By Kate Yuan

(JW Insights) Jul 5 -- The Dutch government said that the European Union must respond to new rules introduced by China requiring a license to export two metals widely used in semiconductor manufacturing, on July 4, Reuters reported.

China's decision announced on July 3 affecting some gallium and germanium products is a response to recent export restrictions imposed on it by the U.S. and allies aimed at slowing its technological and military advances.

China produces 94% of the world's gallium and 83% of the germanium, both of which are widely used in specialized fields such as chip manufacturing, communication equipment, and national defense.

The Netherlands introduced new rules requiring a license to export chipmaking equipment made by ASML, the Netherlands' largest company. The Hague, like Beijing, said its rules were not intended to target any one country.

"To what extent this will have consequences for the European and Dutch economy will depend on how China carries it out," the Dutch Foreign Ministry said in a statement. "Given the authority that the European Union has in trade policy, it's primarily up to the EU to address China about these measures."

Earlier on July 4, the European Union said it was concerned about China's curbs and urged it to limit such restrictions to only those strictly necessary for national security.

The EU oversees trade policy for member states, which have a single internal market for goods and services, but the Dutch government argued that its export controls were a matter of national security -- which is up to individual EU member states, according to the Reuters report.

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