The U.S.-China Tech War Is Slipping Toward A Point Of No Return
Beijing recently placed an export ban to the U.S. of two key metals. The move is a retaliation for U.S. bans of Chinese tech. The question remains of whether the superpowers can compromise before a total tech war breaks out.
PARIS — You will be forgiven if you've never heard of gallium or germanium. They are two critical metals that have suddenly become the center of the newest in a series of new cold wars between the United States and China.
Beijing announced this week that starting from August 1, Chinese exports of gallium and germanium will require prior authorization. The application must specify the recipient and the final product to justify the export. China cites “national security” as the reason behind the new regulation.
What may seem like a bureaucratic measure is actually the disguised Chinese response to the countless restrictions and sanctions imposed by the United States on Chinese technology in recent years.
An ongoing war
China is by far the world’s largest producer of gallium and germanium, two metals essential for manufacturing semiconductors, which have become central to industrial production.
To understand the stakes, all you need to do is read the title of an article in the Chinese official newspaper Global Times this week: “China’s control over gallium exports expected to hit the U.S. defense industry.” It’s hard to be more explicit.
Since then, sanctions and restrictions have been pouring in thanks to the extraterritoriality of U.S. decisions. Both the Taiwanese semiconductor giant TSMC and the Dutch manufacturer of the machines used to produce them, ASML, are now prohibited from exporting to China.
Washington has blacklisted Chinese companies, cutting off their access to technology and funds. And according toThe Wall Street Journal, measures are being prepared to restrict Chinese access to the American “cloud”.
China's Ambassador to the U.S., Xie Feng, with U.S. Treasury Secretary Janet Yellen. .
From retaliation to compromise
Before now, China had only reacted mildly to the U.S. measures, but it seems that they have finally decided to retaliate.
The timing is not coincidental.
At this stage, however, China has only introduced the export control mechanism, not specific restrictions. But the threat is there and it brings to mind a diplomatic crisis with Japan a decade ago when Beijing blocked its exports of rare earth minerals, which are strategic minerals it dominates in production.
The timing is not coincidental: the U.S. Treasury Secretary, Janet Yellen, is in Beijing this week as part of a process looking to ease hostilities. The threat to critical metal exports is an argument placed on the negotiation table by China to deter a total technological war.
In any case, China’s decision highlights one of the current contradictions: Beijing wields control over many mining and technological supply chains that are essential for the ongoing shift in the modern era. This should encourage compromise, but nothing is certain. Gallium and germanium will serve as ideal testing material.
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