China hits back against Western sanctions (The Economist – July 23, 2023)

China produces 98% of the world’s raw gallium, a key ingredient in advanced military technology. This includes America’s next-generation missile-defence and radar systems.

In 2019, as China’s trade war with America was heating up, the People’s Daily predicted that China’s monopoly on rare earths, minerals crucial to the production of most modern hardware, would become a tool to counter American pressure. “Don’t say we didn’t warn you,” the Communist Party mouthpiece thundered. For years the bluster was just that.

Between 2009 and 2020 the number of Chinese export controls on the books ballooned nine-fold, according to the oecd, a club of mostly rich countries. Yet these restrictions were haphazard, informal and aimed at narrow targets—random warning shots rather than a strategic offensive.

As America ratchets up its sanctions against China, which among other things make it impossible for Western chip companies to sell Chinese customers cutting-edge semiconductors and the machines to make them, new volleys from Beijing are coming thick and fast.

Earlier this month, after China announced its latest export controls, this time on a pair of metals used in chips and other advanced tech, a former commerce ministry official declared that the measures were “just the beginning” of Chinese retaliation. On July 20th Xie Feng, China’s new ambassador to America, said that his country “cannot remain silent” in the escalating war over technology. A response, he hinted, was coming.

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