Almost all modern technology requires certain critical elements to function, beyond steel, aluminum, copper, etc. – And China controls many of these materials (rare earths) in some cases up to 95% of the total world production
For example,
- A smartphone contains about 63 of the 92 elements of the periodic table.
- The touch screen only works because of an indium paste on the back of the glass.
- The vibration system requires tungsten.
- The display’s optical systems use phosphors such as europium and lutetium.
- The integrated circuits inside contain germanium.
- And many more, most of which are Chinese.
On a larger scale, a Virginia-class nuclear submarine has several tons of powerful magnets in its electric propulsion motors alone, not to mention everything else “electronic” inside the vessel. These systems range from the sonar dome and transceivers to the computers, internal instruments, and displays that allow the crew to dive and steer the beast. And torpedoes require critical materials.
And while we’re on the subject of submarines, don’t neglect the super-strong steel alloy of the hull itself, made with a variety of critical elements that add strength and durability to the base iron metal. Again… Chinese materials, much to the chagrin of the folks at NavSea who buy these ships for the Navy.
We could go on and on with countless examples, but you get the idea, many of these critical components and materials come from China. If it’s not the ore deposit itself, then it’s definitely the refining process and subsequent manufacturing.
There’s no other way. And without Chinese materials, it will cause technological death because the technology won’t work.
China Controls Global Supply Chains
None of China’s metallurgical dominance is accidental. At least since the 1960s—during Mao’s Cultural Revolution, in fact!—China has had a long-term strategic plan to dominate key segments of the global market for critical materials and metals.
Indeed, China’s first national step came in 1963, when the country’s ruling authorities established an institute to study rare earth elements (REEs), the so-called “lanthanide” series on the periodic table.
Since then, for over 60 years and despite internal political turmoil and all sorts of economic and social challenges, the Chinese have focused on dominating global supply chains for a long list of critical items: REEs, but also other metals such as tungsten, antimony, indium, gallium, germanium and others.
Such national capability naturally begins with human resources. In the 1960s, 1970s and certainly over the last forty years, China sent many of its brightest minds abroad to study at then-Soviet (now Russian), American, European, Japanese and Australian universities. Their mission was to learn everything. To bring knowledge home.
Moreover, for 60 years, Chinese researchers have been scouring patent offices around the world to learn what was available in the files. Thus, in recent decades, China has dominated the global patent landscape.
In fact, for every U.S. patent on REE technology, China files 30. Today, China has entire universities focused on REEs, as well as other critical metals, and their mining, metallurgy, refining, processing, and applications. That is, China has literally armies of scientists, engineers, and technical experts; numbers in the hundreds of thousands at least, and probably more.
The Design of Economic Dominance
At the national political and strategic level, China has designed its economic dominance from the top down. For example, in 1992, China passed a law designating rare earths as “strategic” and prohibiting foreigners from investing in Chinese projects.
Thus, in China today, such resources are reserved for domestic production and value-added. In effect, China has focused its industrial control on metals and materials with military purposes in mind.
One aspect is what is called the “16 Character Policy” for critical materials. These characters became national policy in 1992 and remain legal mandates throughout China, particularly for mines and minerals. The translation is:
- Combine the Military and the Civil.
- Combine Peace and War.
- Prioritize military projects.
- Let the Military support the Civilian.
For decades, China has built up its capabilities and imposed export quotas on rare earths and other critical metals. And China’s tight control over production and global sales has always favored Chinese interests.
Of course, China welcomes foreign companies to invest there and use its materials, as long as China gets something in return. For example, Apple has spent 30 years manufacturing products in China (e.g., iPhones). Along the way, Apple and its subsidiaries have trained over 25 million Chinese in advanced technical skills.
In another example, in the 2000s and 2010s, much of the world’s light bulb industry moved to China. This is not because China needs all the world’s light bulbs.
It is because China told foreign manufacturers that if they wanted tungsten for filaments and later rare earths for LED bulbs, they had to build factories in China… and teach Chinese engineers and workers how to make the products.
Almost any modern technology: batteries, electric vehicles, computers, lighting systems, radar, robots, drones, AI, quantum computing, space development, and more… and the key materials – exotic items like high-grade graphite or metals like rare earths, tungsten, tin, indium, gallium – are controlled by Chinese producers and suppliers.
The West Caught Sleeping
It’s not that some in the West didn’t see what was unfolding with China and its control over critical materials.
Yet despite clear indications of what was happening, many Western governments and industries were unmotivated to do anything (i.e. spend serious money), despite clear warnings from outside observers, if not from intelligence and military agencies, as well as from American laboratories like Ames, Los Alamos, Oak Ridge, Livermore, and others. It’s a long, sad story of disappointment.
But in recent years, the alarm bells have been ringing loud and clear. It has become clear in both the American government and industry alike that the so-called “technology” is just a cherry-picking bench for children without the basic materials needed to build the actual equipment.
And now, what took China 60 years to build, the West is trying to condense into maybe five. Yeah… good luck.
The bottom line is that rare earths and many other metals and materials are vital to future technology, and without them, the West will not only be left behind, but will not be able to move forward at all. No exotic metals? Then no exotic technology. Game over.
So yes, China remains dominant, but the good news is that the West is investing and diversifying through intensive efforts to find mineral deposits and develop mines, refineries and post-processing.
Money moves, and at an investment level there is a high growth potential, along with high risk, so you should always do your research.
Finally, China has been working for 60 years to dominate global markets for high-quality materials and critical metals.
And the Chinese are pretty good at it, which makes the challenge even more daunting. But the West – and the US in particular – is forced to fight a desperate battle to make up for lost ground.
