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Ministry: US abuse of export controls will backfire

By Zhong Nan | | Updated: 2023-07-07 05:39
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The United States' continuous abuse of export control measures and its intensified suppression and containment of China's semiconductor industry will hinder global economic and trade cooperation and eventually backfire, the Ministry of Commerce said on Thursday.

Shu Jueting, a spokeswoman for the ministry, said at a regular news conference that the unilateral actions taken by the US are intended to fragment the global semiconductor market. They undermine the principles of global free trade, disregard international economic and trade rules, and trample on the principles of fair competition.

Semiconductors are a prime example of global industrial collaboration. China, as the world's largest semiconductor market, accounts for about one-third of global chip sales. This is a result of mutually beneficial cooperation between Chinese and global companies, according to information released by the ministry.

Shu added the actions taken by the US not only harm the legitimate rights and interests of Chinese businesses but also undermine the interests of numerous countries and regions. The concerns expressed by the US semiconductor industry further highlight this point.

The implementation of unreasonable export controls by the US will have a significant detrimental impact, said Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing. The controls initially impact the countries being sanctioned and subsequently reverberate through the global semiconductor industrial chain, affecting both the implementing party and third parties involved, Tu said.

Under such circumstances, established understanding and balance among relevant parties are both disrupted, and the parties that have had the controls imposed on them may resort to retaliatory or self-protective measures, further exacerbating disruptions in regional and even global semiconductor industries and related businesses, he said.

Shu, from the commerce ministry, reiterated that China's export control measures on gallium and germanium-related items are not targeted at any specific country, and the implementation of such actions conforms to internationally recognized practices.

She said prior notifications were made through channels such as the China-US and China-EU export control dialogues before the announcement was made on Monday.

China's moves do not impose a complete ban on exports. Instead, items that comply with relevant rules will be granted permits, according to the ministry.

"Gallium and germanium-related items have obvious dual-use attributes in both civilian and military applications," said Shu, adding that the implementation of export control measures on such items is a common international practice.

Li Yong, deputy director of the expert committee of the China Association of International Trade, said as export reviews are conducted on a case-by-case basis, imports under normal trade relations will not be affected by the measures.

"Export controls aim to balance the relationship between supply and production capacity. Some countries have significant production capacity but do not engage in extraction and utilization," said Li. "Meanwhile, other countries have ceased production and heavily rely on imports from China."

He said that this situation has not only disrupted the balance of supply, demand and production capacity but also unjustifiably exaggerated the risks of import dependency on China.

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