China Tightens Curbs On Graphite Exports Citing 'National Security'

China announced on Friday new curbs on exports of certain types of graphite, key to making batteries for electric vehicles, days after the United States slapped fresh restrictions on outflows of high-tech microchips.

Washington said this week it would ramp up restrictions on exports of cutting-edge semiconductors crucial for powering artificial intelligence systems -- its latest effort to curb Beijing's access to advanced tech.

China has branded Washington's policy unfair and has imposed its own measures, declaring in July that certain products containing gallium and germanium -- key raw materials for chipmaking -- would be subject to stricter export controls.

And under measures unveiled Friday by the Ministry of Commerce, exporters must apply for permits to sell two types of graphite to foreign customers.

"Based on the need to uphold its national security and interests, China has implemented export controls on certain graphite items in accordance with the law," the ministry said.

Graphite is commonly used to make lithium-ion batteries for mobile phones, electric vehicles (EVs) and other products.

China was the world's leading graphite producer last year, accounting for an estimated 65 percent of total production, according to the United States Geological Survey.

The export controls will include high-purity, high-strength and high-density graphite material; and natural flake graphite.

Three further kinds of "highly sensitive" graphite materials included in the list were already under temporary curbs, according to the announcement.

Global graphite consumption is expected to soar as demand continues to grow for EVs and the batteries that power them.

The commerce ministry said the move was "conducive to better implementing our international anti-proliferation and other obligations, (and) safeguarding the stability of global industrial supply chains".

"Recently, the Chinese government has... taken the decision to make optimisations and adjustments to (graphite) inflows and outflows," it said.

"China's normal adjustment of export controls does not target any specific country or region, and exports that comply with the relevant regulations will receive permission," it said.

Daniel Kollar, the Shanghai-based Head of Intralink's Automotive and Mobility Practice, told AFP "this is arguably the most effective way for China to influence the battery market, since almost all lithium-ion batteries rely on graphite anodes and China controls the lion's share of the global market".

"If strictly enforced, China's export controls will help maintain and potentially grow the country's position in the battery space... leaving other countries' battery companies at a disadvantage until alternate graphite sources can be found," Kollar said.

"It lays bare the fact that US and EU electrification plans are endangered if there is no derisked battery supply chain."

Trade and technology have been at the centre of simmering tensions between Beijing and Washington in recent years.

The European Union has also signalled that it is seeking to reduce its reliance on trade with China in technology and other areas.

It launched a probe this month into Beijing's subsidies for homegrown EV makers after accusations that their cheap products undercut European competitors.

The bloc is also mulling a separate investigation into Chinese support for its manufacturers of wind turbines.

Beijing has expressed "strong dissatisfaction" with the EV probe and denied that its backing for other industries is unfair.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)