China's Metal Export Curbs Get G7's Attention

China’s decision to control the export of two key metals showed it has some power to retaliate against moves by the US, Japan and Europe to cut Beijing off from advanced technology. But it also risks backfiring, Bloomberg News reported.

Photo Insert: South Korea says there are other sources for gallium and germanium, which are strictly not rare earth metals.

The new export licensing system unveiled late Monday highlighted China’s dominant position in the production of gallium and germanium, which are used to make chips, electric cars and telecommunications equipment.

Yet, the measure is a double-edged sword, and may simply accelerate efforts by many countries to reduce dependence on China.

If Beijing did at some point use these new rules to restrict shipments and cut supply to other nations, prices would likely rise and make it more economical to boost output in Japan, Canada, the US or elsewhere.

South Korea says there are other sources for gallium and germanium, which are strictly not rare earth metals.

The European Union (EU) announced a new economic security strategy last month and launched a Critical Raw Materials Act to ease financing and permitting for new mining and refining projects and also to strike trade alliances to reduce the bloc’s dependence on Chinese suppliers.

If the new rules were used to restrict exports, that escalation of tensions could threaten the bloc’s ability to transform its economy to become more environmentally friendly, Rebecca Choong Wilkins, Betty Hou and Jennifer Creery also reported for Bloomberg News.

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