As a result of imposing curbs on foreign sales of certain drones, China's decision to control exports of two metals necessary to making semiconductors - gallium and germanium - went into effect on Tuesday.

China has done so in response to the Biden administration's decision to restrict access by Chinese companies to the most advanced semiconductors - which China is aiming to become self-sufficient in. 

Those measures, according to a directive from the Chinese Ministry of Commerce, are aimed at maintaining US supremacy in the sector. 

Chinese companies wanting to export gallium or germanium will now need a license to do so, in addition to providing information on the destination recipient and details about their end-use.  

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A report by the European Union released this year shows that China accounts for 94% of the world's production of gallium which is used in integrated circuits, LEDs, and photovoltaic panels. It comprises of 83% of germanium production which is used in fiber optics and infrared. 

Analyst James Kennedy told AFP that the measure which holds "an unambiguous message" to the US "send[s] a clear signal that China holds all of the power in this dangerous game" adding: "If the US chooses further escalation, China's next response will have consequences."  

In the meantime, China "aims to cause a minimum of damage" to the US as a result of their "low" needs in gallium and germanium,  which can be acquired elsewhere. 

Chinese drones in the Ukraine war?

Exports of certain types of unmanned aerial vehicles, also known as drones or UAVs, have also been curbed. Exporters will also require a license explaining end-use and other details before being sold overseas but this will take effect on September 1.

The measure, a China commerce ministry spokesperson explains, was not aimed at "any specific country or territory", but the risk of drones "being converted for military use" was cited as a justification. 

China is a famous drone exporter, with the US-blacklisted drone firm DJI making up more than 70% of the global market share, according to CNBC. Reportedly, DJI drones are allegedly being used extensively by both Russia and Ukraine in the war in Ukraine.

Back in April 2022, the company claimed it was temporarily suspending business in both Russia and Ukraine until it finishes "internally reassess(ing) compliance requirements".    

In May this year, US sanctions on Chinese tech businesses, the Wall Street Journal reported have caused them to expand research to build artificial intelligence (AI) without relying on cutting-edge US semiconductors.

It noted that Chinese tech firms also sought to research chip fusion aimed at reducing reliance on a single type of hardware; this included major firms such as telecom giant Huawei, e-commerce company Alibaba Group Holding, and Baidu tech company.

While overtaking leading US companies in AI development remains a major challenge, there have been some promising experiments that, if developed successfully, could allow Chinese firms to overcome limitations forced upon them by US sanctions and even become more resilient to any future sanctions.

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