China’s Mineral Ban Escalates U.S.-China Tech War

China has banned shipments to the US of several “dual-use” minerals and metals used in semiconductor manufacturing and military applications, in a rapid retaliation by Beijing against export curbs from Washington that pushed the shares of a leading Chinese tech company down 10 per cent.

China’s commerce ministry on Tuesday said it would not permit the export of dual-use items related to gallium, germanium, antimony and superhard materials to the US, and that it would implement stricter controls for graphite-related items.

“The US has broadened the concept of national security, politicising and weaponising trade and technology issues, and abused export control measures,” it said in a statement.

“To safeguard national security . . . China has decided to strengthen export controls on dual-use items to the US,” it added, noting that the measures would be effective immediately.

Four major Chinese industry associations, representing the internet, auto, semiconductor and communications industries, reacted to the US moves by calling on their members to reduce purchases of US semiconductors.

“US chip products are no longer safe or reliable, and relevant Chinese industries should be cautious in procuring US chips,” said the China Semiconductor Industry Association.

The embargoed minerals and metals are used in the production of semiconductors and batteries, as well as communications equipment components and military hardware such as armour-piercing ammunition.

China’s latest shipment ban to the US makes clear President Xi Jinping’s government is willing to target western economic interests to hit back against Washington’s chip restrictions.

It also highlights Beijing’s dominance of the global supply of dozens of crucial resources. China produces 98 per cent of the world’s supply of gallium and 60 per cent of germanium, according to the US Geological Survey.

Washington on Monday imposed a range of new sanctions designed to slow the development of China’s semiconductor industry.

They include tougher restrictions on the export of critical semiconductor manufacturing tools and a ban on the export to China of advanced high bandwidth memory (HBM) chips, a crucial component in artificial intelligence products.