he met with President Xi Jinping. Any positive opening created by Blinken’s trip was damaged when within days of his return to Washington, President Biden during a campaign event in California called Xi a “dictator”. 

Last month, Yellen had attempted to soften the remarks before a press conference, saying of Biden’s remarks which had outraged Bejing officials, “With respect to the comments, I think President Biden and I both believe it’s critical to maintain communication …to clear up misperceptions, miscalculations. We need to work together where possible.” 

In preparation for the trip, Yellen met with Xie Feng, China’s ambassador to the United States, in Washington on Monday. The Treasury readout cited “frank and productive discussion” over global and bilateral issues.

Much more impactful than China potentially restricting exports of gallium and germanium. https://t.co/xj0Nlh0C7L

— Martijn Rasser (@MartijnRasser) July 4, 2023

“Xie expressed China’s concerns on economic and trade issues and asked the United States to take action to resolve them, according state media broadcaster CCTV,” Reuters detailed. “He also expressed hope that the United States and China will eliminate interference while strengthening dialogue, CCTV said.”

Also top of the list of topics for dialogue when Yellen is expected in China July 6-9 will be Taiwan, at a moment the Biden administration has continued approving arms deals for the self-ruled island.