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Lanon Wee

Restricting China's Outbound Shipments of Critical Computer Chip Components

The Chinese government is instituting stricter regulations on the exportation of two key materials used in the production of computer chips. Beginning in the following month, anyone exporting gallium and germanium from China, the world's most significant producer of the two metals, will be required to obtain a special license. This is a reaction to the steps that Washington is taking to restrict Chinese access to some sophisticated microprocessors. Just days before US Treasury Secretary Janet Yellen's important journey to Beijing, an announcement was made. On Monday, China's Ministry of Commerce declared that limits were essential to "protect national security and interests". Silver-based metals are employed in semiconductors, communications devices and military hardware. These elements are also vital elements in such items as solar panels. Semiconductors, the foundational components of all kinds of technologies ranging from cell phones to military equipment, are at the heart of a highly heated disagreement between the two foremost economies across the globe. The US has placed limits on China's utilization of technology that may have a potential application in the military, including processors employed for supercomputer applications and AI. In October, Washington declared that any business worldwide wishing to export chips to China with the utilization of US-made tools or software would need to possess a licence. Nations like the Netherlands and Japan have taken part in the efforts. Last week, the Netherlands declared that it would be limiting the export of specific semiconductor production apparatus. The Netherlands previously declared their intention to limit the exportation of their "most state-of-the-art" microchip technology, and this is now being implemented. It is anticipated that Dutch microchip supplier ASML, who is a major participant in the worldwide microchip supply chain, will be impacted by the controls. At the same time, Japan intends to impose limits on certain of its semiconductor production exports. Announced in March, 23 types of semiconductor manufacturing equipment will be impacted by the measures. China has often referred to the US as a "technology hegemony" in reaction to Washington's established export regulations. Within the last few months, Beijing has set in place limitations for organizations in the US that are tied to the US armed forces like the aerospace business Lockheed Martin. Treasury Secretary Janet Yellen, who is scheduled to embark on a four-day trip to China beginning Thursday, has cautioned against severing economic connections between the U.S. and China. "I opine that we and China both benefit from a free and open exchange of trade and investment, and that it would be ruinous for us to try and sever our ties with China," she pronounced, when present before Congress last month. Ms Yellen will be the second high-ranking US official to visit the country this year. In June, US Secretary of State Antony Blinken had a meeting with China's President Xi Jinping in Beijing, which served to resume high-level communications between the two rival superpowers.

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