China threatens powerful weapon in trade war in 2023

The US has imposed restrictions on the export of computer chips to China. Now China is threatening to block the production of solar cells.

According to Bloomberg , the Chinese government is threatening to put an end to the export of advanced Chinese technology used to manufacture solar cells. This could hamper the green transition in Europe and the US, which are dependent on China's supply chains.

Thus, China accounts for 97 percent of the world's total production of silicon wafers, which form the core of solar cells. Silicon comes from a special type of sand, quartz, and extracting it is an energy-intensive and complex chemical process. In short, this means that in practice you cannot produce solar cells in the USA and Europe without buying the silicon plates in China.

Will protect technological edge

The official explanation is that China wants to protect its position of strength in the area. But the considerations come in the wake of the US government introducing new  in the restrictions umn , which prevent Chinese companies from buying computer chips in the us  

It is a heavy blow to China, which for many years has worked hard to develop its own computer chips, but is still dependent on importing the most advanced computer chips that act as the brains of all modern technology, from smartphones to electric cars.

Focus on security of supply

The war in Ukraine has made it clear how risky it can be to depend on a single country when it comes to raw materials and production. That is why the US government is massively investing in building its own green industry, among other things in electric cars and solar cells. This is done, among other things, through a number of subsidies for private individuals and companies that invest in the USA, and this challenges both Chinese companies in China and Chinese companies on the American market.

According to the Reuters news agency, the EU Commission is also expected to launch a new green industrial plan on Wednesday this week, which will make it easier for European companies to compete with China and the US and make it more attractive to invest in the EU.