BEIJING/SHANGHAI: China's export controls on metals used in semiconductors are "just a start", an influential Chinese trade policy adviser said on Wednesday, as Beijing ramps up a tech fight with Washington days before a visit from US Treasury Secretary Janet Yellen.
Shares in some Chinese metals companies rallied for a second session as investors bet that higher prices for gallium and germanium, which Beijing's export restrictions target, could boost revenues.
Germanium is used in high-speed computer chips, plastics, and in military applications such as night-vision devices as well as satellite imagery sensors. Gallium is used in building radars and radio communication devices, satellites and LEDs.
China's abrupt announcement of controls from Aug 1 on exports of some gallium and germanium products, also used in electric vehicles (EVs) and fibre optic cables, has sent companies scrambling to secure supplies and bumped up prices.
On Wednesday, former Vice Commerce Minister Wei Jianguo told the China Daily newspaper that countries should brace for more should they continue to pressure China, describing the controls as a "well-thought-out heavy punch" and "just a start".
"If restrictions targeting China's high-technology sector continue then countermeasures will escalate," added Wei, vice commerce minister 2003-2008 and now vice chairman of China Center for International Economic Exchanges, a state-backed think tank.
Announced on the eve of US Independence Day and just before Yellen visits Beijing from Thursday, analysts said the controls were clearly timed to send a message to the Biden administration, which has been targeting China's chip sector and pushing allies such as Japan and the Netherlands to follow suit.
China's move has also raised concerns that restrictions on rare earth exports could follow, with analysts pointing to a curb on shipments imposed 12 years ago in a dispute with Japan.
China is the world's biggest producer of rare earths, a group of metals used in EVs and military equipment. — Reuters
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