As South Korean electric vehicle battery makers prepare for restrictions on graphite exports from China to take effect next month, analysts say Washington, Seoul and Tokyo should speed up pilot programs aimed at making supply chains more resilient.
Daniel Ikenson, director of trade, investment and innovation at the Asia Public Policy Institute, told VOA he believes the United States, South Korea and Japan have waited too long to create the proposed supply chain early warning system (EWS). .
Ikenson said the implementation of the EWS “should have been accelerated long before the United States began considering restrictions on the export of semiconductors and other high-tech products to China.”
On October 20, China’s Ministry of Commerce announced Beijing’s latest restrictions on the export of key raw materials for electric vehicle batteries, three days after Washington announced restrictions on sales of high-end semiconductors to China, including advanced artificial intelligence chips from US chipmaker Nvidia.
The Commerce Department said the sales were blocked because China could use the chips to advance its military developments.
Previously, China, from August 1, limited the export of gallium and germanium, which are used for the production of semiconductors.
“These new restrictions are clearly designed by China to show that they could slow down U.S. progress on clean electric vehicles,” said Troy Stangarone, senior director of the Korea Economic Research Institute.
Washington, Seoul and Tokyo agreed at the Camp David summit in August that they would launch an EWS pilot project to identify over-reliance on one country in critical projects, including critical minerals and batteries, and share information to minimize disruptions. supply chain.
The three countries also agreed to create “complementary mechanisms” through the Indo-Pacific Economic Prosperity Framework (IPEF) to improve supply chain resilience.
The Biden administration launched IPEF in May 2022. The cooperation framework is seen as an attempt by 14 member countries, including the US, South Korea and Japan, to counter China’s economic influence in the region.
Regarding export controls, Chinese Embassy spokesman Liu Pengyu said that the Chinese government generally regulates export controls in accordance with the law and does not target any specific country or region or any specific incident.
He also said China is always committed to ensuring the security and stability of global industrial and supply chains and will provide export licenses that comply with relevant regulations.
He added that “China is a builder, co-creator and maintainer of stable and uninterrupted global industrial and supply chains” and is “willing to work with global partners to adhere to true multilateralism and maintain the stability of global industrial and supply chains.”
South Korean electric vehicle battery makers have been scrambling to stockpile as much graphite as possible since Beijing announced restrictions on graphite. Global supplies are expected to decline as Beijing requires Chinese exporters to obtain licenses starting in December.
South Korea relies heavily on China for the production of graphite used in electric vehicle battery anodes (the negatively charged part of the battery). From January to September this year, more than 90% of South Korea’s graphite imports came from China.
Han Koo Yeo, who served as South Korea’s trade minister from 2021 to 2022 and was an early participant in the development of the IPEF, said Beijing’s latest export curbs would be a “big wake-up call” for countries such as South Korea, Japan and China. South Korea”. The United States and a small number of countries rely on graphite from China.
Meanwhile, Yang told VOA Korean that the cap is a “perfect example” of why the pilot program should be accelerated.
“The main thing is how to cope with this moment of crisis.” Although it hasn’t turned into big chaos yet, “the market is very nervous, companies are also worried, and the uncertainty is quite large,” said Yang, now a senior. researcher. Peterson Institute for International Economics.
He said South Korea, Japan and the United States should identify vulnerabilities in their supply chain networks and promote the private government cooperation needed to support the trilateral structure the three countries will create.
Yang added that under this program, Washington, Seoul and Tokyo should exchange information, seek alternative sources to diversify away from dependence on one country, and speed up the development of new alternative technologies.
He said that the remaining 11 IPEF countries should do the same and cooperate within the IPEF framework.
Once a supply chain resilience framework is in place, he said, “it’s important to put it into action.”
The U.S. State Department on Wednesday announced the creation of the Critical Energy Security and Transformational Minerals Investment Network, a new public-private partnership with the Office of the Currency Office’s Critical Minerals Strategy Center to promote investments in critical minerals supply chains.
SAFE is a nonpartisan organization that advocates for safe, sustainable and sustainable energy solutions.
On Wednesday, the Biden administration also called for a seventh round of IPEF talks to be held in San Francisco from Nov. 5 to 12 ahead of the Asia-Pacific Economic Cooperation summit on Nov. 14, according to the Office of the U.S. Trade Representative.
“The supply chain component of the Indo-Pacific economic system is largely complete and its terms should be more widely understood after the APEC summit in San Francisco,” said Ikenson of the Asia Society at Camp David. “
Ikenson added: “China will do everything it can to reduce the cost of export controls by the United States and its allies. But Beijing knows that in the long term, Washington, Seoul, Tokyo and Brussels will double investment in global upstream production and refining. if you apply too much pressure, it will destroy their business.”
Gene Berdichevsky, co-founder and CEO of Alameda, Calif.-based Sila Nanotechnologies, said China’s restrictions on graphite exports could accelerate the development and use of silicon to replace graphite as a key ingredient in making battery anodes. In Moses Lake, Washington.
”China’s action highlights the fragility of the current supply chain and the need for alternatives,” Berdichevsky told VOA’s Korean correspondent. market signals and additional policy support.”
Berdichevsky added that automakers are rapidly moving to silicon in their electric vehicle battery supply chains, in part due to the high performance of silicon anodes. Silicon anodes charge faster.
Stangarone of the Korea Economic Research Institute said: “China needs to maintain market confidence to prevent companies from looking for alternative supplies. Otherwise, it will encourage Chinese suppliers to leave faster.”
Post time: Aug-28-2024