On July 3rd, according to the official website of the Ministry of Commerce, the Ministry of Commerce and the General Administration of Customs issued the "Announcement on Implementing Export Control on Gallium and Germanium Related Items" (hereinafter referred to as the "Announcement"). The Announcement pointed out that according to the relevant provisions of the Export Control Law of the China, the Foreign Trade Law of the China and the Customs Law of the China, in order to safeguard national security and interests, the State Council approved the decision to implement export control on gallium and germanium related items. It is worth mentioning that gallium and germanium are important rare metals, widely used in fields such as semiconductor materials and new energy. Among them, gallium is also known as the "new grain of semiconductor industry", and germanium is also one of the important semiconductor materials.

What are the unique features of these two metals? Gallium and germanium are important rare metals that are widely used in fields such as semiconductor materials and new energy. Among them, gallium is known as the "new grain of semiconductor industry", and is widely used in photovoltaic, magnetic materials, medical treatment, chemical industry, especially wireless communication, LED and other fields. As an important second generation semiconductor material, gallium arsenide is one of the most mature and largest production compound semiconductors at present. According to the Asia Metal Network Metal Encyclopedia, currently, the consumption fields of metal gallium in China include semiconductors and optoelectronic materials, solar cells, alloys, medical devices, magnetic materials, etc. Among them, the semiconductor industry has become the largest consumption field of gallium, accounting for about 80% of the total consumption. With the rapid development of the downstream application industry of gallium, especially in the semiconductor and solar cell industries, the global demand for metallic gallium will steadily increase in the future. It should be emphasized that gallium metal is very rare. According to Changjiang Nonferrous Metals Network, the global proven reserves of gallium metal are only 279300 tons, while China has 190000 tons, accounting for about 68%. From the perspective of global production, China has the highest proportion of production. According to the data of the United States Geological Survey (USGS), Kazakhstan, Hungary, Germany, and Ukraine stopped gallium production in 2013, 2015, 2016, and 2019, respectively. China's gallium share in the global gallium production continues to increase, and by 2021, it will account for more than 90% of the global gallium production. Therefore, gallium metal is not only regarded as one of China's strategic reserve minerals, but has also been listed in strategic or key mineral catalogs by developed regions such as the European Union, the United States, and Japan. Secondly, germanium is an important semiconductor material, which is rarely distributed in nature and has many special properties. It has extensive and important applications in semiconductor, aerospace measurement and control, nuclear physics detection, Fiber-optic communication, infrared optics, solar cells, chemical catalysts, biomedicine and other fields. Germanium has very limited global reserves and extremely concentrated distribution. According to statistics, globally, the proven reserves of germanium resources are mainly concentrated in countries such as China, the United States, and Russia. Among them, the country with the highest reserves is the United States, with germanium resource reserves reaching 3870 tons, accounting for 45% of the global content. China closely follows, with its germanium resource reserves accounting for 41% of the global total, becoming one of the important sources of germanium resources worldwide. Although the United States has higher reserves than China, according to USGS data, China is the world's largest producer of germanium, accounting for 68%, and has supplied 68.5% of the world's germanium in the past decade. Although germanium has limited reserves worldwide, its application value in high-tech, electronic industry and other fields is self-evident. Therefore, for major global economies, how to reasonably utilize and manage germanium resources has become a key issue that needs to be explored and solved.

02 | Export controls or a form of reciprocal countermeasures. According to the Global Times, globally, the Biden administration of the United States has concocted a consistent policy of attracting allies to work together to suppress China. By signing the "Energy and Resource Governance Initiative" and the "Mineral Security Partnership" (MSP), it has planned supply chain and industrial chain alliances, constructed a "small courtyard and high wall", attempting to decouple from China and block the process of globalization. At present, in the Semiconductor industry downstream of key metals, the United States is increasingly suppressing China, and the United States continues to draw in and coerce allies to form a common front. Japan announced export restrictions on 23 types of semiconductor equipment and materials at the end of May and officially implemented them from July 23rd. The Netherlands, as the world's largest Stepper producer, announced on June 30 that it would further tighten the export policy of Stepper, and high-end DUV Stepper would be restricted from exporting to China from September 1. Chen Fengying, a researcher at the World Economic Research Institute of the China Institutes of Contemporary International Relations, said that many of the rare key metals in the world are supplied by China, so why does China supply some western countries with chips, which in turn will hurt China's neck? Chen Fengying believes that on the evening of July 3rd, the two departments announced the implementation of export controls on two types of metal related items, or a form of reciprocal countermeasures, which is also a way to maintain national security and interests.

03 Jingtai Viewpoint | Export controls can also give China more say. From a macro perspective, both metals are currently raw materials for China's high-tech industry, especially in the semiconductor industry. China's reserves, supply, and total exports of both metals are not low. Through the export licensing system, we can have a thorough understanding and clarification of the end users and uses of key metal exports, and effectively avoid potential risks that pose a threat to national security and interests. Therefore, this step is particularly important. Only in this way can we ensure that key metals are used reasonably, rather than being illegally or abused. In current international trade, export controls can also give China more say in related fields. From a micro perspective, after export control, the prices of these two materials and related items in China may decrease, while overseas prices will rise because the supply exceeds demand, which is conducive to the development of China's related industries (cutting-edge high-tech), especially in the field of semiconductor and solar cells, which will accelerate the introduction of domestic Optical module manufacturers to domestic terminal customers, and related enterprises will also benefit.