Can't they sit still?, Important raw material items for chips under China's export control | China | Export

Starting from August 1st, China will implement export controls on gallium and germanium related items. As is well known, gallium and germanium related items have obvious dual-use properties, and implementing export controls is also an international practice. However, some people cannot sit still with the completely legitimate and reasonable export controls that China is about to implement. In the past two days, the United States, the Netherlands, Japan, South Korea, the European Union and other parties have responded one after another, with different language and tone. Special commentator Liu Yang from Changjiang News will provide you with in-depth interpretation.

Changjiang News: After China announced that it will implement export controls on gallium and germanium related items, Western countries such as the United States and the Netherlands, as well as the European Union, have responded more fiercely, while Japan and South Korea have shown relatively restrained responses. Why is there such a contrast?

Liu Yang: Firstly, the main users of gallium and germanium are developed countries such as the United States, Britain, France, Germany, Netherlands, Japan, and South Korea. We know that gallium and germanium related items are on the EU's critical raw material list and are considered "crucial to the European economy.". The most tense point for the US and the West is that if the supply of key items such as gallium and germanium from China were to be interrupted, and if they were to decouple from China as they wished, they would probably have to spend decades and billions of dollars to establish their own production lines, let alone find alternative supply channels for raw materials at a higher cost. But at the same time, it's also interesting to see the reactions from Japan and South Korea. In theory, these two little brothers who are tightly holding onto the American thighs should have the most intense reaction when jumping at this time. On the contrary, we can see that both the Japanese Minister of Industry and Economy and the South Korean Ministry of Industry have expressed that they do not consider this to be a so-called "countermeasures" and that the impact is not significant, but they also emphasize the need to communicate more with China to solve this problem. We say that this actually reflects the tension between Japan and South Korea, as key items such as gallium and germanium are equally important raw materials for high-tech enterprises in Japan and South Korea. If major countries such as the United States and Europe are unable to seek alternative supplies, it will be even more difficult for countries like Japan and South Korea, which rely almost entirely on imports for critical raw materials. Only by downplaying the situation of China's export control measures as much as possible and resolving conflicting conflicts, can Japan and South Korea strengthen negotiations to obtain export licenses, thereby maintaining the development of their semiconductor chip industry chain and minimizing its potential impact on related industries in the country.

Changjiang News: China emphasizes that it is completely legitimate and reasonable for China to learn from international practices and implement export controls on some gallium and germanium related items. What is your interpretation of this?

Liu Yang: First of all, it must be emphasized that China implements export controls on key raw materials such as gallium and germanium. On the one hand, it is for sustainable development and safeguarding national security interests. On the other hand, it is also to respond to the illegal unilateral sanctions imposed by Western countries on China in the semiconductor and other high-tech fields in recent years. We know that the EU has previously implemented export controls on some important items, such as the new regulations on dual-use export controls passed by the EU Council in May 2021, which aimed to prevent some materials from being used in the military field. In addition, we have all seen recently that the United States is coercing the Netherlands to implement blockade and control measures on the export of key equipment to China. Behind these measures is the comprehensive containment and blockade of China by the United States and the West in key strategic resources, including high-tech fields. Therefore, the export control measures we have introduced this time are targeted at strategic metal raw materials with dual-use properties. This type of export control measure is completely an international practice, and I believe it is more in line with the changes in the times and external environment, as well as the objective need to strengthen the protection of our national interests.

Changjiang News: For a period of time, the United States and the West have abused export controls under the guise of "national security". However, when the Chinese side drew on international practices and implemented export controls in a legitimate and reasonable manner, they came forward to "label" and "splash dirty water" on China. How do you see their double standard behavior?

Liu Yang: When Western countries in the United States question our reasonable export control measures, it's worth asking yourself first, especially why countries like the United States, Japan, and the Netherlands have set clear blockade restrictions on the normal export of their chips and related equipment against China. Especially in our view, some European and American countries have previously formed a so-called "mining alliance", which sets standards for the production and procurement of key mineral resources, with the main purpose of kicking China out of the global production and supply chain. I think it is precisely the baseless sanctions and blockades imposed by the United States and the West that have led to China taking legitimate countermeasures to safeguard its legitimate interests. So, in the face of the suppression and containment of China's high-tech industry by these Western countries, China has implemented reasonable export control measures in accordance with international practices and relevant domestic laws and regulations such as the Export Control Law, Foreign Trade Law, and Customs Law. This is just defending its legitimate national strategic security and development interests. This logic should be clarified. Therefore, when we look at these Western countries in the United States, taking advantage of China's reasonable export control measures to "label" and "pour sewage" on China, it is a typical double standard. When they want to suppress and contain China, they talk about "risk reduction" and "national security". However, when they are hurt by China's countermeasures, they shout "international order" and "free trade rules". This kind of pretending to be a "victim" behind their true face is very clear to everyone.

Changjiang News: From conducting a cybersecurity review of Micron's products sold in China in accordance with the law, to implementing export controls on gallium and germanium related items, based on your observation, what important signals have China's series of measures released to the outside world?

Liu Yang: Looking back, some countries in the United States and the West, especially in the semiconductor supply chain, often use their technological advantages to unreasonably suppress and block China's "long arm jurisdiction". However, this does not mean that China can only passively respond in related fields. On the contrary, whether from the perspective of our market advantages, production capacity, and reserve advantages, there are sufficient countermeasures available. In the past, we could counter each other equally, and in the future, we can even upgrade our "counter toolbox" to have richer means of safeguarding national security and interests. Once these countermeasures are resolutely applied, they can have a significant impact on countries that adhere to erroneous policies towards China. Especially in our view, the implementation of China's recently promulgated Foreign Relations Law is very necessary and timely, which means that we can completely counter some technological blockades by the United States and the West as soon as possible in the future. In this sense, facing severe external challenges and games, we still have a lot of work to do in maintaining our own security and development interests.