Xi urges open supply chains in SCO speech after curb on key metal exports

Chinese leader Xi Jinping called on nations to spurn decoupling and the cutting of supply chains, one day after his nation imposed limits on exports of two key metals used to make chips to counter Western restrictions on Beijing.

The world’s No. 2 economy wants to work with nations to “reject the moves of setting up barriers, decoupling and severing supply chains, Xi said in a virtual speech to Shanghai Cooperation Organization leaders.

“We should make the pie of win-win cooperation bigger, and ensure that more development gains will be shared more fairly by people across the world,” he said, according to a text of the comments released late Tuesday by the official Xinhua News Agency.

The remarks contrast with a decision by Xi’s government on Monday to subject gallium and germanium, along with their chemical compounds, to export controls. China’s Ministry of Commerce said the move was meant to protect national security.

The export controls on the metals are “just the beginning and China will step up countermeasures if the US imposes more tech curbs,” said Wei Jianguo, a former vice minister of commerce.

Wei told state-run China Daily that he expected the controls to exert heavy pain on some countries. China’s move, which come just before US Treasury Secretary Janet Yellen visits Beijing, may accelerate efforts by countries to reduce dependence on the world’s second-biggest economy.

The US has taken increasingly aggressive measures to rein in China’s technology ambitions, largely to limit military advances, and has worked to convince allies in Europe and Asia to do the same.

The US is now preparing to curtail Chinese companies’ access to cloud-computing services including those provided by Amazon.com Inc. and Microsoft Corp., the Wall Street Journal reported, citing people familiar with the situation.

Washington is considering requiring cloud providers to seek government permission before serving Chinese firms that employ such platforms to train AI models, the Journal reported.

Beijing has previously complained about nations decoupling or de-risking from China. Last week, Premier Li Qiang warned that governments which attempt to politicize their economies will only fragment the world.

“The invisible barriers put up by some people in recent years are becoming widespread and pushing the world into fragmentation and even confrontation,” he said.

In a sign of the broad push China is making to counter any de-risking push, Minister of Commerce Wang Wentao told former Japanese Foreign Minister Yohei Kono in Beijing on Tuesday that the two nations should work to ensure supply chains remain stable.