Beijing is tightening control over state-of-the-art Chinese technology, aiming to maintain a critical knowledge range as trade tensions with the United States and Europe escalate.
According to multiple industry digital and ministry notices, Chinese authorities have made it harder for certain engineers and equipment to leave the country in recent months, proposed new export controls to retain critical battery technology and turn to restrict handling of critical mines The technology of matter.
In the U.S. President Donald Trump and the country’s maintenance of leading technology compared to Europe, this has the potential to stimulate more local and foreign groups to move production elsewhere.
Among Apple’s main manufacturing partner, Foxconn, is the one that is going to be hit, which has been bringing the supply chain diversification of the Silicon Valley group to India.
People familiar with the matter say Chinese officials make it difficult for Taiwanese-owned contract manufacturers to send machinery and technology Chinese technology managers to India, and Apple is eager to build its supply chain.
A manager at a Taiwanese electronics company said they also faced a challenge to bring certain equipment out of China from India’s factory, although he pointed out that shipments to Southeast Asia are still normal.
China is using customs delays to hinder the flow of components and equipment traveling south, an Indian official said. “Having been told to build manufacturing and assembly operations in India,” the official said, stating that he would not be named. Media websites reported some issues about Foxconn earlier.
Analysts say Beijing’s emerging script is similar to the Western technology transfer restrictions it criticized loudly. Informal control measures are particularly targeting China’s geopolitical rival India, and some Chinese groups say projects in Southeast Asia and the Middle East are still unaffected. However, Beijing is increasingly formally restricting exports of key technologies applicable to the world.
“A strong supply chain and skilled workforce are some of the few advantages China still has,” said an investor in a company facing the migration of some technical engineers abroad. “You don’t want to lose it to other countries.”
China’s Ministry of Commerce last month proposed restrictions on exports of technologies related to lithium extraction and manufacturing of advanced battery materials, both regions leading the way.
“China is building a lot of export control muscles and has made a very intentional attitude in what they choose to control,” said Antonia Hmaidi, senior analyst at the Mercator China Institute. “Basically, it’s about making it happen,” she said. China maintains the core of global supply chains.”
Beijing often targets areas near the top of the supply chain, with Chinese groups controlling the materials and technical processes while the final product is out of control, Hmaidi said.
Cory Combs of Chinese consulting firm Trivium said Beijing’s interventions proposed in the battery supply chain represent “new export controls.”
If fully adopted, these controls could prevent China’s battery giant from moving its entire supply chain abroad in its European factories. According to the briefing on the matter, groups such as CATL may need to continue importing battery materials, such as China’s advanced lithium phosphate (LFP) cathodes, rather than being able to produce or purchase them locally.
China’s breakthrough in LFP technology laid the foundation for the rise of battery giants, replacing the South Korean and Japanese groups that once dominated the battery industry.
South Korean groups are trying to catch up, which have begun collaborating and buying Chinese LFP cathodes, producing 99% of all LFP cathode active materials last year, according to Benchmark Mineral Intelligence.
New controls may threaten these transactions. A spokesman for a leading Korean battery manufacturer asked their company to be named, saying they had communicated their concerns to China’s Ministry of Commerce.
“If the guidelines do not reflect our concerns, we cannot rule out the adverse effects of our partnership with Chinese companies,” the person said.
“Koreans need high-end Chinese technology, but [with the new export controls] They may only have access to last year’s technology, i.e. the current road. ”
Overview of Export Lithium Extraction Technology Curbs may complicate development from the United States to South America. A person close to CATL said the group needs to apply for an export license in Bolivia’s $1.4 billion project to use Chinese technology to extract lithium from the country’s salt platform.
Anna Ashton, founder of China’s consulting firm Ashton Analytics, said Chinese groups were the first to extract technology to extract and process lithium-rich brine from deep underground, making many new mining projects feasible.
“Ironically, signing a contract with a Chinese company is the most effective method at present, which will provide non-China mining and processing lithium online,” she said.
Among strategic materials and minerals, Beijing has gradually expanded its curbs, including controlling the export of key elements (such as rare earths, tungsten and Tyrell, etc.), and also restricts technologies for extraction, refining or processing.
In December 2023, China further expanded controls to the technology and process of turning refined rare earths into metal and permanent magnets for electric vehicles, wind turbines and electronic products.
“China produces about 95% of the world’s permanent magnets,” said the employee of the U.S. Group’s establishment of alternative supply chains.
“The net effect of these export controls is that industrial diversification in some of these supply chains is limited.”
China’s Ministry of Commerce did not respond to a request for comment. Foxconn and CATL declined to comment.
Other reports by Gloria Li in Hong Kong
