China's push for high-tech dominance

While the coronavirus pandemic and civil unrest are front page news, China’s unrelenting push to leap over our country in critical technology and hoarding of strategic metals should alarm us.

Since the coronavirus pandemic broke out, there has been an unprecedented worldwide demand for personal protective equipment (PPE). Tensions between our countries fueled the widespread fear that Chinese imports would disappear.

China provided 48 percent of our PPE imports in 2018, but Chinese exports of essential hospital supplies declined significantly in the first months of 2020.

“Fortunately, domestic manufacturers coast-to-coast — from Hickey Freeman’s tailored suit shop in Rochester, N.Y., to Dov Charney’s Los Angeles Apparel T-shirt factory in South Central L.A. — are firing up production to help fix the supply shortage of face masks and hospital gowns as a result of the coronavirus pandemic,” WWD.com (fashion design website) reported.

In Washington, companies such as GM Nameplate, largest privately held manufacturing business in Seattle, switched to making face shields to prevent the spread of COVID-19 virus.

While many domestic manufacturers are able to step in and convert production lines to make PPE products, it is a greater challenge with cutting edge technology and stockpiling strategic metals.

China recently announced a new trillion dollar program to develop next-generation technologies as it seeks to catapult itself ahead of the U.S. in critical technology areas, Wall Street Journal reporter Liza Lin wrote. The focus is artificial intelligence, data centers, mobile communications and superfast cellular (5G) networks.

While President Trump is pushing to bring technology and manufacturing back to America, Chinese leaders, as part of the Made in China 2025 plan, are investing heavily to replace foreign tech components with locally made products, Lin added. The strategy is to have local governments, China-owned companies and the national government partner to fund development of cutting edge technology.

China’s control of rare earth and critical metals gives it a key strategic advantage. The rare earth metals are important because of their unique magnetic, luminescent, and electrochemical properties which make many technologies perform with reduced weight, emissions, and energy consumption.

The U.S. Geological Survey adds: “These special metals provide greater efficiency, performance, miniaturization, speed, durability, and thermal stability.”

While the 17 elements classified as “rare earth” are not commonly known, they are critical components in products ranging from smart phones and laptop computers to batteries, electric vehicle and jet engines, wind turbines, LEDs and major weapons systems.

The U.S. currently imports 80 percent of its rare earth metals from China. China sits on 40 percent of the global deposits and currently produces 80 percent (120,000 metric tons) of the world’s supply. Australia is second making 20,000 metric tons.

China also is the world’s largest supplier of critical metals such as manganese. Manganese is the backbone of all modern industrial components and there is no substitute when forging steel. It takes 13 pounds of manganese to make one ton of steel. The United States has no manganese production although it has deposits of manganese ore.

“The current coronavirus pandemic has exposed significant supply chain challenges associated with our over-reliance on foreign (and especially Chinese) raw materials,” Sandra Wirtz, American Resources Policy Network, recently wrote in the Economic Standard.

PPE has become the poster child, but whether it’s smart phone technology, solar panels, electric vehicles, or fighter jets — critical minerals are integrated into all aspects of U.S. supply chains. And, in spite of the fact that the United States is rich in mineral resources, we have maneuvered ourselves into a situation where we often find ourselves at the mercy of China.

That is a dangerous position that our elected officials need to address.

– Don C. Brunell is a business analyst, writer and columnist. He can be contacted at [email protected].