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.

China's strategy involved not only extracting and processing rare earths but also creating domestic demand through EVs and wind turbines. This holistic approach, combined with state-owned enterprises that don't require profitability, created an unbeatable market position.

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.

For a trivial investment of just $77 million, a single Tasmanian mine can supply 2.5% of the global market. While this sounds small, it represents a significant portion—about one-sixth—of the market not controlled by China, Russia, or North Korea, highlighting the outsized impact of small-scale investments.

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.

China's dominance in rare earth and critical mineral supplies, which are vital for US weapons and tech manufacturing, gave President Xi a strategic advantage over President Trump in their recent summit. This economic chokehold shifted the traditional power dynamic between the two nations.

China's global dominance isn't in owning mines, but in controlling the midstream refining and smelting processes. This creates a critical choke point for the West's supply of essential materials for defense, AI, and electrification, as they control 50-98% of processing capacity for key metals.