With China imposing export controls on certain graphites from December 1, several countries are adjusting their strategies to deal with the impact of the move.
South Korean and Japanese battery companies are particularly wary because they are highly dependent on Chinese graphite imports. However, how to circumvent China's dominance in the global graphite chain is not an easy task.
As the world's largest graphite producer and exporter, China has maintained a technological leadership in the field of graphite processing for many years. According to statistics, in the future, about 98% of the growth of anode products in the global graphite field will focus on China.
This fully shows that China has firmly controlled the global graphite industry chain. Through the implementation of export controls, China aims to curb illegal exports, protect domestic resources, and also prevent external forces from controlling China's graphite resources and safeguard its interests.
The impact is particularly significant on South Korean companies, where the total value of graphite imported for battery anodes last year was as high as 2$4.1 billion, 937% are imported from China.
In the industry, by the first half of 2023, three of the top ten global power battery companies will come from South Korea. Once China** is interrupted, South Korea's battery industry is bound to be hit hard.
Therefore, South Korea** and the industry are doing their best to respond. South Korea's L&F has increased its investment in building a new battery anode material factory, hoping to get rid of its dependence on China.
The Ministry of Industry will also communicate with the Ministry of Commerce of China through diplomatic channels to minimize the adverse impact of graphite control measures on Korean companies.
Japan faces the same dilemma. According to Japan** data, nine out of 10 graphite imports from Japan in the past came from China. Most of the core products of Japanese companies such as Sony and Panasonic need to use this part of imported graphite. Therefore, China's export controls will undoubtedly deal a heavy blow to the development of Japan's technology industry, which may lead to the stagnation of the industry.
In order to exert pressure, Japan has made a formal request to China, saying that China's control measures violate the principle of freedom, and if China does not respond, Japan will resort to relevant WTO regulations.
This is not the first time that Japan has invoked WTO rules and China policy. Previously, on the issue of nuclear sewage discharge, Japan also took the first action against China's retaliatory tariff measures to ban the import of Japanese goods, and filed a lawsuit with the WTO.
In this regard, a spokesman for China's Ministry of Commerce said that China's graphite export control policy is not aimed at any single country, as long as it meets the relevant regulations, it can still obtain export licenses.
The Chinese side regrets Japan's attempt to create incidents. As China's neighbor, Japan should shoulder its responsibilities rather than always being dependent on the United States. China has repeatedly called on the Japanese side to face the differences between the two countries rationally and seek to achieve win-win results through dialogue and cooperation.
The core intention of this graphite export control is to remind relevant countries that China has the strength to take countermeasures, so that countries such as Japan and South Korea realize the risk of acting as a lackey of the United States, and second, to strive for more strategic development space for China, and also to win valuable time for domestic enterprises to iterate on technology.
This fully demonstrates China's industrial strength and strategic determination, and indicates that China's graphite industry will serve the national development strategy at a higher level.