Since my country implemented export controls on key rare metals such as gallium and germanium, the entire global semiconductor industry chain has been significantly shaken.
As an indispensable core raw material for the production of chips, radio frequency components, and optoelectronic semiconductors, gallium metal is a basic material that cannot be avoided by the third-generation semiconductor industry. After the introduction of my country’s control policies, European and American countries, together with Japan and South Korea, have been looking for alternative sources of supply around the world, trying to get rid of their dependence on my country’s rare metal supply chain.
Just when many people believe that control policies will be tightened in the long term, the trade data of my country’s export of 6 tons of gallium metal to Japan triggered discussions across the Internet. Many netizens bluntly said, “Why should we let go of the trump card that we have so hard to hold on?” Some even questioned whether the export control strategy was abandoned halfway.
In fact, if you only focus on a single export data, it is easy to fall into a cognitive misunderstanding: a single export volume of 6 tons accounts for a very low proportion of the overall trade, and it does not mean that export controls are fully liberalized. The overall framework of my country’s rare metal export approval system has never changed, and strict standards have always been maintained for approval thresholds, qualification review, and purpose verification.
Many public have misunderstandings about the control of rare metals as “one size fits all, no sale at all”. In fact, international trade always follows the principle of reciprocity. The core goal of export control has never been to completely cut off trade, but to regulate the flow of materials to avoid the unlimited hoarding of strategic raw materials, which will eventually be used to manufacture high-end chips and military products and be imported into the country, resulting in a passive situation in the industrial chain.
Tightening the gate is a means, and establishing rules is the ultimate goal. The gate can be fine-tuned or tightened according to the actual situation, but the initiative to formulate rules must be firmly held in one’s own hands. Moderate liberalization of exports in the civilian field is not to give up the game, but to lay the foundation for the subsequent establishment of a long-term and stable trade order.
As a major global semiconductor material and wafer manufacturing country, Japan itself has no rare mineral resources and relies on imports for most of its gallium raw materials. After the previous tightening of exports, the cost of raw materials for Japanese semiconductor companies continued to rise, and production capacity expansion plans were repeatedly shelved, and trade issues were communicated through diplomatic channels many times.
The 6 tons of gallium metal released this time is a targeted order approved by the relevant departments after strictly reviewing the end use and confirming that this batch of materials will only be used in the civilian optoelectronics industry and will not flow into the military industry. It can not only maintain normal civilian commercial exchanges, maintain the basic bottom line of free trade, but also continue to observe the response of overseas markets. A certain degree of tightness is the norm in the trade game between major powers.
The essence of this dynamic adjustment of tightening and relaxing is to firmly grasp the pricing power and voice of the rare metal supply chain.
my country occupies the vast majority of the world’s production capacity in the smelting and purification of gallium metal. This is the core confidence that we can regulate the global supply chain through export control.
Completely compressing export quotas in the long term will force overseas capital to invest in smelting projects regardless of cost, diluting our supply chain advantages. Properly retaining civilian supply exports can slow down the construction of overseas alternative production capacity and lengthen the cycle of our industrial advantage. At the same time, compliant exports in small quantities are also in line with international trade regulations, preventing Western countries with ulterior motives from taking advantage of public opinion, and ensuring that control measures are always within the rules and justified.
This moderate relaxation of exports to Japan is also a buffer card for China-Japan bilateral economic and trade negotiations.
The Sino-Japanese semiconductor industry chain is highly complementary. Japan controls upstream materials such as photoresist, special gases, and wafer equipment, while my country controls rare metal raw materials such as gallium, germanium, and rare earths. It is difficult for the two parties to completely decouple themselves from such a deep bond.
Moderately liberalizing the export of a small amount of gallium metal for civilian use is a signal to ease trade: We are willing to maintain normal trade in civilian raw materials, provided that the other party views bilateral economic and trade cooperation rationally and does not blindly follow the camp to increase technological blockade.
This flexible method is far more clever than cutting off supply with a single blow: compliant Japanese civilian electronics companies can obtain raw materials to ensure production, but high-end military semiconductor companies still cannot obtain sufficient gallium raw materials, accurately dividing the Japanese industry and hedging the extreme policy impulses of right-wing politicians.
The short-term tightening and tightening of quotas are all tactical moves. The real long-term plan is to reconstruct global rare metal trade rules and change the past unfavorable situation of resource exporting countries selling raw materials at low prices and importing finished products at high prices.
In the future, the export of rare metals will definitely move toward refined management, which will be reviewed one by one by country, company, and purpose. Overseas manufacturers that comply with the law and adhere to free trade will be able to obtain a stable supply of goods. Companies that participate in technological blockades and hoard raw materials for the military industry will be blocked from the export list, and a new, more fair and controllable trade order will be gradually established.
