Chia-Hsuan Wu, Research Fellow and Deputy Director of the First Research Division at the Chung-Hua Institution for Economic Research (CIER), noted that China has classified silver as a national strategic material starting in 2026 and introduced a licensing system to regulate exports. The move reflects Beijing’s policy drive to tighten resource control and strengthen industrial supply chain positioning amid rapidly growing domestic demand from the solar and electronics sectors.
Licensing Framework Takes Effect, Reinforcing Export Controls and Industrial Consolidation
On the legal and regulatory front, China has brought silver under its export management system through a framework grounded in the Foreign Trade Law of the People’s Republic of China and the Export Control Law of the People’s Republic of China, supplemented by the state trading enterprise system and announcements from the Ministry of Commerce. Under this regime, export licenses are issued on a shipment-by-shipment basis — a case-by-case review mechanism designed to ensure that both the destination and end-use of each export remain traceable and controllable. Deputy Director Chia-Hsuan Wu further noted that only 44 companies are eligible to export silver during the 2026–2027 period, the majority of which are large central or local state-owned enterprises, reflecting Beijing’s highly centralized approach to managing critical resources.
In terms of policy design, eligible exporters must meet thresholds related to production scale, export track record, and international certification standards, effectively squeezing smaller operators out of the market. On one hand, this move helps stabilize domestic supply, reduce corporate costs, and accelerate the transition from exporting raw minerals to manufacturing high-value-added products. On the other hand, it risks exacerbating the trend of “state enterprises crowding out private players” and allowing administrative interventions to distort price-discovery mechanisms.
From a market perspective, China is the world’s second-largest silver producer, yet output has declined in recent years even as industrial demand has surged. Industrial silver consumption reached 8,567 metric tons in 2024, with solar and electronics applications accounting for the lion’s share. In 2025, driven by industrial expansion and policy-driven front-loading, China’s net silver imports rose sharply — a sign of tightening domestic supply. On the price front, Shanghai markets have been outpacing international benchmarks, with the domestic premium widening considerably, reflecting a deepening supply-demand imbalance within China’s borders.
Strong Demand and Policy Intervention Pose Challenges for Global Prices and Supply
Deputy Director Chia-Hsuan Wu noted that through its state-owned enterprise network and export approval system, China has now acquired the capacity to regulate both the volume and pricing of silver exports. Compared with other strategic materials such as rare earths, silver benefits from greater price transparency in global markets — meaning any contraction in Chinese supply will feed more directly and visibly into international price volatility.
For the broader global economy, China’s export controls risk reducing market supply, widening the supply-demand gap, and driving up prices while simultaneously strengthening Beijing’s policy leverage over critical minerals. Countries around the world will likely accelerate efforts to diversify sourcing in order to reduce supply-chain vulnerability.
At the industry level, silver is a critical input for solar cells and electronic components, and sees extensive use in advanced semiconductor packaging and AI server manufacturing. In addition to the direct increase in raw material costs, the licensing mechanism that requires individual government approval for each export transaction could significantly lengthen procurement lead times. It may lead to important repercussions for production continuity and supply chain stability in the electronics and semiconductor industries.
Author: CIER Editorial Team
Date: April 2, 2026