China’s latest rare earth export controls could open an unexpected new front in its chip war with the United States, a prominent Chinese industry observer said.
Telecoms industry veteran Xiang Ligang said he was “very surprised” to see that new export control rules announced by the commerce ministry on Thursday included a clause requiring case-by-case review of rare earth exports intended for use in advanced chipmaking or military-related artificial intelligence (AI).
In a post on social media, Xiang said the clause suggested China had largely resolved its semiconductor equipment bottlenecks. He said it also indicated Beijing was unafraid of any major impact on foreign makers of advanced lithography systems that depend on Chinese rare earths.
“China’s chip industry no longer faces research and development hurdles – those have already been solved,” he wrote, adding that the next step was to expand production capacity and strengthen manufacturing.
He said some Chinese companies had reached world-class levels with equipment developed in just a couple years, and that Beijing could expand export controls to chip-making machines in the future, targeting the US.
“China will also need to regulate the export of chip equipment and cannot allow it to be exported freely. The United States wants to develop its own chip manufacturing, [but it] cannot casually use equipment from China,” he said. “A few years ago, if we had said this, some people might have laughed at us.”
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