On July 3, 2023, China’s Ministry of Commerce (“MOFCOM”) and General Administration of Customs (“GAC”) announced restrictions on the export of gallium and germanium. Starting August 1, 2023, Chinese exporters of gallium, germanium, and certain related chemical compounds must obtain export licenses from MOFCOM before exporting these materials.
Gallium and germanium are “minor metals” produced as a byproduct during the refining process of other metals, such as zinc and aluminum. Gallium and germanium are integral to producing semiconductor wafers, integrated circuits, light-emitting diodes, electric vehicles, solar cells, fiber-optic cables, and other electronic components. The United States classifies both metals as critical to U.S. economic and national security.
While China’s announcement does not explicitly target any country, the government has said the restrictions are necessary to protect China’s national security, leading many observers to believe they may be a response to export controls on semiconductors imposed by the United States in October 2022 and similar measures undertaken by U.S. allies, including Japan and the Netherlands. The China Daily quoted a former Chinese vice minister of commerce as saying, “This is just the beginning of China’s countermeasures, and China’s tool box has many more types of measures available. If the high-tech restrictions on China become tougher in the future, China’s countermeasures will also escalate.”
China’s Latest Export Measures
These new export restrictions are partly based on China’s Foreign Trade Law and, in particular, the 2020 Export Control Law, which authorizes the government to impose restrictions on exports of certain items to “safeguard national security and interests, fulfill international obligations such as non-proliferation, and strengthen and standardize export controls.” According to the announcement, beginning August 1, 2023, exporters of gallium metal, germanium metal, and 12 associated compounds will be required to obtain licenses from MOFCOM prior to export from China. The announcement of the export restrictions details the specific customs classification codes of covered commodities to help exporters determine whether an item will be subject to the new restrictions. Notably, the new rules apply only to these specific commodities, not to finished products that incorporate them.Continue Reading China Slaps Export Restrictions on Two Critical Metals