China says it told the U.S. and Europe about the export controls in advance

A Chinese flag is displayed next to a “Made in China” sign seen on a printed circuit board with semiconductor chips, in this illustration picture taken February 17, 2023.
Florence Lo | Reuters

BEIJING — China’s Ministry of Commerce said Thursday the country told the U.S. and Europe about this week’s export controls in advance.

China did so through “export control dialogue channels,” commerce ministry spokesperson Shu Jueting said in Mandarin, translated by CNBC.

China does not target any specific country with the restrictions, she said, reiterating their goal is to protect national security.

The commerce ministry announced Monday that starting Aug. 1 China would restrict exports of gallium and germanium — two metals used in semiconductor manufacturing. That means companies in China need to apply for licenses in order to export the metals. China produces most of the world’s gallium and germanium, which are not found naturally but produced by refining other metals.

Spokesperson Shu said the ministry had yet to receive any applications for export licenses, and noted the rules don’t take effect until Aug. 1.

She told reporters more than once that the export restrictions aren’t a complete ban on exports, and that applications that meet the requirements will get approved. Shu did not share specifics.

The U.S. Treasury Department, Office of the U.S. Trade Representative and the EU Commission did not immediately respond to a CNBC request for comment.

“Beijing’s new licensing regime is a warning shot aimed squarely at the US, Japan, and the Netherlands following a trilateral agreement earlier this year to coordinate chip export controls,” Gabriel Wildau, managing director at consulting firm Teneo, said in a note Wednesday.

“Japan, Germany, and the Netherlands are the world’s top importers of Chinese gallium by volume, while Japan, France, Germany, and the US lead in germanium imports.”

Yellen’s China visit

News of the export curbs came just days before U.S. Treasury Secretary Janet Yellen was set to begin her China visit on Thursday.

China’s Ministry of Commerce separately announced that on Wednesday its minister Wang Wentao met that day with 12 foreign pharmaceutical companies, including GE HealthCarePfizer

GE HealthCare and Pfizer did not immediately respond to a CNBC request for comment.

— CNBC’s Clement Tan and Arjun Kharpal contributed to this report.

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