China has initiated restrictions on the exports of products and materials that incorporate the metals gallium and germanium, both of which are key components in semiconductors, 5G base stations, and solar panels.
The restriction is viewed as a response to the restrictions placed by the U.S. and other countries on the sale of high-end chips and chip-manufacturing equipment to China - primarily from Nvidia.
The U.S. contends that its measures against Chinese chip makers are designed to prevent China from advancing technologies that could offer it an advantage in defense or other sectors deemed critical to national security.
Beijing has argued that these measures aim to suppress China’s economic growth.
As of August 1, according to the announcement from China's Ministry of Commerce, exporters of gallium and germanium will need to apply for licenses and report details of their overseas buyers in an effort to "safeguard national security and interest." Although China is a dominant player in the global production, refining, and processing of many critical raw materials, including gallium and germanium, it still relies on Western technology to produce high-performance chips.
Gallium, which is primarily sourced from China, is a critical ingredient in an expanding class of semiconductors used in a wide array of commercial and military applications. Germanium, another crucial metal, is commonly found in solar cells and fiber-optic systems.
Economic wars escalate a bit.
