Issue with China’s Export Restrictions

Source: The post issue with China’s export restrictions has been created, based on the article “China’s warning shots with minerals that run the world” published in “The Hindu” on 26th September is 2024

UPSC Syllabus Topic: GS Paper 2- International Relations-Effect of policies and politics of developed and developing countries on India’s interests.

Context: The article discusses China’s decision to restrict exports of critical minerals like antimony, used in defense technologies. This move highlights China’s dominance in the global mineral supply chain, which poses security risks for countries like India, Japan, and the U.S.

For detailed information on China’s Export Restrictions read Article 1, Article 2

What is the Issue with China’s Export Restrictions?

1. Export Restrictions on Antimony: China announced restrictions on antimony exports, effective from September 15, citing national security concerns. Antimony is vital in defense sectors for military equipment like missiles and nuclear weapons.
2. Global Impact: China controls 60% of global rare earth production, 60% of critical minerals production, and 80% of processing. Its decisions can significantly affect countries reliant on these minerals, such as the U.S., Japan, and India.
3. Past Examples: In 2010, China stopped exporting rare earths to Japan following a maritime incident, showcasing its willingness to use mineral exports as a political weapon.
4. Recent Moves: In 2023, China restricted exports of gallium, germanium, and synthetic graphite after U.S. and Dutch export controls on semiconductor equipment, intensifying trade tensions.

How does China’s strategy affect the West?

1. Restrictions on minerals like gallium, germanium, and graphite affect Western industries relying on these for technologies like solar cells, computer chips, and EV batteries.
2. China’s curbs hinder the U.S.’s development of high-tech sectors, such as Virginia class submarines and F-35 fighter jets, which require rare earth elements.
3. As U.S.-China ties worsen, China’s export controls will likely grow, further complicating Western supply chains and technological advancements.

How is India Affected?

1. India is heavily reliant on importing critical minerals like lithium, nickel, cobalt, and copper, essential for its industries.
2. In FY23, India spent around ₹34,000 crore on these mineral imports.
3. China’s restrictions on minerals, such as antimony, increase India’s vulnerability, as China dominates the global supply chain.
4. With India’s demand for critical minerals rising, import costs will likely grow, worsening its strategic dependence on China.
5. The lack of alternative supply chains poses a risk, making India susceptible to geopolitical pressures.

Question for practice:

Examine how China’s export restrictions on critical minerals like antimony impact India’s strategic dependence and vulnerability in the global supply chain.