China, fed up with US sanctions, is hitting back with export controls – and more could come
- China’s export restrictions on rare metals and the Micron ban reflect its hardening attitude after decades of sanctions and embargoes from the West
- As China learns from the West, its export controls are likely to turn a one-way track into a two-way street
I remember encountering export control in action for the first time when I visited a precision instrument company in Northern Ireland in 2011. The CEO told me there was a huge unmet demand for its products in China. But for fear of being fined or even jailed for violating the British government’s export control measures, his company had to abandon the business opportunity.
In the four years that followed, as the top economic and commercial diplomat at China’s embassy in London, I heard time and again similar complaints.
Britain is not alone in implementing export controls, though. Many governments use them to fulfil their obligations to multilateral organisations and ensure the supply of raw materials for domestic industries.
China has been a major target of the West’s export control measures since “Red China” was born in 1949. During the Cold War, more products were restricted for export to China than to the Soviet Union. Washington’s control list for China in 2007 included aeroplanes and their engines, optical fibres, advanced navigations systems, lasers and depleted uranium. To this list, Washington has in recent years added emerging and basic technologies, such as in 4G semiconductor materials, advanced electronic computer-aided design (ECAD) software and network safety.
Gallium and germanium are typical dual-purpose goods. Used in 5G communications, electric vehicles and renewable energy industries, the niche metals also go into the manufacturing of military systems such as advanced radars on F-35 fighter jets.
Even so, Beijing’s new licensing regime is about controlling exports, not an outright ban. China does not appear to intend to cut off supplies of the two niche metals; according to its trade ministry, export applications that meet requirements would be approved.
China’s latest move signifies its hardening attitude to sanctions from the West. As China learns from the West, its export controls are likely to turn a one-way track into a two-way street.
China has repeatedly warned of the consequences of Washington’s relentless crackdown on its hi-tech sectors, and made clear its resolve to safeguard its interests. Although this has been largely all bark and no bite, the country now looks more ready to walk the walk, and avail itself of trade tools to defend its interests.
For decades, the US has been able to get as much gallium and germanium from China as it desired. But this is changing. In all probability, Washington’s vulnerability and insecurity in these two critical minerals would increase rather than reduce, at least in the short and medium terms. Washington’s China containment strategy is coming home to roost.
Truth is, in our interconnected world, all countries live in glass houses. We ought to be extremely cautious about throwing stones – doing so not only risks damaging the houses of others, but also our own.
Zhou Xiaoming is a senior fellow at the Centre for China and Globalisation in Beijing and a former deputy representative of China’s Permanent Mission to the United Nations Office in Geneva