Jul 7, 2023, 6:35am EDT
East Asia

What to know: Janet Yellen criticizes Chinese export curbs as Beijing visit kicks off

U.S. Treasury Secretary Janet Yellen arrives at Beijing Capital International Airport in Beijing, China on July 6, 2023. Pedro Pardo/Pool via REUTERS/File Photo
Pedro Pardo/Pool via REUTERS

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The News

U.S. Treasury Secretary Janet Yellen criticized China for imposing export controls on critical metals during a trip aimed at rehabilitating relations between Washington and China.

She told Chinese executives she was “concerned” by China’s new export curbs on two minerals critical to semiconductor chip manufacturing.

We’ve collected three insights into the key issues at stake.

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  • China’s export controls on gallium and germanium are something of a chess move by the country, since the minerals are so critical to manufacturing. “They’re pretty key playing pieces,” mining strategist Christopher Ecclestone said. By regulating their export, China, which has long held a near-monopoly over the minerals, could create a situation not unlike the race to replace Russian natural gas following the onset of the war in Ukraine. Soon, countries will be scrambling to find gallium and germanium from non-Chinese sources. — Foreign Policy
  • According to a treasury official, Yellen’s talks with former Vice Premier Liu He and People’s Bank of China Governor Yi Gang were extensive, with discussions around each country’s domestic economy and the global outlook. Liu and Yellen have an ongoing rapport: At a January meeting in Zurich, the pair left their aides and continued talking on their own. Liu is a key figure in the country’s government and a trusted adviser to Chinese leader Xi Jinping. — Bloomberg
  • China’s Ministry of Commerce has warned that America’s own actions on export controls will backfire, Chinese state-affiliated media reported. Shu Jueting, a ministry spokesperson, told a news conference Friday that the U.S.’s maneuvers “undermine the principles of global free trade, disregard international economic and trade rules, and trample on the principles of fair competition.” Shu said that China’s curbs on gallium and germanium are not a full ban of their sale. — China Daily
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Know More

Yellen told executives in Beijing that she was also “concerned” by recent actions by Chinese authorities against foreign companies. “I’ve been particularly troubled by punitive actions that have been taken against U.S. firms in recent months,” she said during a roundtable with the American Chamber of Commerce in China.

In March, Beijing authorities detained five Chinese employees of Mintz Group, a consulting company, and closed its offices. In April, employees at Bain & Company, a management firm, were questioned at the firm’s Shanghai offices.