Beijing is strengthening its grip on cutting-edge Chinese technology, aiming to maintain critical know-how within its borders as a trade tension between the US and Europe.
Chinese authorities have made it more difficult for some engineers and equipment to leave the country in recent months, suggesting new export controls to preserve key battery technology, and with multiple industry figures and ministries notifications and moved to limit technology for the treatment of critical minerals.
The country’s key technology protections include tariffs from US President Donald Trump and trade lines with Europe, with more local and foreign groups moving production elsewhere in the trade lines on automobiles He is threatening.
Among the hit companies is Foxconn, Apple’s leading manufacturing partner. This has led to India to diversify the supply chain of the Silicon Valley Group.
Those familiar with the issue said Chinese officials had made it difficult for Taiwan-owned contract manufacturers to send machinery and technical Chinese managers to India.
Another Taiwanese electronics company manager said they also face challenges of sending some equipment from China to Indian plants, but he said shipments to Southeast Asia are normal.
Indian officials claim that China was using customs delays to block the flow of south-facing components and equipment. “Electronic industry supply players are told not to establish manufacturing and assembly operations in India,” the official said, asking them not to name them. The rest of the world of media sites has previously reported on some of the issues with Foxconn.
Foxconn Assence Line India. Apple is keen to build supply chains domestically ©Karen Dias/Bloomberg
Analysts say Beijing’s emerging playbook is similar to Western technology transfer restrictions, which have been loudly criticised as unfair. The informal control has emerged to target China’s geopolitical rival India, with some Chinese groups saying projects in Southeast Asia and the Middle East remain unaffected. However, Beijing is also increasingly rolling out formal export restrictions on key technologies that apply worldwide.
“The strong supply chain and skilled workforce are some of the few benefits China still has,” says investor at one company facing the challenge of moving some technology engineers abroad. said. “I don’t want to lose it to another country.”
Last month, China’s Commerce Ministry proposed restrictions on exports of technologies related to lithium extraction and the production of advanced battery materials.
“China is building large export control muscles and is extremely cautious about what they choose to control,” says Antonia Humaidi, senior analyst at the Mercator Institute at the Chinese Institute. states. “Essentially, it’s about keeping China at the heart of the global supply chain,” she said.
Hmaidi said Beijing often targets areas near the top of the supply chain where Chinese groups control materials and technological processes while controlling the final product.
Cory Combs of Consultancy Trivium China said the interventions Beijing submitted to the battery supply chain represent “a new class of export control.”
China has a leading position in exporting technologies related to lithium extraction and manufacturing of advanced battery materials © WAN SC/Function China/Future Publications via Getty Images
If fully adopted, controls can prevent Chinese battery giants from moving their entire supply chain overseas at European factories. Groups such as CATL must continue to import battery materials such as advanced lithium lithium phosphate (LFP) cathodes from China, instead of being able to be produced or purchased locally, according to those who have explained the issue. It may be.
China’s breakthrough in LFP technology has replaced the South Korean and Japanese groups that once dominated the battery industry, supporting the rise in battery giants.
According to Benchmark Mineral Intelligence, the Korean group has caught up and launched an alliance and purchase of LFP cathodes from China.
New controls could threaten these transactions. A spokesman for a major South Korean battery producer said they had called for their company to be unnamed and communicated their concerns to China’s Ministry of Commerce.
“If the guidelines do not reflect our concerns, we cannot rule out any negative impacts on our partnerships with Chinese companies,” the person said.
Sam Adham, head of battery research at CRU Group, analytics firm, said: “Koreans need high-end Chinese technology, but (new export controls are required) may only be able to access last year’s technology, that is, things on the roads. At this time.”
An outlined curb on exports of lithium extraction technology can complicate the progress from the US to South America. A person close to CATL said the group would need to apply for an export license to extract lithium from the country’s salt flats using Chinese technology in a Bolivian $1.4 billion project.
Anna Ashton, founder of China-focused consulting consulting Ashton analysis, said the Chinese group has pioneered the technology to extract and process lithium rich brine from deep underground, achieving many new mining projects. Ta.
“Ironically, contracting with Chinese companies is now the most efficient way to provide non-Chinese lithium sources online,” she said.
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In strategic materials and minerals, Beijing gradually expands the curbs and limits the techniques used for extraction, purification and processing to include both the export of key elements such as rare earths, tungsten and tellurium. .
In December 2023, China expanded its control even further into the technology and processes that transform sophisticated rare earths into metals and permanent magnets used in electric vehicles, wind turbines and electronics.
“China manufactures something like 95% of the world’s permanent magnets,” he said, with employees in the US group building alternative supply chains.
“The net effect of these export controls is the reduction in industry diversification in some of these supply chains.”
China’s Commerce Ministry did not respond to a request for comment. Foxconn and Catl declined to comment.
Additional report by Gloria Lee of Hong Kong, Song Jong A of Seoul, Nian Liu of Beijing
