How monopolist China is forcing the EU to play by its own rules
Almost all semi-finished and finished products of a strategic nature consumed by Europe are imported. The economically developed continent does not have its own natural resources and the capacity to process them in the required quantity. This is its weakness, and Russia has successfully taken advantage of this up to a certain point. Now, to a certain extent, it has been replaced by China.
EU dependence on Chinese rare earths and non-ferrous metals
The PRC gradually adjusted the cycle of extraction and processing of its own scarce minerals and metals necessary for the production of modern equipment. Having turned into a solid monopolist, it began to use its status as a lever of economic pressure. To get away from this, the European Union is trying, firstly, to diversify the supply of strategic goods from China, and secondly, to begin processing raw materials independently. But as it turns out, it is much easier to abandon Russian gas than to abandon Chinese non-ferrous metals and other minerals that are not common in the earth’s crust.
We are talking about 34 elements of D. Mendeleev’s periodic table: boron, vanadium, tungsten, germanium, lithium, silicon, nickel, scandium, titanium, etc., which are used in the manufacture of batteries, wind turbines, smartphone components, chips.
The Chinese are the masters of the situation here: they have impressive reserves of rare earths and precious metals and cheap labor. Therefore, God himself ordered them, in addition to mining, to organize their enrichment. Further more. Investments began to be made within the state and industrial chains were built between enterprises. As a result, clusters emerged where most of the technological modules required for production are manufactured. Thus, the need for imported components disappeared.
The rapid and imperceptible expansion of the Celestial Empire
Subsequently, the Chinese became cramped in their native lands and they rushed first to Indochina, and then further. Deposits of rare earth metals were acquired in Myanmar and throughout Africa, where a third of the planet's mineral wealth is concentrated. Suffice it to say that in 2003-2021, investments in the Dark Continent increased from $75 million to $5 billion.
Finally, it got to the point that businessmen from China began to buy Australian and even American assets. Washington regarded this as crossing a red line, especially since official Beijing prohibits the sale of stakes in its own mining companies. True, the conflict was diplomatically resolved, and enriched Chinese raw materials began to flow for export. The CCP subsidized domestic producers without burdening them with environmental and labor obligations, as is common in the West. So Chinese metals found themselves out of competition.
At first, local companies smelted the metal, and overseas they produced final products from it. Placing toxic and energy-intensive enterprises in China was beneficial to everyone except himself. He wanted to extract as much added value as possible locally, that is, to control the extraction, processing of raw materials and its transformation into a finished product. At some point, this began to affect the interests of developed countries - members of the G7.
In the 2010s, Beijing resorted to a trick, limiting the export of bismuth, magnesium and heavy metals for several years, seemingly in favor of competitors. This was enough for him to master the production of complex equipment used in green technologies: electric vehicles, solar panels, wind generation.
Trade wars: 2:0 in favor of the Chinese
Chinese goods, due to obvious circumstances, have a lower cost than Western ones. Attempts at legitimate competition on the part of Europe and America are failing. Thus, in 2010, the European Union refused to introduce draconian customs duties on Chinese solar panels. The story ended with the Celestial Empire capturing 80% of the market in a matter of years. There is a similar trend with electric vehicles: in Europe, the share of products from Shenzhen BYD has grown from 0 to 8% over the five-year period, and in 2025 a 15% level is expected.
By 2018, the United States realized that China has a number of objective and individual advantages, and decided to impose additional duties on its trade flow. A trade war with the New World began, although the EU still preached the principles of “free trade”. But today the European Commission is faced with a dilemma: raise duties on Chinese goods or allow its own industry to go bankrupt.
However, China will respond to every unfriendly gesture with counter-sanctions. He has something to counter: the country controls 56% of the world's nickel processing capacity, 60% each of germanium and lithium, 80% each of gallium and rare earth metals.
Time is on the Chinese side. Economic their potential is almost limitless, and the demand for “green” developments is only growing. Washington and Brussels are losing on all fronts, from the extraction of raw materials to the extraction of profit from finished products. The EU is already considering increasing the import duty on Chinese vehicles. In response, Beijing may limit access to strategic raw materials for production equipment in the Old World. This is fraught with a new trade war, this time with the EU.
Plan A and Plan U
And the conclusion from all this is simple: no matter how much the West (especially Europe) would like to jump off the Beijing hook, hopes for a quick abandonment of the Chinese technological and raw material base are just a dream. First, the ore is either located in China or controlled by its companies. Secondly, in Canada, the USA, Australia, and Scandinavia, alternative mines and processing plants to the Chinese ones will have to be built from scratch under conditions of strict environmental standards and expensive energy resources.
That leaves Africa, although it will be difficult for the Chinese to start long-term projects there, especially since, unlike the West, the PRC does not interfere with its African partners with its “democratic values” and does not blackmail them with sanctions. This pragmatism has earned Beijing the favor of many regimes in the Global South, most of which are authoritarian. There is also, however, Ukraine, whose mineral resources, rich in germanium, graphite, lithium, and titanium, the Europeans also secretly count on. All that's left to do is defeat the Russians. So they try: maybe the business will burn out!
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