Why is China currently implementing export controls on gallium and germanium related items? Related | Item | Export

On the evening of the 3rd, the Ministry of Commerce and the General Administration of Customs announced that, in accordance with the relevant provisions of the Export Control Law of the People's Republic of China, the Foreign Trade Law of the People's Republic of China, and the Customs Law of the People's Republic of China, it has been decided to implement export controls on gallium and germanium related items from August 1st this year.

In response, Foreign Ministry spokesperson Mao Ning stated on the 4th that China has always been committed to maintaining the security and stability of the global supply chain, and has always implemented fair, reasonable, and non discriminatory export control measures. It is an international practice for the Chinese government to implement export controls on related items in accordance with the law, without targeting any specific country.

Why are gallium and germanium?

According to the announcement, items that meet the following characteristics shall not be exported without permission:

Gallium related items, including metal gallium, gallium nitride, gallium oxide, etc.

Germanium related items, including metallic germanium, zone melting germanium ingots, phosphorus germanium zinc, germanium epitaxial growth substrates, etc.

The announcement states that export operators should handle export license procedures in accordance with relevant regulations, apply to the Ministry of Commerce through the provincial commerce department, fill out the dual-use item and technology export application form, and submit multiple documents such as end-user and end-user certificates.

According to the announcement, the Ministry of Commerce shall conduct an examination from the date of receiving the export application documents, or in conjunction with relevant departments, and make a decision on whether to grant or not to grant the license within the statutory time limit.

The export of items listed in this announcement that have a significant impact on national security shall be submitted to the State Council for approval by the Ministry of Commerce in conjunction with relevant departments.

The reason for implementing export controls on gallium and germanium related items is due to their special importance.

Gallium compounds are widely used in high-tech fields such as wireless communication, chemical industry, medical equipment, solar cells, and aerospace, and are known as the "new grain of semiconductor industry" and the backbone of electronic industry.

Nowadays, a series of compounds prepared based on gallium, such as semiconductor materials, optical and electronic materials, special alloys, organic metal materials, and new functional materials, are important basic materials in high-tech fields such as communication, military industry, aerospace, new energy, and medicine. With the development of the electronic information industry, gallium has become an emerging strategic mineral resource.

Germanium is also an important semiconductor material. According to public information, germanium resources are relatively scarce worldwide, but germanium is a strategic optical information material that can be used for solar germanium cells on satellites. The application of germanium in healthcare is also receiving increasing attention. At present, China and the United States basically monopolize the global germanium resources, and China is the second largest germanium resource country in the world.

Why are export controls implemented?

The announcement issued by the Ministry of Commerce and the General Administration of Customs clearly states that, in order to maintain national security and interests, with the approval of the State Council, it has been decided to implement export controls on gallium and germanium related items.

Before China implemented export controls on gallium and germanium related items, Western countries repeatedly imposed semiconductor suppression and containment measures on China, resulting in various "small actions".

Last October, the US Department of Commerce upgraded its export control measures against China in areas such as semiconductor manufacturing and advanced computing, imposing unprecedented licensing restrictions on the export of advanced chips, software, and various semiconductor manufacturing equipment used for the production of advanced chips to China.

On May 23rd this year, the Japanese government officially introduced export control measures for 23 types of semiconductor manufacturing equipment; On June 30th, the Netherlands announced that some semiconductor related products such as lithography machines will be included in export controls.

In response, a spokesperson for the Ministry of Commerce bluntly stated that in recent years, the United States has continuously generalized the concept of national security, abused export control measures, and even sacrificed the interests of allies to coerce other countries to implement semiconductor suppression and containment against China, artificially promoting industry decoupling and chain breaking, seriously damaging the development of the global semiconductor industry. China firmly opposes this.

Analysts point out that China's implementation of export controls is fundamentally different from that of the United States.

Tu Xinquan, Dean of the China WTO Research Institute at the University of International Business and Economics, previously wrote that according to the "general exception clauses" and "security exception clauses" in Articles 20 and 21 of the General Agreement on Tariffs and Trade, under the WTO framework, export controls should generally be aimed at maintaining national security, safeguarding public interests, or fulfilling international obligations. The United States has implemented unreasonable export controls on China without conclusive evidence, which clearly violates WTO rules and is a blatant violation of international law.

Tu Xinquan believes that the implementation of unreasonable export controls by the United States is like opening the "Pandora's Box": export controls first affect the regulated party, and then this impact is transmitted through the global semiconductor industry chain to policy implementers and third parties. The existing tacit understanding and balance of power among relevant parties will be disrupted, and other parties besides the policy implementers may also introduce various similar measures to retaliate or protect themselves, leading to huge fluctuations in the regional and even global semiconductor industry and related industries.

He said that if the United States continues to implement unreasonable export controls, it will only further disrupt the normal market order of the semiconductor industry, making all countries or regions in the semiconductor industry chain losers.