China hits back against Western sanctions

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China hits back against Western sanctions
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  • 📰 TheEconomist
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China is becoming less timid in its retaliation against American economic warfare

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, a club of mostly rich countries.

The list of recent laws is long. An “unreliable entities” list, created in 2020, punishes any company undermining China’s interests. An export-control law from the same year created a legal basis for an export-licensing regime. In 2021 year an anti-sanctions law enabled retaliation against organisations and individuals who carried out the sanctions of other countries.

The laws’ vague wording makes it difficult for Western companies to assess their potential impact on their business in China. The “mother of all sanctions laws”, as Henry Gao of Singapore Management University describes the foreign-relations law, vows to hold accountable anyone acting in a manner deemed “detrimental to China’s national interests…in the course of engaging in international exchanges”.

The restrictions on the two chip metals, gallium and germanium, could pose a strategic headache to America. The rules, which come into force on August 1st, require exporters to apply for licences to sell the metals to foreign customers. 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.

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