Have you ever heard of gallium or germanium? They are metals, but not in common use like for example, iron, copper or aluminium. The two metals are small in terms of global markets and therefore called minor metals. But the two substances are critical to many modern technologies.
Chinese authorities announced strict new export controls on gallium and germanium at the start of July this year. With this geopolitical move China is exploiting a critical weakness in the West that might have severe consequences.
Gallium, despite its small primary market as a refined metal, is essential to manufacture advanced computer chips, for example utilized in radar systems, solar panels, light-emitting diodes (LEDs) just to name a few. Germanium is also used in high-tech systems like integrated circuits, chips, fibre optic cable, and high-performance solar cells, which are used in space satellites. Gallium and germanium are essential foundation metals for many high-tech applications.
The Chinese are using this move as leverage. While the two metals have small markets, their multiple uses involve hundreds of billions of dollars in terms of end products, including advanced military equipment. Stop gallium and germanium, and it sets back technology for decades.
Clearly, with their new export restrictions, the Chinese government knows exactly what its doing and is doing it very carefully, with evident deliberation. This new type of export-control is just the start of things coming. China is responding to sanctions from the West, such as restricting sales of advanced computer chips, chip fabrication equipment, and much else.
But why has China this kind of power over gallium and germanium? China controls about 80% of global gallium and about 60% of global germanium output. China makes China the only key player. These restrictions are intended to constrict and disrupt global trade in these two minor metals.