25 votes

China exports of gallium and germanium, used in manufacture of semiconductors, fell to zero in August

Posted by boxer_dogs_dance
Tags: security.national, china, trade, exports, materials, gallium, germanium, semiconductors, resources.strategic, manufacturing, geopolitics, author.laura he, source.cnn
https://www.cnn.com/2023/09/21/economy/china-chip-material-exports-drop-intl-hnk/index.html

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Title
China just stopped exporting two minerals the world's chipmakers need | CNN Business
Published
Sep 21 2023

6 comments

  1. [4]
    hushbucket
    Link
    Admittedly I haven't been paying close attention, but this is the first I've read that China is retaliating against US. I've always thought the Chinese response was restrained, not wanting to...

    Beijing imposed curbs on sales overseas, citing national security.
    China produces about 80% of the world’s gallium and about 60% of germanium, according to the Critical Raw Materials Alliance.
    The curbs are indicative of China’s apparent willingness to retaliate against US export controls, despite concerns about economic growth, as a tech war simmers.

    Admittedly I haven't been paying close attention, but this is the first I've read that China is retaliating against US. I've always thought the Chinese response was restrained, not wanting to disruption American corporate investment in China and patiently waiting for regime change in Washington.

    11 votes
    1. [3]
      NaraVara
      (edited )
      Link Parent
      My impression of the policy implementation apparatus in China is that they have trouble executing on things with finesse. It seems like policy dictates from up high are subject to these positive...

      My impression of the policy implementation apparatus in China is that they have trouble executing on things with finesse. It seems like policy dictates from up high are subject to these positive feedback loops, so when the central government says "We need more [thing]" the general mandate filters down the ladder and everyone is being measured against their progress at [thing], so it ends up being a mad rush to maximize [thing.]

      This is probably a key driver of their growth up until now, because [thing] was stuff like "build infrastructure, build housing, get factories up, get orders in, etc." But now that they seem to have saturated the easy wins where you can improve at things by just throwing capital at it, and subsequent gains require more finesse and a deft touch, they're struggling to adapt.

      The American system is prone to gridlock and general slowness and chronic cost overruns, but a lot of that is from productive tension from things like auditing and reviewing whether money is being spent wisely and efficiently or to make sure all stakeholder input is accounted for. This likely results in the decisions that do get made being better (aside from some specific problem areas that have weird political dynamics), but overall policy implementation being frustratingly slow and way too expensive.

      There must be a happy medium somewhere (I think Japan or Germany are probably close).

      8 votes
      1. [2]
        iBleeedorange
        Link Parent
        Hasn't Germany and Japan stagnated economically?

        Hasn't Germany and Japan stagnated economically?

        1. NaraVara
          Link Parent
          Japan is actually coming out of its doldrums now. But both of them have demographics problems. They can’t attract or integrate new immigrants and they don’t have the people to really grow rapidly....

          Japan is actually coming out of its doldrums now. But both of them have demographics problems. They can’t attract or integrate new immigrants and they don’t have the people to really grow rapidly. All the manufacturing base is being swallowed by emerging economies, mainly China.

          4 votes
  2. [2]
    AevumDecessus
    Link
    Having this information makes this sound a lot more like a "cutting off your nose to spite your face" sort of situation, especially compounded with the significant drop in export demand that...

    China may be the industry leader in producing the two elements, but there are alternative producers, as well as available substitutes for both materials, Eurasia Group analysts said in a July research report.

    Having this information makes this sound a lot more like a "cutting off your nose to spite your face" sort of situation, especially compounded with the significant drop in export demand that they're facing starting with last month as well.

    6 votes
    1. arch_mage
      Link Parent
      I agree, China right now needs to exporting as much as it can right now to keep its economy afloat after the pull out foreign investment and sharp decline of demand for Chinese manufacturing....

      I agree, China right now needs to exporting as much as it can right now to keep its economy afloat after the pull out foreign investment and sharp decline of demand for Chinese manufacturing.

      After China pulled this same trick in 2010 most countries that need Rare Earth Metals have held stockpiles of extras in warehouses just in case. So we wouldn't likely see a significant price increase until these stockpiles are exhausted.

      Its also worth noting that these metals aren't "rare" by any means. Both of these metals are byproducts of Zinc processing which China is really the main producer of because they heavily subsidize the industry.

      13 votes