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China tightens grip on tech, minerals and engineers as trade war spirals

Beijing tightens its grip on advanced Chinese technology, aiming to maintain critical knowledge within its borders with the escalation of trade tensions with the United States and Europe.

In recent months, the Chinese authorities have suggested that some engineers and equipment leave the country, and have proposed new export controls to retain the main battery technologies, and moved to critical metal treatment techniques, according to the multiple industry numbers and ministry notifications.

The country’s protection of leading technologies comes amid an additional tariff from US President Donald Trump and trade with Europe on cars, which threatens to motivate more local and foreign groups to move production elsewhere.

Among the companies that will strike the main manufacturer of Apple Foxconn, which leads the diversification of the supply chain in the Silicon Valley Group collection In India.

People familiar with the matter said that Chinese officials have made it difficult for the manufacturer of the Taiwanese contracts to send the Chinese technical machines and managers to India, where Apple is keen to build its supply chain.

Another Taiwanese electronics company said they are also facing challenges to send some equipment out of China to plants in India, although he indicated that shipments to Southeast Asia have remained normal.

An Indian official claimed that China was using customs delay to hinder the flow of ingredients and equipment heading in the south. The official said, “The electronic industry supplies were informed of not creating manufacturing and assembly operations in India,” the official said. The media site for the rest of the world earlier about some Foxconn issues.

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Foxconn India. Apple is keen to build its supply chain in the country © Karen Das/Bloomberg

Analysts say that the emerging playing book in Beijing is like the restrictions of the transfer of Western technology that it criticized loudly as unfair. Unofficial controls appear in particular to target geopolitical India in China, where some Chinese groups say that projects in Southeast Asia and the Middle East are still not affected. But Beijing is also increasingly the official export restrictions on the main technologies that apply all over the world.

“The strong supply chain and the skilled workforce are some of the few advantages that China is still these days,” said an investor in one of the companies facing problems in the transfer of some technical engineers abroad. “You don’t want to lose it in front of other countries.”

Last month, the Chinese Ministry of Commerce proposed restrictions on the export of technologies related to the extraction of lithium and the manufacture of advanced battery materials, and both fields, where the country has a pioneering situation.

“China builds a large muscle to control exports and is completely deliberate as they choose to control it,” said Antonia Hamidi, chief analyst at the Chinese Studies Institute. “It is mainly related to preserving the central China of global supply chains,” she said.

Hammadi said that Beijing was often targeting areas near the top of the supply chain, as Chinese groups controlled technological materials and processes, while leaving the final products not subject to control.

Cory Combs at Consultance Trivium China said that Beijing’s interventions in the battery supply chain represent a new category of export control. “

A woman working in a factory producing lithium batteries in Hawaii in central China
China has a pioneering position in exporting technologies related to lithium extraction and making advanced battery materials © Wan SC/China feature/future publishing via Getty Images

If adopted entirely, controls can prevent battery giants in China with factories in Europe from transferring the entire supply chain abroad. Catl groups such as CATL may need to continue to import battery materials such as the advanced Lathium iron phosphate (LFP) from China instead of being able to produce them locally or buy them locally, according to a person in this regard.

The Chinese breakthroughs in LFP have prompted the rise of the battery giants, which led to the displacement of the South Korean and Japanese groups, which took control of the batteries industry one day.

In an attempt to catch up with the Korean groups, the Korean groups began to buy and buy LFP Cathodes from China, which last year produced 99 percent of all active materials in the LFP Cathode, according to mineral minerals.

New controls can threaten these deals. A spokesman for the leading Korean battery producer, who requested not to name their company, said that they had informed their concerns to the Chinese Ministry of Commerce.

The person said: “We cannot exclude some harmful effects on our partnership with a Chinese company if the instructions do not reflect our fears.”

“The Koreans need high -end Chinese technology, but [with the new export controls] They may only be able to reach the technologies of last year – that is, what is on the current time. “

The limited restrictions on the export of lithium extraction technology can complicate the developments taking place from the United States to South America. A person close to Catl said that the group will need to apply for export licenses to use Chinese technology in a $ 1.4 billion project in Bolivia to extract lithium from salt apartments in the country.

Anna Ashton, the China Foundation, which focused on the Ashton Analytics, said that Chinese groups were a pioneer in technology to extract and process the rich -lithium -reserved mourning of the dete underground, making many new mining projects.

She said: “It is irony that contracting with Chinese companies is currently the most effective means to bring non -Chinese sources to the luminous lithium and online processing.”

In strategic materials and minerals, Beijing gradually expanded its restrictions to include all of the dominant exports of the main elements – such as the rare land, Tingin and Tylaorium, among other things – to restrict the techniques used to extract, improve or process.

In December 2023, China sought the controls further, to technology and processes that convert rare land refined land into permanent minerals and magnets used in electric cars, wind turbines and electronics.

“China manufactures approximately 95 percent of the world’s permanent magnet,” said an employee of an American group that builds an alternative supply chain.

“The pure effect of these export controls is that industrial diversification in some of these supply chains is reduced.”

The China Ministry of Commerce did not respond to the request for suspension. Foxconn and Catl refused to comment.

Additional reports by Gloria Lee in Hong Kong, Song Yong A in Seoul, Nian Liu in Beijing

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2025-02-16 03:00:00

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