Chinese President Xi Jinping has urged countries to reject the notion of decoupling and cutting supply chains, just a day after China imposed export controls on two crucial metals used in chip manufacturing. Xi made this statement during a virtual speech to leaders of the Shanghai Cooperation Organization. He emphasized the importance of expanding win-win cooperation and ensuring fair distribution of development gains worldwide.
This statement by Xi contradicts China's recent decision to subject gallium and germanium, as well as their chemical compounds, to export controls. The move was justified by the Chinese Ministry of Commerce as a national security measure. Meanwhile, analysts believe that this export control is just the beginning, and China may further escalate countermeasures if the US imposes additional restrictions on Chinese technology.
According to Wei Jianguo, a former vice minister of commerce in China, these export controls will have a significant impact on certain countries. He mentioned that this move by China, which coincided with US Treasury Secretary Janet Yellen's upcoming visit to Beijing, could accelerate efforts by countries to reduce dependence on the Chinese economy.
The US has been increasingly aggressive in its measures to curb China's technological ambitions, particularly due to concerns about military advancements. The US has also sought to convince its European and Asian allies to align with its stance. In line with this, the US is reportedly planning to restrict Chinese companies' access to cloud-computing services provided by Amazon and Microsoft.
China has previously voiced its concerns about countries decoupling or de-risking from its economy. Premier Li Qiang recently warned that politicizing economies will only lead to a fragmented world. In response to these concerns, China's Minister of Commerce, Wang Wentao, met with former Japanese Foreign Minister Yohei Kono to discuss ensuring stable supply chains between the two nations.
This signals China's broader efforts to counter any moves to reduce reliance on its economy. As tensions continue to rise between China and the US, the impact on global supply chains and the broader geopolitical landscape remains uncertain.