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This week, the State Council Information Office of China released the country’s first white paper “China’s Export Control”. Officials said that the move was in response to the signs of “small circles” in international export control and the challenges brought about by the rise of unilateralism.
The white paper released on Wednesday (December 29) stated that export control refers to dual-use items, military products, nuclear products, and other goods, technologies, services and other items related to safeguarding national security and interests and fulfilling international obligations such as non-proliferation. For export, prohibition or restrictive measures shall be adopted.
The above-mentioned “dual-use items” refer to goods, technologies, and services that have both civil and military purposes or that can help enhance military potential.
Regarding the export of nuclear technology, the white paper specifically pointed out that nuclear exports are exclusively operated by units designated by the State Council of China, and resolutely implement nuclear exports “guarantee that they are only used for peaceful purposes, are subject to IAEA safeguards, and cannot be transferred to third countries without the permission of the Chinese government. And other three principles”. The administrative department implements a strict review system for nuclear exports and imposes severe penalties on violations of the law.
“Export Control Circle”
White papers are generally issued by the government. They usually refer to important documents bound with white covers to explain the government’s position in a certain field over a long period of time.
The 9,000-word white paper mentioned the United States many times in the chapter on bilateral cooperation. For example, “China and the United States have held several seminars on the identification of export-controlled items to enhance the exchange of law enforcement technology.”
For another example, “In the nuclear field, China maintains consultations and exchanges with the United States, Russia, the United Kingdom, France, Germany, and EU institutions, and jointly combats illegal activities through information exchange and law enforcement cooperation in accordance with the law.”
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However, the relevant person in charge of the Ministry of Commerce of China issued a document explaining that currently, international export control is also facing some challenges. There have been abuses of export control measures and unreasonable implementation of discriminatory restrictive measures. The international coordination and cooperation on export control needs to be further strengthened.
The white paper “China’s Export Control” is China’s second major move in this field. The last big move was a year ago, when the Standing Committee of China’s 13th National People’s Congress voted to pass the “Export Control Law.” The law clearly stipulates that for any country or region that abuses export control measures to endanger China’s national security and interests, China can take reciprocal measures based on actual conditions.
This move is considered to lay a legal foundation for “torn for tooth” retaliation against the United States.
Alex Capri, a visiting professor at the National University of Singapore, previously stated that China’s move is a response to the escalating Sino-US technology war, and China hopes to protect its own advantages.
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China’s rare earth reserves rank first in the world. Chinese media reported that 90% of China’s rare earth reserves are concentrated in the Bayan Obo rare earth mine in Inner Mongolia.
Artificial Intelligence and Rare Earth
The Export Control Law allows penalties for overseas organizations or individuals, which suggests that Beijing may be trying to use it to restrict the sale of sensitive technologies around the world.
Capri also pointed out, “I found another very interesting thing: China’s export controls also include artificial intelligence and algorithms.”
“This is triggered by the US ban on TikTok, and the Chinese government does not want to share this artificial intelligence.”
In addition, the publication of the export control white paper may have an impact on China’s rare earth exports. When the “Export Control Law” was promulgated a year ago, the price of rare earths ushered in a wave of increases.
China is the world‘s largest supplier of rare earths. Rare earths are used in everything from consumer electronics such as smartphones to wind turbines.
CITIC Securities Research pointed out that with the introduction and entry into force of regulatory laws and regulations, China’s export supply of rare earths may be further reduced. As the global market is highly dependent on China’s rare earths, the global supply of rare earths may shrink further after the implementation of export controls, which is expected to boost the price of rare earths to continue to rise.