Chinese economyEU-China relations

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published: 8.08.2024

Report: Keeping value chains at home

A year ago, in August 2023, China began requiring licenses for exports of gallium and germanium metals and several of their compounds. The move was widely seen as a response to restrictions on semiconductor technology exports from the United States and other countries. However, such steps should not merely be seen as tit-for-tat retaliation, as MERICS experts Rebecca Arcesati, François Chimits and Antonia Hmaidi point out in their latest MERICS Report titled “Keeping value chains at home: How China controls foreign access to technology and what it means for Europe”.

The MERICS experts argue that the measures are part of a long-term effort to protect China’s industrial and innovation interests: “After decades of chasing foreign technology, the Chinese government is now intent on managing technology-related outflows and limit foreign access to favor domestic champions while hindering Western de-risking,” they write.

China’s export controls affect technology supply chains of huge economic and strategic importance for Europe. Our experts dissect the party state’s toolkit and explain how it is applied in several case studies.