China plans to tighten export controls on battery materials technology as Beijing seeks to maintain control of a critical supply chain amid rising global trade tensions.
The government has proposed adding a variety of technologies, some of which are used to lithium refining and battery chemical production are on the list of items subject to export controls, according to a Commerce Department notice sent Thursday for public comment.
The plan appears to be aimed at protecting innovations that China has developed during its rise to dominance in global battery and electric vehicle manufacturing. It comes amid growing competition with the United States in everything from critical minerals to semiconductors.
“This shows that the government understands the importance of keeping these advanced lithium technologies secret,” said Yu Yakun, an analyst at Cofco Futures Co. . “Overseas investment in such technologies will be subject to greater scrutiny.”
The proposed restrictions target a range of processes used to produce lithium battery chemicals, including direct lithium extraction, a new method in which China has significant experience. They also cover some specific types of chemistries used in the production of cathodes, which are critical to battery performance.
The latest move is still subject to public feedback and subject to change, but it has forced battery companies in China and the rest of Asia is having a hard time understanding the potential consequences. The focus is on what tighter controls could mean for China's growing overseas investment in the battery supply chain, especially in the case of joint ventures with foreign companies.