While the US focuses on quarterly returns, China has spent decades investing in and controlling the supply chain for critical minerals essential for technology and defense, securing long-term leverage.

For 30 years, China identified rare earths as a strategic industry. By massively subsidizing its own companies and dumping product to crash prices, it methodically drove US and global competitors out of business, successfully creating a coercive dependency for the rest of the world.

China is leveraging its 90% control over rare earth processing not just against the US, but globally. By requiring licenses from any company worldwide, it creates a chokehold on high-tech manufacturing and establishes a new template for economic coercion.

While headlines focus on advanced chips, China’s real leverage comes from its strategic control over less glamorous but essential upstream inputs like rare earths and magnets. It has even banned the export of magnet-making technology, creating critical, hard-to-solve bottlenecks for Western manufacturing.

China achieved its near-monopoly on rare earths not by chance, but through a long-term state-sponsored strategy. This involved providing capital to key firms, funding overseas acquisitions, banning foreign ownership of domestic mines, and consolidating the industry to control global prices.

China is restricting exports of essential rare earth minerals and EV battery manufacturing equipment. This is a strategic move to protect its global dominance in these critical industries, leveraging the fact that other countries have outsourced environmentally harmful mining to them for decades.

China's leadership in renewables isn't just in manufacturing. It has strategically secured control over the entire supply chain—from owning international mines and refining raw ore to producing the final solar panels and batteries—giving it immense geopolitical and economic leverage.

Attempting to out-mine, out-process, and out-spend China in traditional rare earth production is a losing strategy. The U.S. can gain an advantage by investing in breakthrough technologies that bypass China's existing chokehold on the supply chain.

The urgent need to replenish munitions for Ukraine and prepare for a Taiwan contingency is directly undermined by dependency on Chinese rare earths. Chinese export control laws can automatically deny sales to defense users, creating an acute short-term vulnerability for a Western defense industrial base holding limited stockpiles.