Peter Friedmann’s View from Washington DC - August 2022

China: How Vulnerable Are We?


Mutual dependency accompanied by growing tensions has been the theme of US-China relations for many years. In recent years, both dependency and tensions seem to have increased, yet in the past 30 days the tensions are coming to the fore. What is at stake for the US, how vulnerable are we?

Very.


It did seem odd that a visit by Congresswoman Pelosi to Taiwan would have triggered such an aggressive hostile reaction by China – sending ships into Taiwan waters, missiles over the island, threatening cargo ships serving Taiwan, and more. After all, the Chairman of the Senate Foreign Relations Committee had visited Taiwan just a few months earlier, without such reaction. China, or at least President Xi, is becoming more willing to openly challenge the US. So it was puzzling that four more members of Congress chose to visit Taiwan on the heels of the Pelosi visit, seemingly without notice to or approval by the White House. Word is the State Department feels these visits only create more problems for the US-China relationship.


What’s at stake? A LOT! China is working against US and European interests, in supporting Russia’s invasion of Ukraine. Over 100 countries condemned Russia’s claim that it has the right to reclaim (by force) a former possession -- Ukraine. But China did not condemn Russia, barely masking its own aspirations to reclaim Taiwan. China has already unilaterally expanded its territorial seas, challenging commercial cargo shipping and even US Navy passage.


Yet despite these heightened tensions, commerce between our countries continues unabated: massive volumes of Chinese exports of industrial components and consumer goods flow to the United States, while China continues purchases of US agriculture and other products.


Lurking behind these more obvious elements of the US-China relationship is another potentially more dangerous (to US interests) vulnerability to China. The US is dependent on China for materials essential to much of our daily lives, from cell phones to medical devices to space exploration. These essential materials are the so-called “rare earth” and “critical earth” minerals, including lithium and cobalt, and 19 other elements. China supplies 92% of our consumption.

Without these so-called “rare” and “critical” minerals, our environmental ambitions to become emission free cannot be achieved. This, and our military’s dependency for these elements, explains why ‘cooler heads’ get nervous when we poke China. So, we have two choices: constantly try to do everything we can to avoid China withholding those minerals or developing our own “rare” or “critical” earth sources.


But if they’re rare, how do we get them? The fact is, they are not rare. Here in the United States, we have vast quantities. But we have chosen to avoid the very messy, often toxic business of extracting those minerals from US lands. We want the minerals, but we want someone else, China, to despoil its lands and waters to obtain them. Much like leather – we don’t want the messy, toxic work of tanning done here, so we ship cowhides to China to do it for us. We want it all – Teslas with leather seats, and pristine lands.


Rare earth elements are used in aerospace components, lasers, computer displays and hard drives, high power magnets, X-ray machines, superconductors, LED lightbulbs, chemical processing, fiber optics, nuclear-reactor control rods, sonar systems, cancer therapy, MRI contrast agent, PCB cleansers, cell phones, hybrid-car batteries, camera lenses, microwave filters, catalytic converters, aircraft engines, carbon arc lights, optical electronics, missile/rocket guidance systems


Can we do without them? Probably not. Should push comes to shove and China withholds the minerals, we will have to start mining and processing, requiring years of massive investment in exploration, recovery, and industrial processing infrastructure. Will we have the will? Will we have the time?


We are vulnerable, and China knows it.


Peter


Peter Friedmann OurManInDC@FederalRelations.com

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