An export control list issued by the Chinese government to restrict the export of about 700 dual-use items took effect on December 1 and will cover more items to serve China’s future trade and national security needs.
The list was implemented to fulfill the basic requirements of the current Export Control Law and the newly released Regulations on Civil-Military Dual-Use Items to restrict the export of items including nuclear, biological and chemical products and missiles, according to the Chinese Ministry of Commerce (MoC).
In addition, a system of export control classification numbers (ECCN), similar to that of the United States, was also implemented to cover 10 broad categories and five product groups.
The MoC said the new export control list will help guide all parties to comprehensively and accurately implement China’s dual-use items export control laws and policies, improve the efficiency of related governance, better safeguard national security and interests, and fulfill international obligations such as non-proliferation. It said it would expand the list if needed.
The new list and the ECCN system were launched after the State Council unveiled the Regulations on Civil-Military Dual-Use Items on October 19. The new regulations were approved in a meeting of the State Council standing committee on September 18 after G7 countries raised concerns in April about Chinese firms’ shipments of weapon components to Russia.
It remains unclear whether the new export control list will stop the export of dual-use items from China to Russia. Some Chinese commentators said the list will at least prevent the US from obtaining China’s critical metals, rare earths and key electronic parts.
“The launch of the export control list is a precise attack to the heart of the US military industry,” a Jiangsu-based military columnist wrote in an article published on November 28. “This is not an ordinary ‘embargo’ but an all-round blockade to completely cut off the Chinese supply chain that the US relies on.”
He wrote the list covers a wide range of products, including computers, electronic devices, chemicals, sensors, lasers and aviation navigation systems. If China uses the list to fight a technology war, the US won’t be able to find alternative products elsewhere, the writer said.
“A number of US defense contractors have been sanctioned by China due to their arms sales to Taiwan,” he wrote. “China has a decisive position in the supply chain of key materials such as rare earths, and the US cannot circumvent it.”
The writer also links the matter to a smuggling case in which a Chinese person surnamed Du was arrested for carrying a bottle of gallium powders when departing the country earlier this year. He says this case is a warning to those who want to make money by illegally exporting China’s key raw materials.
Export control loopholes
In August 2023, China imposed export restrictions on gallium and germanium. Gallium is used in compound semiconductors, which are often used to improve transmission speed and efficiency in radars. Germanium is used in night-vision goggles and the solar cells used to power many satellites.
Last December, China imposed export controls on graphite, a key raw material for making electric vehicle batteries. In September this year, the country started restricting the export of antimony, which can be used in military equipment such as infrared missiles, nuclear weapons and night-vision goggles, and as a hardening agent for bullets and tanks.
US Customs data shows that China’s shares of total US imports of these commodities haven’t moved much since China imposed export controls on gallium, germanium and graphite in 2023, the Peterson Institute for International Economics (PIIE), a Washington-based think tank, said in an article on October 31.
PIIE said China requires exporters to file paperwork that includes export agreements, descriptions and certifications of end consumers and intended end use and information on the importing company but all these requirements will only increase compliance work and not actually reduce exports.
Besides, it said China may not really want to starve US supply chains of critical minerals as this will push the US to source raw materials elsewhere.
Fentanyl precursors
While Beijing wants to use its critical minerals as a bargaining chip in potential trade talks, US President-elect Donald Trump wants China to stop shipping fentanyl precursors to Mexico and the US.
On November 25, Trump said he would sign an executive order imposing a 25% tariff on all goods coming from Mexico and Canada to force them to crack down on illegal immigration and drug smuggling into the US.
He said he would charge an additional 10% on products imported from China, above any additional tariffs, until Beijing cracked down on fentanyl smuggling.
“The idea of China knowingly allowing fentanyl precursors to flow into the US runs completely counter to facts and reality,” said a spokesperson for the Chinese embassy in Washington.
In August 2024, China added several fentanyl precursors, including 4-AP, 1-bloc-4_AP and norfentanyl, to its list of controlled precursor chemicals and started requiring exporters to obtain a license.
In October, the US Justice Department announced charges, including attempted distribution of synthetic opioids and fentanyl precursors, against eight China-based chemical companies and eight employees.
“As Trump will probably use the International Emergency Economic Powers Act (IEEPA) to impose a 10% tariff on Chinese goods, he doesn’t need to go through any lengthy Section 301 investigations or seek approval from the Congress,” a Beijing-based financial columnist says. “This will make the United States’ tariff policy more arbitrary and unpredictable in the Trump 2.0 era.”
He says people should not underestimate the negative impact of this 10% tariff as it could be the beginning of a bigger trade war.
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