China plans to impose restrictions on the export of graphite, a mineral from the class of native elements, the importance of which in the sphere of production of batteries for electric vehicles is critical.
The relevant intentions of this Asian country were reported by the local Ministry of Commerce and the General Administration of Customs. The official reason for this decision was called national security considerations.
The announcement of the plan to restrict graphite exports came a few days after Washington expanded the list of semiconductors that are prohibited from being supplied to Chinese manufacturers by American companies.
Stefan Legge, head of the Tax and Trade Policy Research Department at the University of St. Gallen in Switzerland, says that at the current stage of the trade and industrial confrontation between Beijing and the West, there is what can be called the principle of reciprocity in terms of the sensitivity of the measures applied to each other. According to the expert, both sides, within the framework of the current situation, are acting based on a protectionism strategy.
Stefan Legge also stated that in this context it is appropriate to mention Newton’s Third Law, according to which every action causes a reaction. He also noted that China and the West are aware of the consequences of the escalation of the situation to the point when geopolitical considerations outweigh economic expediency.
Currently, Beijing dominates the sphere of global graphite production and processing. Since December, China has been introducing mandatory permits for the export of synthetic graphite material, including high-frequency, high-strength, and high-density materials. The new regulations also apply to natural flake graphite.
The Energy Research Institute, based in Washington, DC, reported that automakers are trying to limit the supply of the said mineral from sources outside China since its use for manufacturing batteries for electric vehicles is ahead of other types of applying material.
According to the US Geological Survey, the global market for graphite used in batteries has grown by 250% since 2018. Last year, China’s share in the global production of this material was 65%.
The decision concerning the supply of graphite is not the first measure of Beijing in the framework of the aforementioned confrontation with the West. In the summer, China restricted exports of gallium and germanium, which are necessary for the production of semiconductors.