The Elements of Innovation Discovered
The Elements of Innovation Discovered
Critical Minerals Alliances - August 7, 2025
China understands the strategic, economic, and geopolitical advantages of controlling critical mineral supply chains.
China is leveraging its critical mineral dominance in an escalating economic and technological trade war with the U.S.
China is the U.S.'s top supplier of 30 minerals critical to national defense, the energy transition, and high-tech manufacturing.
China's rare earth restrictions forced a three-week closure of Ford plant due to a lack of high-power magnets for speakers, power seats and windows, windshield wiper motors, various sensors, and other essential parts.
Ashley Zumwalt-Forbes
Salim Bhabhrawala
Joe Sopcisak
Like the winged wyvern of mythical legendarium, China fiercely protects a trove amassed over decades. The Red Dragon, however, is not jealously guarding piles of golden treasures and glimmering jewels. Instead, it defends control over the global supply of antimony, gallium, rare earths, and other elements much rarer and more vital to the high-tech world of the 21st century.
While many of these critical minerals are valuable in their own right, their true worth is in the technologies they support – smartphones, laptops, supercomputers, robots, electric vehicles, solar panels, and an endless list of future-leaning technologies cannot exist without them.
Early on, China realized the value of some of the more obscure elements on the periodic table, and the Red Dragon has been amassing its hoard for decades.
In 1992, five years before his passing, People's Republic of China leader Deng Xiaoping famously said, "The Middle East has its oil, China has rare earth."
But it is the less-recounted continuation of his words that laid the foundation for the Red Dragon's forthcoming strategy when it comes to rare earths and other critical minerals.
"China's rare earth deposits account for 80% of identified global reserves, you can compare the status of these reserves to that of oil in the Middle East ... we must be sure to handle the rare earth issue properly and make the fullest use of our country's advantage in rare earth resources," he said.
More than three decades later, the Red Dragon has leveraged near-absolute control over the world's supply of rare earths and other amassed critical minerals – whether by hoarding these elements of innovation within its borders or burying would-be competitors in low-cost critical minerals avalanching from its trove.
Retired U.S. Army Colonel Joe Buccino reflected on the strategic prescience and showed some foresight of his own in a column written at the end of 2023.
"China's foresight here is as clear as the United States' myopia," he inked in an article published by RealClear Defense. "Should China, in the leadup to an invasion of Taiwan, block exports of rare earths or processing technology, this would cripple the U.S.'s ability to produce the kinds of ammo required to sustain a long-term high-tech war."
Shortly after the article was published, China banned the export of rare earth extraction and separation technologies and has since restricted the exports of 16 critical minerals, including seven of the rarest of the rare earth elements.
These restrictions have awoken many policymakers in the West from their myopic dreams of globalization to the harsh reality that they are beholden to the Red Dragon for most of the minerals and metals critical to automotive, clean energy, defense, and high-tech manufacturing.
China is the U.S.'s top supplier of 30 minerals critical to national defense, the energy transition, and high-tech manufacturing.
While Buccino's concern about a confrontation with China over an invasion of Taiwan is an issue still brewing, the Red Dragon has primarily been leveraging its critical minerals hoard as a weapon in an ongoing tech and trade war with the U.S. and other Western nations.
Since banning the exports of rare earth processing technologies at the end of 2023, Beijing has been expanding a list of critical minerals that require state authorization before being exported out of the country – a licensing mechanism that provides the communist government the power to determine the quantities of critical minerals leaving the country, and to whom they are shipped.
At the end of 2024, China leveraged this mechanism to enforce a complete ban on the exports of antimony, gallium, and germanium to the U.S.
The ban on this trio of metals critical to defense and high-tech manufacturing was unveiled just one day after the Biden administration blacklisted 140 Chinese-owned companies from receiving computer chipmaking equipment and related technologies, as well as high-bandwidth memory chips from the U.S.
Similarly, the Dragon has responded to the tariffs imposed by President Trump on imports from China immediately after his 2025 return to the Oval Office with restrictions on five additional minerals essential to the high-tech, clean energy, and defense sectors of the economy – bismuth, indium, molybdenum, tellurium, and tungsten.
Three months later, Beijing retaliated against Trump's "Liberation Day" tariffs with restrictions on the exports of seven rare earth elements vital to aerospace, auto manufacturing, nuclear energy, and advanced weapons systems.
In total, over the past three years, China has restricted or banned the exports of 16 critical minerals, along with separation and processing technologies that could be used to produce rare earths outside of the Middle Kingdom.
"We could be producing most of these minerals here at home – under world-leading environmental, labor and safety standards – yet China remains a massive threat to our supply chains and has boldly reminded the U.S. just how deep our dependence runs," National Mining Association President and CEO Rich Nolan said at the time.
The deep-running dependency highlighted by Nolan, Buccino, and a growing number of geopolitical thought leaders in the West will be tough to break without a well-thought-out strategy and the willingness to invest in seeing that plan through.
China is leveraging its critical mineral dominance in an escalating economic and technological trade war with the U.S.
China's critical minerals strategy echoes the visionary rare earths mandate made by Deng Xiaoping more than 30 years ago.
The Red Dragon understands that the strategic, economic, and geopolitical advantages of its hoard far outweigh the individual values of the critical minerals within it.
The advantages begin with the fact that critical minerals are the spices, not the main course of 21st-century manufacturing. Much like a dash of salt, pepper, garlic, and other seasonings make the difference between a bland and delicious dinner, rare earths and other elements of innovation are the sparing yet key ingredients in smaller, faster, and more powerful future-leaning devices.
The seasonings of both culinary delights and high-tech manufacturing are typically more expensive per pound than the other ingredients, but account for a small fraction of the overall cost due to the minute quantities needed.
China would much rather run the kitchen than sell the spices.
This strategy leverages the relatively small markets for most critical minerals in the Red Dragon's hoard into the multi-trillion-dollar realm of 21st-century automotive, clean energy, and high-tech manufacturing.
The economic impacts of this strategy are reflected in a late-2024 U.S. Geological Survey report, which estimates that China's bans on the exports of gallium and germanium alone could cause America's gross domestic product (GDP) to plummet by $3.4 billion.
With China supplying roughly 98% of the world's gallium and a significant portion of harder-to-track germanium, American manufacturers are left with limited alternatives to moving their manufacturing to where the critical minerals are available.
American automakers are already dealing with this dilemma.
In May, Ford Motor Company was forced to temporarily halt vehicle production at some of its U.S. plants due to a shortage of rare earth magnets. While the drive motors in EVs are the best-known application, these powerful magnets are also widely used in both traditional and electric vehicles.
"We shut down plants for three weeks because we cannot get high-power magnets – magnets go into your speakers in your audio system, your seat's motors, your wiper motors, your door motors, and we can't make that stuff," Ford CEO Jim Farley said during a late-June presentation.
The manufacturers that supply Ford, General Motors, and other automakers with these rare earths-enabled parts warned that China's export restrictions could reverberate across the American auto sector.
"The situation remains unresolved and the level of concern remains very high," MEMA, the Vehicle Suppliers Association, penned in a statement to Reuters. "Immediate and decisive action is needed to prevent widespread disruption and economic fallout across the vehicle supplier sector."
China's rare earth restrictions forced a three-week closure of Ford plant due to a lack of high-power magnets for speakers, power seats and windows, windshield wiper motors, various sensors, and other essential parts.
In late June, Beijing announced that it would resume shipment of rare earths to the U.S. following a trade deal signed by Trump and Chinese President Xi Jinping.
While these shipments bring some short-term relief to American automotive and electronics manufacturers facing critical mineral shortages, critical mineral supply chain analysts in the U.S. are concerned that the deal will undermine efforts to build a domestic supply chain that can shield the U.S. from the Red Dragon wielding its hoard as a trade war weapon in the future.
Ashley Zumwalt-Forbes
Ashley Zumwalt-Forbes, who served as U.S. Deputy Director for Batteries and Critical Materials during the Biden administration, warns that we should not confuse the short-term rare earths pressure relief with progress.
"We just handed more market share and leverage back to the very supplier that has shown, repeatedly, it can cut us off overnight. That's not stability, but rather a concentrated strategic risk," said the Harvard Business School engineer who founded Smoketree Resources, a critical minerals investment firm.
Salim Bhabhrawala
Salim Bhabhrawala, who recently retired from his role as International Critical Materials Coordinator for the U.S. Department of Energy, agrees.
"This deal truly undermines our aspirations to create a vertically integrated domestic supply chain for rare earths and critical minerals. It also significantly compromises our national security," he posted to LinkedIn on the news that China was to resume rare earth exports to the U.S.
Joe Sopcisak
Joe Sopcisak, a Washington, D.C.-based national security and defense industry base executive at Holland & Knight, is cautiously optimistic that the much-needed rare earth shipments do not derail efforts for more permanent critical mineral supply chain solutions in the U.S.
"My hope...this will let material flow so that more production lines don't come to a standstill, while simultaneously the country continues to close domestic supply chain gaps as if this didn't happen," he wrote in response to Zumwalt-Forbes' post.
Sopcisak is hopeful the resumed shipments serve only as a stopgap, not a substitute, for serious investment in U.S. critical mineral independence.
"One can dream, right?" he mused.
Understanding that its hoard holds more value than the critical minerals within it, the Red Dragon is also making it difficult to establish supply chains outside of China.
Beyond lulling industry executives, policymakers, and investors into complacency with a steady supply, the Red Dragon can bury would-be competitors in the U.S. and around the globe with an avalanche of low-cost critical minerals.
This strategy became evident in 2010, when China severely restricted rare earth exports as a means of punishing Japan during a dispute over the sovereignty of islands in the South China Sea.
As a result, rare earth prices skyrocketed, and a global rush to discover and develop deposits outside of the Middle Kingdom erupted. At the height of this frenzy, the Red Dragon flooded the markets with stockpiles it had amassed during the embargo – driving many hopeful rare earth companies out of business and providing Chinese companies with an excellent opportunity to buy distressed rare earth assets around the globe at a discount.
Whether part of its stratagem or happenstance, the withholding and following avalanche of rare earths during the 2010s tightened the Red Dragon's grip on this group of technology metals.
Today, China dominates the global supply of antimony, bismuth, cobalt, gallium, germanium, graphite, indium, rare earths, tellurium, tungsten, vanadium, and other minerals critical to 21st-century manufacturing.
The Red Dragon's willingness and ability to protect its hoard serve as a cautionary tale for Western governments and companies that do not want to be burned or buried as they attempt to build critical mineral supply chains outside of China.
With more than 17 years of covering mining, Shane is renowned for his insights and in-depth analysis of mining, mineral exploration, and technology metals.
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