China has an absolute monopoly over raw resources key to US military dominance

China’s central role in the global supply chain has prompted the United States to initiate a series of measures to de-risk its relationship with the world’s second largest economy as relations worsen. For the US defence industry, it seems inevitable that Washington will want to go further and seek to cut out China completely. Whether it will work is another question, though. China now plays a central role in the global economy as a leading producer of everything from the raw materials used to make basic equipment and rare earth metals to the hi-tech equipment that is vital to the production of some of America’s most advanced weapons. When it comes to global arms exports, China accounts for a relatively modest 6.6 per cent of the market, according to data from the Stockholm International Peace Research Institute. But because China accounts for 20 per cent of total global manufacturing trade, according to Beijing’s own figures, the picture is very different when looking at the components used to make weapons. If all made-in-China parts and components were removed from existing weapons as well as from the international arms industry’s supply chain, it would lead to chaotic consequences for arms manufacturers around the world. Precision-guided missile makers would struggle to find enough sensors, there might not be enough infrared lenses for night-vision goggles and shortages of bulletproof fibre would have a knock-on effect on supplies of body armour. It could also cause the war in Ukraine to suddenly stop. Much of the Western equipment supplied to Ukraine – from Javelin anti-tank missiles to Patriot air-defence systems – would stop working, and the same would apply to significant parts of Russia’s arsenal, from drones to armoured vehicles. Lockheed Martin’s F-35 Lightning II, the cornerstone stealth fighter for the US and its allies, would see production lines coming to a halt while the existing fleet would run out of replacement parts. The plane’s engines and flight control systems use critical high-performance magnets, made of rare earth materials such as neodymium, dysprosium and praseodymium – all sourced from China. As China also dominates the global rare earths processing industry there would be no immediate alternative source for these high-grade magnets. China also has “a near-total monopoly over gallium, a critical mineral used to produce high-performance microchips that power some of the US’ most advanced military technologies”, the Centre for Strategic and International Studies, a Washington-based think tank, said in a report last July.