The tension between the US and China has come to the fore of international politics in 2011 when the US changed the focus of its foreign policy to Asia known as the “Pivot to Asia”. This policy is initiated originally to balance against the rise of China as it surpassed Japan to become the second-largest economy in 2010. The trade became more intensified especially during the Trump administration who viewed the US as suffered from the trade deficit between two countries, which the US trade deficit rose from USD 103.1 billion in 2012 and further increased to USD378 billion in 2018. This concern became the presidential campaign that allowed Donald Trump to get elected in 2016. Trump administration waged a trade war with China in 2018 which led to retaliation against each other that made both sides economically lose from this tension. The new administration, Joe Biden, is not perceived differently. However, opting for a more confrontational approach is very risky since the US still relies heavily on mineral importing from China, particularly rare earth.
The geopolitical influence over the dominance of rare earth supplies
Rare earth is a compound of various metals that composes of yttrium and scandium and other 15 lanthanides, which are characterized by different chemical substances. It is an essential element to develop modern high technology such as smartphones, wind turbines, hybrid cars, and oil refineries. It is also very important in sophisticated military technology. The advancement of high-tech weapons including, jet fighter, missile guidance system, anti-missile system, and laser, as well as satellite, depends on a different type of rare earth mineral. Rare earth is not exactly as rare as its name implies, processing is rather a more costly and challenging process. Currently, China has dominance over the processing of rare earth production which controls 85 percent of the rare earth supplies. Many countries including the US and its allies relied on China’s rare earth, while in 2019 China’s rare earth was only supplied to few countries. Of which Japan ranked the top following by the US. They imported 36 percent and 33, 4 percent, respectively of Chinese rare earth supplies. In 2021, China also increases its production by nearly 30 percent due to the rising demand, however, it is viewed as a part of its Belt and Road Initiative (BIR) which hopes to spread China’s influence globally.
Depending too much on China’s rare earth supplies would give China geopolitical advantages over the US and its allies. For instance, in 2010 China reduced rare earth supplies to Japan over the conflict in the Senkaku islands. In 2020, China also threatened to impose an embargo on the US defense contracted companies that exported arms to Taiwan, including Lockheed Martin Corp, Raytheon, and Boeing. In this sense, China could use metal and ore against the US in times of conflict.
In recent times, there is a concern within the US government over the dependency on China minerals. According to Nathan Picarsic, the founder of Horizon Advisory, he sees China controlling the processing industry for having bargaining power rather than economic return. Rare earth is also minded in the US, Australia, Malaysia, Brazil, South Africa, and India, but processing is a more challenging and costly that only China produces almost four-fifths of the global supply chain. The US owner of the rare earth facility also exports it from California’s Mountain Pass to China, approximately around 50,000 tons of rear earth annually. In order to reduce the dependency on China, the Pentagon has inked contracts with Australian and American miners to establish refining and processing which its operation is expected to begin in 2022. China could produce 200,000 tons of rear earth, which is the world’s largest rare earth processing facility . So, it would take years for the US to catch up with China.
The Author
Sokvy Rim is a Bachelor’s Degree holder in International Relations from Department of International Studies, Institute of Foreign Languages, Royal University of Phnom Penh.