China is poised to impose stricter export controls on "dual-use" materials essential to defense and tech manufacturing, in what one lawmaker has called a "wake-up call."
Raw materials subject to the controls include tungsten, magnesium, titanium, and aluminum alloys and graphite—materials whose production and supply is dominated by China and that are critical to sectors spanning tech, aerospace, defense, transportation, and construction.
The controls follow U.S. sanctions on Chinese companies deemed to have exported to Russia electronics and other items with dual civilian-military potential that could aid in Moscow's war against Ukraine. Washington has also curbed exports of top-of-the-line chipmaking equipment produced by the Netherlands' ASML, citing the potential for high-end chips to fuel China's military advances.
China's Foreign Ministry said the regulations will establish a licensing framework for dual-use exports and introduce a restricted goods list. Exporters must also provide information about the final users and the intended purpose of the goods.
The move will "improve the efficiency of export control of dual-use items, better safeguard national security and interests, fulfill international obligations such as non-proliferation, and better safeguard the security, stability and smoothness of global industrial and supply chains," the ministry told the press last week.
Alex Capri, senior lecturer at the National University of Singapore, told CNBC the tightening of controls "clearly represents a tit-for-tat approach to trade in dual-use goods."
Republican Representative Rob Wittman called the new controls a "wake up call."
"Reliance on Beijing is a threat to our economic security, national defense, and tech innovation," Wittman wrote on X (formerly Twitter). "It is long past time to diversify our supply chains and ramp up production."
Washington is concerned over its dependence on China for critical materials, which it says poses a national security risk.
China also accounts for nearly 90 percent of magnesium production, in particular, and over 80 percent of worldwide production of tungsten, a metal critical for military products such as armor-piercing rounds and a range of civilian applications, from industrial cutting tools to microchips.
China has weaponized its supply chain dominance in the past, such as its temporary REE embargo against Japan in 2010 after a Chinese fishing boat collided with Japanese coast guard vessels.
"Perhaps, a shot across the bow aimed at the Trump administration?" Frank Giustra, co-chair of the International Crisis Group think tank, wrote about the export controls in an X post.
President-elect Donald Trump has vowed to impose levies of up to 60 percent on Chinese goods in what would be a further escalation of the trade war between the world's top two economies that began during his first administration. Trump will be sworn in as the 47th president on January 20, 2025.
The Biden administration earlier this year maintained the duties and raised them on certain categories of Chinese products, such as lithium-ion EV batteries.
Liu Pengyu, spokesperson for the Chinese embassy in the U.S., stressed the measures support trade security and align with international norms and China's strategic aim to become a "strong trading nation."
"These measures do not pose obstacles to normal international scientific exchanges, economic and trade said, or the smooth functioning of global industrial and supply chains," Liu added.
He stressed the move is not aimed at any specific nation or company, unlike "the practices of some countries that abuse the concept of national security to suppress particular nations or enterprises," an apparent reference to the U.S.
Newsweek reached out to the U.S. State Department with a written request for comment.
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