In the escalating trade-technology war between the US and China, both sides scope for the heaviest arsenal. While Washington hits access to advanced software and chips, Beijing responds by utilizing its most powerful weapon: almost complete control of the global marketplace rare earth metals. China's decision to drastically reduce exports of these key natural materials is seen by analysts as a much more serious and more painful blow than US software restrictions.
What are uncommon earth metals, and why are they so important?
Rare earth metals are a group of 17 chemical elements (such as neodymium, dysprosium, lanthanum) which, contrary to their name, are not highly uncommon in the earth's crust. However, their extraction and, more importantly, processing for a useful form, it is simply a process highly complex, costly and toxic to the environment.
They are absolutely essential for almost all modern technology. As 1 analyst put it, Nikkei Asia“They are vitamins for the 21st century industry”. Without them they will not rise:
- Permanent magnets: Key for engines in electrical vehicles, wind turbines, as well as hard drives, speakers and smartphones.
- Advanced electronics: utilized in LED/OLED screens, fibre optics and lasers.
- Weapons industry: essential in rocket guidance systems, radars, sonars, jet engines (e.g. F-35) and stealth technologies.
China's Domination: Perfect Weapons
The problem is that China has been building its position for decades, becoming almost a monopoly. According to data from different sources, including US Geological Survey and reports European natural Materials Alliance:
- China controls around 60-70% of global mining uncommon earth metals.
- More importantly, they control 85-95% of global processing and refining These natural materials.
This means that even if another countries (such as the US or Australia) resume mining, they will inactive gotta send ore to China for processing. Beijing built this dominance, accepting low prices and immense environmental costs for which the West was not ready.
Why is it a more dangerous weapon than software sanctions?
- No immediate alternative: While China has spent years investing billions in developing its own software (operational systems like HarmonyOS, EulerOS) and creating alternatives to American applications, The West has practically eliminated its uncommon earth processing industry. As he notes Politico"The West woke up from a strategical nap and realized that its green transformation and defence manufacture are entirely dependent on Beijing's goodwill". Rebuilding these capabilities is simply a process that takes time (from 5 to 20 years) and will require gigantic investments. For private companies, it is even impossible to initiate this process due to the fact that it will not be accepted by shareholders.
- Paralysis of full industries: Limiting access to software slows down the technological improvement of China, but does not halt their factories. On the another hand, cutting off the supply of uncommon earth metals may lead to the stopping production lines in key sectors of the US and Europe economy – from automotive (Tesla, GM, Volkswagen) to renewable energy (Siemens Gamesa, Vestas) and armaments (Lockheed Martin, Raytheon).
- Asymmetry of dependence: Chinese companies have learned to function in an environment with limited access to American technologies. According to 1 expert cited by South China Morning Post, “US sanctions accelerated the Chinese pursuit of self-sufficiency”. In turn, Western companies do not have a plan B in the absence of key natural materials. Their business models are based on the presumption of permanent and undistorted access to Chinese supply chains.
- Global domino effect: Chinese restrictions strike not only in the US, but in all Washington allies, including Europe, Japan and South Korea. Korea JoongAng Daily emphasises that for the Korean high-tech industry, which is completely dependent on imports of these natural materials, the Chinese embargo would be a “catalogical scenario”. This puts US allies in an highly hard situation and can lead to cracks in the united front against China.
As concluded by 1 of the European diplomats in his interview with Le Monde: “For years we have been worried about our energy dependence on Russia. It turns out that our natural material dependence on China is much deeper and harder to overcome."
Beijing's decision is simply a strategical decision that shows that in a technological war it is not just software and chips that matter, but besides fundamental control over the natural materials without which the digital planet simply cannot exist. This is simply a painful lesson for the West, which should now in haste make up for decades of strategical negligence.
Source:
- Politico;
- Nikkei Asia;
- South China Morning Post;
- Le Monde (France);
- Korea JoongAng regular (South Korea);
- US Geological survey (USGS);
- European natural Materials Alliance (ERMA);
Leszek B. Glass
Email: [email protected]
© www.chiny24.com