China hits back in the chip war, imposing export curbs on crucial raw materials

In response to chip export restrictions from the US and Europe, China has retaliated by imposing export controls on two essential semiconductor manufacturing elements, gallium and germanium, adding another dimension to the ongoing global battle over chipmaking technology control.

• China has announced export controls on two rare elements, gallium and germanium, which are essential for semiconductor manufacturing. This move is in response to the US and Europe restricting chip exports to China.
• Starting August 1, exporters of these raw materials will require special permission from the state to ship them out of the country, according to China's Ministry of Commerce.
• Both gallium and germanium are used in several products, including computer chips and solar panels, and are listed as critical raw materials by the European Union. China is the world's largest gallium producer and a significant producer and exporter of germanium.
• The Dutch government recently imposed new restrictions on exports of some semiconductor equipment, provoking a harsh reaction from Beijing. Consequently, ASML, Europe's largest tech firm, will need to apply for export licenses for products used to manufacture microchips.
• Japan, the US, and Italy have also taken measures to restrict Chinese companies' access to chips and chipmaking equipment. This has been seen as an attempt to limit the Chinese government's access to sensitive chip technology.
• The new policy was interpreted as retaliation by a state-owned newspaper, China Daily, which suggested that critics should question why the US and the Netherlands have taken similar actions against China.
• China's announcement comes just before US Treasury Secretary Janet Yellen's visit to Beijing from July 6 to July 9, where she will meet with senior Communist Party officials.