China on Friday announced additional restrictions on its exports of graphite, a key ingredient in making batteries for electric vehicles, appearing to respond to recent U.S. measures on electronic chips.
China had already announced in July that certain products containing gallium and germanium, key raw materials for making chips, would be subject to stricter export controls.
Under new measures unveiled on Friday, Chinese exporters will now have to apply for permits to sell certain types of graphite to foreign customers.
The products affected by the export restrictions are graphite materials with high purity, high strength and high density and natural flake graphite.
“Given the need to protect its national security and interests, China applies export controls on certain graphite products,” the Commerce Department said.
Graphite is particularly used to make lithium-ion batteries for cell phones and electric vehicles.
China accounted for 65% of global production last year, according to the United States Geological Survey.
Global graphite consumption is expected to increase as demand for electric vehicles and the batteries required to power them continues to rise.
“China’s normal adjustment of export controls does not target any specific country or region, and exports that comply with existing regulations will be approved,” the ministry assured on Friday.
“If China’s export controls are strictly enforced, they will help maintain and potentially strengthen its position in the battery sector,” “given that almost all lithium-ion batteries are based on graphite anodes and China controls the largest share of the global market.” , estimates Daniel Kollar, automotive expert at the Shanghai-based consulting company Intralink.
“This clearly shows that the electrification plans of the United States and the European Union are at risk” if they do not ensure alternative and safe supply chains, he adds.
Washington this week announced a series of new restrictions on exports of semiconductors and machinery to make them to China. These measures, taken in the name of “national security,” aim to restrict Chinese companies’ access to this equipment.
The US has been trying to restrict Beijing’s access to cutting-edge technologies for several months. The Asian giant opposes this policy, which it believes contradicts the rules of international trade.
Trade and technology have been at the center of tensions between Beijing and Washington in recent years.
The European Union has also publicly stated that it wants to reduce its economic and commercial dependence on China.
Last month, the company launched an investigation into Chinese authorities’ subsidies to national electric car makers, which were accused of selling products at lower prices than their European rivals.