Hong Kong — The Chinese government has unveiled plans to impose new export restrictions on critical technologies used in the production of electric vehicle (EV) components, signaling a significant escalation in the ongoing technological competition with the United States. This development comes at a time of heightened tension as Washington prepares for the inauguration of President-elect Donald Trump.
According to a notice issued by the Ministry of Commerce on Thursday, Beijing intends to broaden its list of controlled exports to include battery cathode technology. This measure supplements existing restrictions targeting technologies involved in the extraction and processing of key minerals such as lithium and gallium. The proposal is currently open for public consultation but is widely expected to be implemented, potentially forming the basis for future rounds of export controls.
The official state-run Xinhua News Agency described the initiative as an effort to “strengthen technology import and export management.” The proposed restrictions, once in place, could have far-reaching implications for the global supply chains that underpin the manufacturing of semiconductors and EV batteries, industries critical to the future of sustainable transportation and electronics.
During a press briefing on Friday, Foreign Ministry spokesperson Mao Ning defended the plan, stating, “China implements fair, reasonable, and non-discriminatory export control measures.” However, these reassurances are unlikely to quell international concerns over the potential impact on global supply chains.
Strategic Dominance in Critical Materials
China’s move underscores its strategic dominance in the production and processing of vital materials such as lithium and gallium. Lithium, a core component in the manufacture of rechargeable batteries, is indispensable for devices ranging from smartphones and laptops to electric vehicles. Gallium, a soft metal, is widely used in the production of high-frequency chips essential for mobile communication and satellite technologies.
Adam Webb, head of battery raw materials at Benchmark Mineral Intelligence, emphasized the significance of the proposed measures. Speaking to Reuters, Webb noted that the new export restrictions could enable China to maintain its commanding 70% market share in global lithium processing. “This is a calculated move to secure the domestic supply chain for battery production, ensuring that China’s EV industry remains competitive,” he explained.
While an iPhone requires only a negligible amount of lithium, an electric vehicle battery demands approximately eight kilograms (18 pounds) of the metal. With global EV adoption accelerating, any restrictions on lithium-related technology could have profound consequences. The International Energy Agency has warned that current trends suggest the world will meet only 50% of the projected lithium demand by 2035, highlighting the critical role China plays in this sector.
Growing Demand for Lithium-Ion Batteries
The anticipated surge in lithium-ion battery demand reflects the broader transformation of the global energy landscape. A 2023 report by McKinsey projects that the number of gigawatt-hours required will rise from approximately 700 in 2022 to 4,700 by 2030. This explosive growth is being driven by the expanding adoption of EVs and renewable energy storage solutions, both of which rely heavily on advanced battery technologies.
China’s export controls come against the backdrop of earlier restrictions imposed on materials such as gallium and germanium, which are essential for semiconductor production. These measures, announced last month, were widely viewed as a direct response to the Biden administration’s decision to limit the sale of US-made semiconductors to China.
Expanding the Export Control List
In a related development, the Chinese Ministry of Commerce announced on Thursday the addition of 28 US companies and entities to its export control list. Among the targeted firms are major defense contractors Lockheed Martin and Raytheon Missiles & Defense. This list, akin to the US Commerce Department’s “Entity List,” serves to regulate the sale of dual-use technologies—products that have both civilian and military applications.
The intensifying tit-for-tat measures between Beijing and Washington reflect a broader struggle for technological supremacy. As China tightens its grip on the production and export of critical materials and technologies, the ripple effects are being felt across industries and borders. With demand for EVs and advanced electronics expected to skyrocket in the coming years, the strategic maneuvers by both nations will likely shape the trajectory of the global tech landscape for decades to come.
