China Restricts Export of Chipmaking Metals In Clash With US (bloomberg.com) 86
An anonymous reader quotes a report from Bloomberg: China imposed restrictions on exporting two metals that are crucial to parts of the semiconductor, telecommunications and electric-vehicle industries in an escalation of the country's tit-for-tat trade war on technology with the US and Europe. Gallium and germanium, along with their chemical compounds, will be subject to export controls meant to protect Chinese national security starting Aug. 1, China's Ministry of Commerce said in a statement Monday. Exporters for the two metals will need to apply for licenses from the commerce ministry if they want to start or continue to ship them out of the country, and will be required to report details of the overseas buyers and their applications, it said.
Impact on the tech industry "depends on the stockpile of equipment on hand," said Roger Entner, an analyst with Recon Analytics LLC. "It's more of a muscle flexing for the next year or so. If it drags on, prices will go up." China is the dominant global producer of both metals that have applications for electric vehicle makers, the defense industry and displays. Gallium and germanium play a role in producing a number of compound semiconductors, which combine multiple elements to improve transmission speed and efficiency. China accounts for about 94% of the world's gallium production, according to the UK Critical Minerals Intelligence Centre.
Still, the metals aren't particularly rare or difficult to find, though China's kept them cheap and they can be relatively high-cost to extract. Both metals are byproducts from processing other commodities such as coal and bauxite, the base for aluminum production. With restricted supply, higher prices could draw out production from elsewhere. "When they stop suppressing the price, it suddenly becomes more viable to extract these metals in the West, then China again has an own-goal," said Christopher Ecclestone, principle at Hallgarten & Co. "For a short while they get a higher price, but then China's market dominance gets lost -- the same thing has happened before in other things like antimony, tungsten and rare earths."
Impact on the tech industry "depends on the stockpile of equipment on hand," said Roger Entner, an analyst with Recon Analytics LLC. "It's more of a muscle flexing for the next year or so. If it drags on, prices will go up." China is the dominant global producer of both metals that have applications for electric vehicle makers, the defense industry and displays. Gallium and germanium play a role in producing a number of compound semiconductors, which combine multiple elements to improve transmission speed and efficiency. China accounts for about 94% of the world's gallium production, according to the UK Critical Minerals Intelligence Centre.
Still, the metals aren't particularly rare or difficult to find, though China's kept them cheap and they can be relatively high-cost to extract. Both metals are byproducts from processing other commodities such as coal and bauxite, the base for aluminum production. With restricted supply, higher prices could draw out production from elsewhere. "When they stop suppressing the price, it suddenly becomes more viable to extract these metals in the West, then China again has an own-goal," said Christopher Ecclestone, principle at Hallgarten & Co. "For a short while they get a higher price, but then China's market dominance gets lost -- the same thing has happened before in other things like antimony, tungsten and rare earths."
Interesting analysis (Score:5, Insightful)
So it's another stupid bit of obvious sabre rattling that, should it go further, amounts to a short term inconvenience for us and a long term inconvenience for them.
You'd think the Chinese government would have better advisers and try to target relevant exports that are more difficult to re-source.
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It's a commodity and it's not unique to China. The difference in the US sanctions
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and if China wants it can reopen the spigots therefore heavy investments made in other parts of the world would become losses.
Not if we retaliate by embargoing said materials. The US is still the second largest manufacturing company in the world. We buy a lot of resources. Investments would be a lot easier to secure with guarantees. "Dig up Gallium and we'll buy it from you while we ban the importation of Chinese Gallium."... Or perhaps you subsidize it for some period of time. There are all sorts of ways to make investing a no-brainer.
A singular fact y'all seem to forget is that the US only derives about 10% of its GDP from f
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Thank you for the obligatory whataboutism. When China does something, you know someone is going to say something about the US is worse.
China is using the fact they are able to pollute the environment for rare earth mining as ammo for a trade war. Such as 10 years ago when they made and sold solar panels in the US for less than the cost of the rare earths needed to make them, in order to destroy the nascent solar panel industry there and Europe.
China has been doing this BS for a long time. This is why com
Just for fun, china side of story (Score:3)
if correct then US is has huge Germanium deposits and yet still keeps tight restrictions on exporting it. Sorry, too lazy to fact check it.
Re:Just for fun, china side of story (Score:5, Informative)
if correct then US is has huge Germanium deposits and yet still keeps tight restrictions on exporting it. Sorry, too lazy to fact check it.
It's not a matter of laziness or even geopolitical considerations. Rather, it's a matter of market economics, just like for shale oil. Extraction is not done because the price is too low. Once the price increases, then the US companies would ramp up production.
If China wanted to play the role of Saudi Arabia, they could restrict exports, allow the global price to rise, allow US production to ramp up, then crater the price which would leave US companies unable to repay loans, which would then cause US companies to be reluctant to resume production even if future prices increase. To address this problem, the US could also tinker with the global market price (e.g., by tagging Chinese sales as dumping and effectively banning such sales) to allow US companies to gain a stable financial position.
Re:Just for fun, china side of story (Score:5, Informative)
The issue is economics, not occurence. These metals are not practical to mine for themselves, they are always produced as byproducts of processing massive quantities of something else. That's why China can produce them more cheaply than anyone else, because it extracts more of their host deposits than anyone else.
Gallium is the byproduct producing aluminum or zinc. China produces more than half the world's aluminum and about a third of the world's zinc. Chinese gallium is so cheap that other countries that used to produce it got out of the business; it currently produces about 97% of the gallium in the world.
Germanium is also a product of zinc production, and in the case of China 60% of its germanium production is from that. Germanium can also be extracted from coal fly ash. China consumes more coal than the rest of the world combined, and its coal fly ash supplies 40% of its germanium production. Overall China accounts for 2/3 of the germanium.
Clearly it's possible to replace China as a source of these materials; but you can't conjure production up overnight. A lot depends on stocks that companies have on hand and how long it would take other companies that used to make this stuff to restart production now the prices are going up.
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15 American states are majority powered by coal. You can guess which ones.
It's only the last few years that China's per capita coal grew to be larger than the US's.
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India is also big on coal - maybe they can check if they can also extract Germanium from coal fly ash?
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The NYPost is another Murdoch lie machine. Get a real source or STFU.
Re:Interesting analysis (Score:4, Insightful)
China produces 2/3rds of the world's germanium, so that is a problem. I don't see why Canada and Australia's production is so small, since so many of the zinc deposits associated with germanium production are located there. No doubt China's actions will stimulate new resource development projects. China proves itself once again an unreliable partner.
Re: Interesting analysis (Score:4)
The official and apparent reasons are a bit different.
The US is claiming China is a security threat and there have been some fairly high profile examples lately to convince the general public. Trade restrictions in the name of national security result.
China just wants to hit back and generally gives obvious lies as official reasons when they apparently want to save face or get some retribution or apply pressure to avoid the consequences of getting caught... which is counter-productive because it just reinforces the public support for the American government's actions.
The CCP is definitely less sophisticated when it comes to this kind of thing. Then again, domestically they don't really have to worry much about subtlety.
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Re:Interesting analysis (Score:5, Informative)
I don't see why Canada and Australia's production is so small, since so many of the zinc deposits associated with germanium production are located there.
Usually the reason is that China is doing it cheaper by failing to have any kind of environmental protection, so it wasn't really profitable to do it in those other countries. If China cuts off the supply then they're doing those countries a big favor.
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China proves itself once again an unreliable partner.
Much of the world doesn't see it that way. Quite the opposite, in fact.
The US started a trade war because the then President thought it would be good for him. Because the US is a democracy, the leadership changes regularly and so does policy. If you do a deal with a democracy today, it might get torn up tomorrow.
Meanwhile China's leadership is stable and it doesn't randomly decide to limit exports of important resources to your country, it only acts in retaliation.
Of course it's more complicated than that,
What do you consider "short term" (Score:1)
amounts to a short term inconvenience for us
That depends on what you consider to be "short term".
New mining takes a lot of time, effort and money to set up (even if a mine exists and you are just altering what you extract from what is being mined). is 5-10 years really "short term"? Especially in the electronics industry...
Re: Interesting analysis (Score:1)
They will be reducing their coal production and increasing their semiconductor production, so they'll need more for themselves.
It's a direct result of the USA's sanctions, where the USA is forcing the PRC to DIY their own stuff. So, yeah, the USA has done this to themselves.
Of course, if supplies allow, the PRC might still later make them again available for export, forcing the price down again or reducing the available market, if it so chose, and making it's production inviable.
None of this is good, but i
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So it's another stupid bit of obvious sabre rattling that, should it go further, amounts to a short term inconvenience for us and a long term inconvenience for them.
You'd think the Chinese government would have better advisers and try to target relevant exports that are more difficult to re-source.
China has the capability for extraordinary long term planning, unlike anything in the 'democratic' West.
Maybe this is part of their plan; they don't want dominance, they want the world to develop more balanced resource usage.
Similar to getting the world off of the US dollar as the default reserve currency. Ultimately, its good for the world as a whole.
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If China were that good at long-term planning, they wouldn't be putting out so much CO2. Instead, they'd be finding ways to pressure us to stop doing it, and also not doing it themselves.
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If China were that good at long-term planning, they wouldn't be putting out so much CO2. Instead, they'd be finding ways to pressure us to stop doing it, and also not doing it themselves.
If they were good long-term planners, they also wouldn't have cratered their birthrate and authored their own demographic collapse. And maybe they wouldn't be putting up tofu-dregs building projects that start to fall apart before they're fully in use, and sometimes even collapse before construction is finished.
Lack of foresight is a bitch, and culture-wide corruption makes it a right nasty one.
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If China were that good at long-term planning, they wouldn't be putting out so much CO2. Instead, they'd be finding ways to pressure us to stop doing it, and also not doing it themselves.
Maybe they are planning for North Manchuria to become a great agricultural region from warming, then take it back from Russia?
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Maybe they are planning for North Manchuria to become a great agricultural region from warming
In that case, they are super shitty planners.
AGW makes weather more chaotic (chaotic system, more energy in, more chaos out) so it's bad for growing crops no matter where you do it.
Re: Interesting analysis (Score:2)
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Darn it... (Score:2)
Both metals are byproducts from processing other commodities such as coal and bauxite, the base for aluminum production.
Bauxite isn't really a concern, Australia mines tons of that stuff and they're on good terms with us in America and the West in general. But coal's a tricky one. Dang, I wish I knew of a place that did a lot of stuff with coal.
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"Still, the metals aren’t particularly rare or difficult to find, though China’s kept them cheap and they can be relatively high-cost to extract."
This is a signal that they can limit the availability of rare metals, even if money isn't a concern. For example, smartphones have around 69 elements from the periodic table, while a typical car has 76-84 elements (depending on whether you count the ones not directly advertised).
As a result, you should anticipate higher prices or difficulties in findin
Re:Darn it... (Score:5, Interesting)
They used to know what they were doing.
But since Zhi became de-facto president for life-- they've gone thru a long series of forced errors.
China is having economic problems on many different levels now.
And their sabre rattling over Taiwan is causing foreign companies to move.
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It wasn't about whether they were evil... it was about whether they were competent.
Most nations engage in evil deeds occasionally. But they have done it daily for close to 100 years now.
But they were skilled, far-sighted political players until they let Xi become president for life.
I can't say if Mao was skilled or not.
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Who the fuck is Zhi?
That would be Winnie. He has all sorts of aliases but is still best known as the grand pooh-bear.
You can tell I'm proud, not everyone has a shithole dictator named after their city. Well there is Stalingrad but I think that was the other way around.
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The man's name is Xi, and he's just another CCP parasite. Their current problem is not enough jobs for their college grads. I don't know if he'll try to siphon them off on war, but the CCP does have to figure out what to do with them before they figure out what to do with the CCP.
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Xi is certainly less of a pragmatist than his predecessors, but the reality is China was always going to be facing some tough choices transitioning from a low-wage country with unsustainable double digit growth to a middle income country with even pretty good growth.
Some of the things he's done, like attacking China's frankly terrifying real estate bubble, are things that needed to be done, but he's done it with the authoritarian's characteristic reckless hubris.
The problem with dictatorships is that they'r
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I don't know... IMHO, the problem with dictatorships is that the dictators are surrounded by sycophants fairly quickly (under 5 years) and completely lose touch with reality.
The only exception I ever saw to this was Lee Kuan Yew of Singapore.
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The free press and term limits prevents the loss of touch with reality from getting so bad.
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But ultimately it doesn't matter. Processing these metals is not a problem and they're found all over the place. The only reason China kept it cheap is because the mining of these metals is enormously environmentally destructive and toxic to both the workers and the surrounding regions, and China kept it cheap by sweeping that all under the rug to be the sole provider and
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"Xi may be increasingly more desperate, and that desperation leads to panic and miscalculations."
FTFY
Re:Darn it... (Score:4, Interesting)
"Xi may be increasingly more desperate, and that desperation leads to panic and miscalculations."
FTFY
The core problem with China is that Xi = China's government now. And it's just too big for one man to run everything effectively without an effective bureaucracy.
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The core problem with China is that Xi = China's government now. And it's just too big for one man to run everything effectively without an effective bureaucracy.
China's bureaucracy is very effective. Unfortunately, it's most effective at perpetuating and expanding the corruption which enriches a few while gutting construction projects. The country is literally falling apart [youtube.com]. There are many other similar videos on YouTube.
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According to the US Geological Survey, Gallium is sourced from France and Kazakhstan
So, two Muslim countries. What could possibly go wrong?
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Their aim is to lower your standard of living slightly so that you are more likely to vote for politicians who support their cause.
Usually when everything gets more expensive, Americans tend to swing more towards the right. I don’t see that sort of political shift working towards China’s advantage, unless their goal is simply to further destabilize the US.
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Usually when everything gets more expensive, Americans tend to swing more towards the right. I don’t see that sort of political shift working towards China’s advantage, unless their goal is simply to further destabilize the US.
The Right in America is great at thumping its chest and yelling about furriners and commies and their moral shortcomings. But they're also quite happy to deal with those same evil folks if there's profit, comfort, and convenience involved.
For all their bible thumping and condemnations, the leaders on the Right worship wealth and profit first and foremost. "God" is merely a convenient rhetorical device and a symbol with which to manipulate the rubes.
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With metals like these ones, that aren't actually that hard to find but where a single country dominates the world supply, it would make a lot of sense for a large economy like the US or EU to establish a strategic reserve.
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Mind you, all that could easily change. Trump's attempts to slap tariffs [afr.com] on Australian [afr.com] minerals [nytimes.com] sure pissed the Aussies off enough that we were questioning our buddy-buddy relationship with the US.
I have no doubt that another Trump term would cause permanent damage to the relationship, and the US would quickly find itself being charged at the upper-end of the price spectrum of the minerals in TFA.
Policy change as an economical weapon (Score:2)
"When they stop suppressing the price, it suddenly becomes more viable to extract these metals in the West, then China again has an own-goal,"
But if China cancels its export policy, prices go down again, and western capitalists that invested on local production go bankrupt
We have seen that pattern with oil prices.
Never should have happened (Score:2)
Trade with communist countries should have never happened in the first place. If these countries wanted to join the human race then their god-awful regimes would need to go first. Now the world has China's crap to deal with thanks to greed and communism working together.
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There was this story about a splinter and a beam that seems relevant. Cannot remember where I read this though.
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There was this story about a splinter and a beam that seems relevant. Cannot remember where I read this though.
Probably in a work of propaganda written (among other reasons) to justify genocide.
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Yes, probably.
good times (Score:2)
Looks like whoever modded me hasn't read their Numbers. Try chapters 31 and 32.
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China isn't a communist country. It hasn't been since Mao died. It's got some of the trappings of it, but lots of countries still have the trappings of monarchy too. The US still has governors.
China is authoritarian, so the government can just decide to do things like make certain exports illegal. And the US is a liberal democracy so the government can't... oh.
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CCP - it's communist you fool.
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I've got a newspaper to introduce you to. It's called Pravda. It means "The Truth" in Russian so you know you can believe everything it says.
Two other pressures leading to this. (Score:1)
The USA is forcing the PRC to develop and make their own semiconductors, so they'll need more for themselves anyway.
Also, the PRC plan to stop increasing their use of coal and instead reduce their use of same, so they'll presumably need less coal at some point, and so not have so much available for export anyway.
I'd also imagine they're playing the same game as the USA plays "all the time" â" introducing sanctions just before negotiations so they can be used in bargaining.
ONOZ! Guess we'll have to find them (Score:2)
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You mean 93.7%. China takes up ~6.3% of Earth's land mass. For perspective, the US and Canada each make up ~6.1% or 12.2% together, Russia 11%, Brazil 5.6%, Australia 5.2%, India just 2%. Those are the top 7.
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Dangerous investment for west (Score:2)
Also, didn't the article forget to mention the human cost? The production needs people. And I'm pretty sure at least with gallium, it is extremely difficult or costly to produce in a way OSHA will agree with.
We don't produce many things, not because we can't, but because they hurt the people doing the work.
We can ask India to do it, Modi doesn't mi
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Cue automation, robots, and embodied AI....
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Only problem...
AI is *already* destroying thousands of jobs right now.
Embodied AI is already being tested.
Robots are already demonstrating replacing human warehouse workers.
And robotic drivers have already driven trucks close to 100 miles.
Things have been changing faster and faster over the last 20 years.
Doesn't matter (Score:2)
We'll get Germanium from Germany,
Francium from France,
Polonium from Poland,
Americium from the US,
Europium from the EU,
and also locally produced Californium and Berkelium from Berkeley.
Rare materials (Score:1)
Likewise, time to fund quantum dot band shifting so as to produce SiC solar cells with focused sunlight, yielding savings in production costs, higher per acre power AND reclaimed heat power all due to superior thermal distribution of 3H and 4H SiC, even over Copper, while maintaining much enhanced power / dollar.
While we're at it, assuming quantum dot optical band up-shifting is practical, here's your chanc
china says (Score:2)
China says to US: learn to mine.