China’s Ministry of Commerce has ordered companies around the world not to transfer critical minerals mined in China to American firms after acquiring them from other countries. This is the first time China has included a broad ban on so-called transshipment in a government regulation on exports.
The move aims to replace imports with domestic products and deepen Beijing’s efforts to counter US trade policies, particularly those imposed by President-elect Donald J. Trump. The ban threatens to divide global supply chains further, forcing companies to choose whether products can be supplied only to the American market or only to the Chinese market.
China has been trying to persuade European companies to invest in China rather than the US. The move is part of a broader initiative to replace imports with domestic production, which dates back nearly two decades.
The ban includes four critical minerals: gallium and germanium, used in semiconductors; graphite and antimony; and superhard materials, which have applications in semiconductor manufacturing and munitions. China dominates the global mining and refining of these minerals.
The move is seen as a significant escalation of tensions between the US and China, with European businesses worried about being caught in the crossfire. Beijing has defended the new regulations, saying they are “a reasonable measure” aimed at maintaining stability and smooth flow of global production and supply chains.
The Biden administration has imposed restrictions on Chinese companies, including transshipment bans. This move is part of a long history of export embargoes in international relations, with China halting exports of rare earth metals to Japan in 2010 and the US imposing an embargo on oil shipments to Japan in 1941.
Source: https://www.nytimes.com/2024/12/09/business/china-critical-minerals.html