China Tries to Corner the Market on Rare Minerals — Why it Matters Little

By: - May 30, 2019

It’s another week which means another article on how China will dominate the future or is doing something sinister. This time it was a rather detailed article about the rare minerals needed to produce advanced technology. The author argues that China is cornering a significant amount of the market in products needed to make cell phones and satellites. The article promises to do this without “rhetoric or hyberbole,” but that is the entire premise of their piece.

For example, assuming for the sake of argument that China achieves the goal imprinted on them by this article and they corner the market on these items, they would still have to rely on companies in countries around the world, like the Democratic Republic of Congo who are known for their stability and ethical practices. I’m being facetious. Instead, we can reasonably conclude that much like foreign companies in Venezuela, the corrupt government can use them as a convenient scapegoat by passing laws seizing the assets of companies invested in by China.

Assuming corrupt governments don’t view companies with Chinese money behind them as lucrative piggy-banks to raid, China still has to transport these items through tenuous supply chains. One of the major complaints of American power is their worldwide influence or “bullying.” But their naval activities are often as mundane as stopping piracy and securing trade routes. (In naval parlance this is called “securing the commons.”) As I discussed with the failure of Littoral Combat Ships (LCS), this is done through rather conventional technology like destroyers and frigates, which undermines the 4th industrial revolution rhetoric. It’s true that these ships are upgraded with smart technology needed for guided missiles and the like, but it remains unlikely that China will corner the market to such an extent that these ships can’t operate.

Again, assuming China has a monopoly on advanced technology and manages to import them from across the world past corrupt governments and insecure trade routes, this doesn’t mean they will win the next war. Wars are fought by people and not by weapons systems or some mythical Skynet. China is modernizing their forces, but a large part of their force is still rather conventional. This means that in the case of war, they will fight with a force that often lacks interoperability and sufficient reserves. So their relatively analog tanks will have to work in conjunction with their super advanced digital airpower. They have to be led by military commanders with little experience in war or in joint operations among soldiers, airmen, and seaman with no combat experience, but we are supposed to expect that hoarding supplies of cobalt for smart weapons will be the decisive factor.

While China is trying to close the gap in technology and corner the market on rare metals, the gap is still significant enough that in the case of war, the 4th generation warfare and the super technology from China remains a fantasy that has a great chance of underperforming. Like the LCS or China’s J-20 jet fighter whose engine exploded, even in times of peace, attempts at technological leaps will not materialize. In short, China’s endeavors to corner the market on rare minerals is interesting but hardly very concerning.

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