China’s gallium and germanium exports tumble as controls on shipments to the West take toll
- Beijing’s restrictions in response to Washington-led tech curbs affected deliveries to Japan and the United States
- Sales to Russia are up but more limits could be in the works for Western partners, analysts say
According to the General Administration of Customs, the full-year value of gallium exports fell by two-thirds to US$8.47 million in 2023 while sales of germanium were down 8 per cent to US$48.42 million.
Beijing imposed restrictions on exports of the raw materials and several of their compounds in August in apparent response to Washington-led restrictions on Chinese access to advanced technology.
The drop in annual export value was even greater in relation to Japan, where gallium shipments fell by nearly three-quarters to US$3.68 million and germanium deliveries decreased by roughly a third to US$3.76 million.
However, China’s germanium exports to Russia rose 78 per cent last year to US$10.99 million. China did not export gallium to Russia in 2022 but last year deliveries amounted to US$189,480, or more than half of the value of shipments to the US.
US expected to beat China’s export controls on gallium needed for radars
Analysts said that as tensions continued between China and the US, Beijing could add more key materials to its control lists.
“This is just a starting point for China to restrict exports of its key materials,” said Victor Gao, vice-president of the Beijing-based think tank Centre for China and Globalisation.
“The US should be fully prepared for further retaliation from China.”
Gao said China’s mining and processing of metals was one or two decades ahead of the world and the effect of the controls would be felt most in the most advanced products.
“The impact will be greater for hi-tech military supplies to the US, which relies on these two materials from China for some of its radars and warplanes,” he said.
According to the US Geological Survey, 53 per cent of US gallium imports between 2018 and 2021 came from China. Germany and Japan each contributed 13 per cent during that period.
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China restricts critical metal exports following Western semiconductor curbs in latest trade war
Gary Ng, a senior economist for Asia-Pacific thematic research at Natixis, said the main impact of the controls was on costs rather than availability.
Ng said the materials were not very rare and most firms would have stockpiled supplies, but they would need to absorb the higher cost of imports from other countries.
“It is unavoidable that Japan and the US will need to diversify the sources of the two metals,” he said.
“China knows its dominant position in critical materials well, as export control is a clear retaliation against the US-led semiconductor restrictions.”
In October, China also imposed export controls on graphite, a key material used in batteries for electric vehicles.
“Export controls are always a geopolitical tool, and it is just the beginning – China will use them more,” Ng said.
“The essence of a tool means there can be room for rolling back as a bargaining chip if US-China relations surprisingly improve, but this is unlikely.”
