China has announced a ban on exporting critical raw materials such as gallium and germanium to the United States following heightened U.S. pressure on China’s chip industry. This move escalates tensions between the world’s two largest economies and risks further disruptions to global supply chains.

China’s Ministry of Commerce stated on Tuesday that it has tightened export controls on dual-use materials to the U.S., citing the need to “protect national security and interests.” The export of gallium, germanium, antimony, and other superhard materials to the U.S. is now prohibited in principle, according to the ministry’s statement.

This decision comes just hours after the Biden administration imposed its most extensive export controls yet, blacklisting 140 Chinese organizations, including prominent players in the country’s chip-making sector.

The restricted materials—gallium, germanium, antimony, and graphite—are considered “dual-use,” meaning they serve both civilian and military applications. These materials are critical for manufacturing semiconductors, electric vehicles, power systems, and other high-tech equipment.

The U.S. previously identified graphite and gallium as strategic materials in its 2021 supply chain review, highlighting the risks posed by their production being concentrated in China. Notably, China dominates global production of natural graphite, a key component in battery manufacturing.

China’s Ministry of Commerce also stated that no dual-use products would be exported for U.S. military purposes or to U.S. military organizations. This follows a detailed list published last month identifying materials such as tungsten, magnesium, and titanium as subject to strict export controls.

China’s latest restrictions are part of a broader response to what it perceives as the U.S. “weaponizing” export controls. A Ministry of Commerce spokesperson criticized the U.S. for violating international trade rules, harming bilateral interests, and destabilizing global supply chains. The spokesperson warned that any individual or organization violating these export rules would face legal consequences.

In a further sign of growing tension, major Chinese industry associations, including the China Association of Automobile Manufacturers and the China Internet Society, have urged members to exercise caution when procuring U.S. chips. These organizations described American chips as “no longer reliable or safe,” citing arbitrary changes to U.S. trade control measures that disrupt stable supply chains.

China is carefully analyzing how Russia navigates Western sanctions and is proactively developing strategies to safeguard its economy in the event of a Taiwan-related crisis. Maintaining substantial foreign exchange reserves and achieving technological independence are central pillars of these efforts.

China is not only supporting Russia in weathering the sanctions and sustaining critical economic sectors but is also extracting valuable lessons from the process.

According to The Wall Street Journal (WSJ), Beijing established an inter-agency working group immediately after the war in Ukraine began. This task force systematically examines the impact of sanctions on Russia and regularly reports its findings to China’s leadership. The primary objective is to mitigate the potential fallout from similar sanctions, should the U.S. and its allies target China during a Taiwan crisis.

In this context, Chinese officials frequently visit Moscow to engage with key Russian institutions, including the Russian Central Bank and the Ministry of Finance. According to a source familiar with the matter, Beijing is “interested in every detail, from ways to circumvent sanctions to incentives for boosting domestic production.”

The working group is led by He Lifeng, Vice-Premier for Economic and Financial Affairs, who maintains direct contact with President Xi Jinping. He Lifeng is regarded as a pivotal figure in formulating strategies to insulate the Chinese economy from potential Western sanctions.

Alexander Gabuev, director of the Carnegie Berlin Centre for Russian and Eurasian Studies, remarked, “Russia is a real testing ground for China, where it can learn how sanctions work and how to deal with them. If there is a crisis over Taiwan, China knows it will face a similar wave of sanctions.”

Taiwan scenario and lessons from Russia

According to WSJ, China’s current actions do not necessarily indicate preparation for an imminent military intervention in Taiwan. However, the leadership is bracing for the worst-case scenario, including armed conflict and its associated economic consequences.

The Taiwan issue is often compared to the Ukraine crisis. During the 20th Communist Party Congress in October 2023, President Xi Jinping emphasized nationalism as a cornerstone of foreign policy amid escalating tensions with the United States and Taiwan.

One of the most significant blows to Russia at the onset of the Ukraine war was the freezing of its foreign exchange reserves by Western nations. Some of these reserves were later redirected to support Ukraine. This incident underscores why maintaining China’s foreign exchange reserves—estimated at over $3.3 trillion—is a critical priority.

To ensure their resilience, Xi Jinping personally reviewed reserve management practices during a visit to the State Administration of Foreign Exchange in late 2023.

Trade between Russia and China has surged during the conflict, reaching $240 billion in 2023. However, this trade relationship remains asymmetrical: China represents a third of Russia’s foreign trade, while Russia constitutes a smaller portion of China’s overall trade. Moreover, Russia’s exports to China primarily consist of raw materials, while China supplies Russia with a diverse range of products, including technology, machinery, and equipment.

Russia’s pre-war efforts to reduce its dependency on the U.S. dollar and bolster its gold reserves offer additional lessons for China. Beijing is taking note of the severe repercussions that sanctions can have on industries integrated into the global supply chain.

Edward Fishman, a former sanctions expert at the U.S. State Department emphasized that such sanctions could devastate manufacturing sectors reliant on international networks. This risk has driven China’s renewed focus on economic self-sufficiency and technological autonomy, which aligns with Beijing’s broader strategic goals.

The United States has recommended that Ukraine lower its military conscription age from 25 to 18, alongside implementing additional mobilization measures to address the shortage of troops. This proposal aims to strengthen Ukraine’s operational capacity and address the manpower deficit on the battlefield.

The administration of U.S. President Joe Biden has urged Ukraine to reconsider its conscription policies to expand the size of its armed forces.

According to the Associated Press, citing an anonymous White House source, Washington is advocating for reducing the age of conscription from the current 25 to 18.

U.S. officials argue that this change would increase Ukraine’s mobilization reserves, enabling faster replenishment of the army. The source emphasized that the current battlefield conditions demand an urgent increase in troop numbers, suggesting that Ukraine’s current mobilization and training efforts are insufficient.

A White House representative stated that Ukrainian estimates indicate the need for approximately 160,000 new recruits, but Washington believes this figure should be significantly higher.

The representative further noted that the Russian army continues its advance in eastern Ukraine and intensifies pressure on Ukrainian forces in the Kursk oblast. Additional mobilization efforts and an increase in manpower could potentially shift the balance of the war, according to the U.S. administration.

In addition to suggesting a lower conscription age, Washington is proposing stricter measures against deserters, which, it believes, would lead to more efficient use of Ukraine’s military resources.

A separate Associated Press report, citing European officials, revealed that Western European allies have also expressed concerns to Ukrainian President Volodymyr Zelensky regarding the army’s personnel challenges.

According to these allies, the shortage of troops remains a critical factor hindering Ukraine’s ability to conduct operations on multiple fronts, including in Russia’s Kursk region. Officials pointed out that the primary issue is not a lack of weapons but insufficient manpower.