How China got the US over a rare earth barrel
Who's gonna tell you when it's too late?
Who's gonna tell you things aren't so great?
You can't go on, thinking nothing's wrong, but now
Who's gonna drive you home tonight?
– The Cars
'Just when I thought I was out,' Michael Corleone lamented, 'They pull me back in.'
This column was originally intended to be about the lamentable state of America's rare earths dependency and how decades of delusional thinking – 'Rare earths are not rare!', 'We taught China rare earth processing!' – led to the current predicament.
But who cares about rare earths now; the Middle East is once again a conflagration likely to ruin all of US Under Secretary of Defense for Policy Elbridge Colby's best-laid pivot to Asia plans whether President Donald Trump drops that 30,000-pound bomb on Iran or not. The Persian Gulf and Eastern Mediterranean will tie down US naval assets for another decade.
Michael Corleone's fatal flaw was that he did not understand what business he was in. He was a gangster, and there is no escape from murder, death and ruin in that line of work. Karma came for Philip Tattaglia, Barzini, Cuneo, Stracci, Moe Green and Hyman Roth. Why would it be any different for Michael and the Corleone family?
Since the end of World War II, the United States has run a maritime empire and there is no escape from entanglement, overstretch and ruin in that line of work. Karma came for the Minoans, Phoenicians, Italian merchant states, Portuguese, Spanish, Dutch, British and Japanese empires. Why would it be any different for America?
The reason the US is dependent on China for rare earth elements is that ores with extractable concentrations are, in fact, rare and processing these ores into usable concentrates is, in fact, incredibly difficult.
The purpose of maritime empires is to harvest wealth from far-flung imperial possessions – or, more palatably, a rules-based international order. This need not be as self-serving as it sounds.
Japan was allowed to have a very nice four-decade-long run between 1945 and 1985. Europe got the Marshall Plan and eight decades of security, allowing the old country (literally) to fund generous pension and welfare programs. Nixon's rapprochement with Mao removed the US Seventh Fleet as a Pacific threat, paving the way for China's coastal industrialization.
In return, the US got decades of Middle Eastern oil arguably for free (crude oil paid for in dollars recycled into US investments). America also got manufactured goods from Asia and Europe on the same trade and creamed off the best and brightest from all corners of the world to become the empire's minions.
All of the above should be grounds for celebration. It's all America could have asked for as a maritime empire. And yet, we are all familiar with the downsides. Maritime empires contain the seeds of their own destruction, magnifying capitalism's iniquities as wealth concentrates in ever fewer hands.
Karl Marx wrote 'Das Kapital'at the height of the British Empire, showcasing brutal exploitation in Britain's own factories. The Trump presidency (both terms) is a reaction to America's neglected working class.
The reason the US is dependent on China for rare earth elements is because processing technology has advanced multiple generations in the past two decades. The majority of the world's rare earths are now processed in Baotou Inner Mongolia, largely using third-generation sulfuric acid roasting technology, having long ago abandoned polluting in-situ leaching.
Because of unavoidable foreign entanglements, maritime empires are not able to enjoy what should be a major perk of hegemony – to not have to expend resources on the military.
The spoils of maritime empires can only be collected with expensive navies and far-flung bases if not occasional (perhaps continual) spillage of blood. And America's collected spoils have, of late, not been well distributed among the citizenry, particularly among those asked to do the bleeding.
Mischief is irresistible for empires with forward-deployed militaries. The US has conducted about 200 military interventions since the end of WWII, 50 since the end of the Cold War.
The most significant of these have been abject disasters – Vietnam, Iraq and Afghanistan – draining the empire of blood, treasure, domestic vitality and international goodwill. Mischief is once again at work, enticing America back into the Middle East just a few short years after humiliatingly crashing out of Afghanistan.
America's pivot to Asia will never happen, just like Michael Corleone could never extricate the family business from its criminal past. The empire has collected too many barnacles.
This is the exact opposite of the domino theory. It does not get easier. At some point, foreign entanglements stop benefiting the empire and become, at best, leeches and, at worst, ruinous distractions.
The US, bled dry by two decades of never-ending wars, can only pivot to Asia by abandoning the Middle East and Ukraine. But like bickering concubines, manipulative allies conspire for the emperor's favor. In every stable of concubines, there is always a favorite who outmaneuvers the rest and imposes her will on a besotted emperor.
America's Wu Zetian just unleashed a surprise attack on Iran demanding the emperor's total attention, leaving beautiful, faithful, innocent and delicate Taiwan to twist in the wind.
The US is dependent on China for rare earth elements because rare earth chemistry programs are offered at dozens of Chinese universities versus none in the US.
China has produced over 50,000 rare earth patents in the past two decades versus a de minimis number anywhere else. Cutting-edge science in the field is published in a handful of dedicated Chinese rare earth journals.
China does not do foreign entanglements. Historically, China expanded organically by incorporating different polities into the Chinese state. That is what makes China China.
Unlike maritime empires, the entire purpose of the Chinese state is to harness the major perk of hegemony– not having to waste resources on the military and, instead, deploy them on public works projects, from Yellow River dykes to high-speed rail.
In the early 15th century, after commissioning seven magnificent imperial treasure voyages over three decades, reaching as far west as the east coast of Africa and establishing China as the world's pre-eminent seafaring nation, the Ming Dynasty court suddenly turned its back on maritime power.
Historians have asked why ever since. Whether it was economics, Confucian conservatism or banal power struggles, abandoning maritime power set China up for European and Japanese predation in the 19th and 20th centuries.
In a full accounting of history, maritime empires have not fared much better. Competition for overseas assets led to the slaughter of two World Wars, immolating much of Europe's accumulated wealth. Imperial possessions, acquired over a span of four centuries, evaporated in the blink of a few decades.
The reason the US is dependent on China for rare earth elements is because of a maddening inability to concentrate. The US has known of its risky reliance on China for rare earths for two decades.
In 2010, China weaponized its rare earth stranglehold on Japan during an East China Sea border dispute. In 2019, after President Trump launched a trade and tech war, China State Television not so subtly broadcast President Xi Jinping's visit to a rare earth processing plant. And somehow, in 2025, China has become an even more dominant supplier of rare earth elements.
In all these instances, the exact same narratives were parroted by the English media – rare earths are not actually rare, China dominates rare earth processing because it is polluting, the US transferred rare earth processing technology to China. These shibboleths, which fall apart on close scrutiny, have tied America's hands for two decades.
Halfhearted efforts to resolve the problem fell by the wayside when China refrained from pulling the rare earth trigger – until now, in 2025, when China is putting the squeeze on rare earth exports for military use just as strategic competition with the US is entering its most intense phase and right when conflicts in Israel and Ukraine are consuming an inordinate amount of military hardware.
Like Michael Corleone, the US tried to convince itself that it was in a different business. 'The Godfather' is a tragedy worthy of – and rhyming with – both 'Macbeth' and 'King Lear.' Michael was blinded by ambition, thought of himself as more than a gangster and ultimately brought ruin onto himself and the Corleone family.
The US consciously chose to be a maritime empire, stationing troops in 800 bases across the world, and then convinced itself that it was more than just an extractive empire, above the nitty-gritty, dirty work of resource extraction and immune from manipulation by vassals. Let us hope that this does not end in a Godfather-esque tragedy.
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Asia Times
15 hours ago
- Asia Times
How China got the US over a rare earth barrel
Who's gonna tell you when it's too late? Who's gonna tell you things aren't so great? You can't go on, thinking nothing's wrong, but now Who's gonna drive you home tonight? – The Cars 'Just when I thought I was out,' Michael Corleone lamented, 'They pull me back in.' This column was originally intended to be about the lamentable state of America's rare earths dependency and how decades of delusional thinking – 'Rare earths are not rare!', 'We taught China rare earth processing!' – led to the current predicament. But who cares about rare earths now; the Middle East is once again a conflagration likely to ruin all of US Under Secretary of Defense for Policy Elbridge Colby's best-laid pivot to Asia plans whether President Donald Trump drops that 30,000-pound bomb on Iran or not. The Persian Gulf and Eastern Mediterranean will tie down US naval assets for another decade. Michael Corleone's fatal flaw was that he did not understand what business he was in. He was a gangster, and there is no escape from murder, death and ruin in that line of work. Karma came for Philip Tattaglia, Barzini, Cuneo, Stracci, Moe Green and Hyman Roth. Why would it be any different for Michael and the Corleone family? Since the end of World War II, the United States has run a maritime empire and there is no escape from entanglement, overstretch and ruin in that line of work. Karma came for the Minoans, Phoenicians, Italian merchant states, Portuguese, Spanish, Dutch, British and Japanese empires. Why would it be any different for America? The reason the US is dependent on China for rare earth elements is that ores with extractable concentrations are, in fact, rare and processing these ores into usable concentrates is, in fact, incredibly difficult. The purpose of maritime empires is to harvest wealth from far-flung imperial possessions – or, more palatably, a rules-based international order. This need not be as self-serving as it sounds. Japan was allowed to have a very nice four-decade-long run between 1945 and 1985. Europe got the Marshall Plan and eight decades of security, allowing the old country (literally) to fund generous pension and welfare programs. Nixon's rapprochement with Mao removed the US Seventh Fleet as a Pacific threat, paving the way for China's coastal industrialization. In return, the US got decades of Middle Eastern oil arguably for free (crude oil paid for in dollars recycled into US investments). America also got manufactured goods from Asia and Europe on the same trade and creamed off the best and brightest from all corners of the world to become the empire's minions. All of the above should be grounds for celebration. It's all America could have asked for as a maritime empire. And yet, we are all familiar with the downsides. Maritime empires contain the seeds of their own destruction, magnifying capitalism's iniquities as wealth concentrates in ever fewer hands. Karl Marx wrote 'Das Kapital'at the height of the British Empire, showcasing brutal exploitation in Britain's own factories. The Trump presidency (both terms) is a reaction to America's neglected working class. The reason the US is dependent on China for rare earth elements is because processing technology has advanced multiple generations in the past two decades. The majority of the world's rare earths are now processed in Baotou Inner Mongolia, largely using third-generation sulfuric acid roasting technology, having long ago abandoned polluting in-situ leaching. Because of unavoidable foreign entanglements, maritime empires are not able to enjoy what should be a major perk of hegemony – to not have to expend resources on the military. The spoils of maritime empires can only be collected with expensive navies and far-flung bases if not occasional (perhaps continual) spillage of blood. And America's collected spoils have, of late, not been well distributed among the citizenry, particularly among those asked to do the bleeding. Mischief is irresistible for empires with forward-deployed militaries. The US has conducted about 200 military interventions since the end of WWII, 50 since the end of the Cold War. The most significant of these have been abject disasters – Vietnam, Iraq and Afghanistan – draining the empire of blood, treasure, domestic vitality and international goodwill. Mischief is once again at work, enticing America back into the Middle East just a few short years after humiliatingly crashing out of Afghanistan. America's pivot to Asia will never happen, just like Michael Corleone could never extricate the family business from its criminal past. The empire has collected too many barnacles. This is the exact opposite of the domino theory. It does not get easier. At some point, foreign entanglements stop benefiting the empire and become, at best, leeches and, at worst, ruinous distractions. The US, bled dry by two decades of never-ending wars, can only pivot to Asia by abandoning the Middle East and Ukraine. But like bickering concubines, manipulative allies conspire for the emperor's favor. In every stable of concubines, there is always a favorite who outmaneuvers the rest and imposes her will on a besotted emperor. America's Wu Zetian just unleashed a surprise attack on Iran demanding the emperor's total attention, leaving beautiful, faithful, innocent and delicate Taiwan to twist in the wind. The US is dependent on China for rare earth elements because rare earth chemistry programs are offered at dozens of Chinese universities versus none in the US. China has produced over 50,000 rare earth patents in the past two decades versus a de minimis number anywhere else. Cutting-edge science in the field is published in a handful of dedicated Chinese rare earth journals. China does not do foreign entanglements. Historically, China expanded organically by incorporating different polities into the Chinese state. That is what makes China China. Unlike maritime empires, the entire purpose of the Chinese state is to harness the major perk of hegemony– not having to waste resources on the military and, instead, deploy them on public works projects, from Yellow River dykes to high-speed rail. In the early 15th century, after commissioning seven magnificent imperial treasure voyages over three decades, reaching as far west as the east coast of Africa and establishing China as the world's pre-eminent seafaring nation, the Ming Dynasty court suddenly turned its back on maritime power. Historians have asked why ever since. Whether it was economics, Confucian conservatism or banal power struggles, abandoning maritime power set China up for European and Japanese predation in the 19th and 20th centuries. In a full accounting of history, maritime empires have not fared much better. Competition for overseas assets led to the slaughter of two World Wars, immolating much of Europe's accumulated wealth. Imperial possessions, acquired over a span of four centuries, evaporated in the blink of a few decades. The reason the US is dependent on China for rare earth elements is because of a maddening inability to concentrate. The US has known of its risky reliance on China for rare earths for two decades. In 2010, China weaponized its rare earth stranglehold on Japan during an East China Sea border dispute. In 2019, after President Trump launched a trade and tech war, China State Television not so subtly broadcast President Xi Jinping's visit to a rare earth processing plant. And somehow, in 2025, China has become an even more dominant supplier of rare earth elements. In all these instances, the exact same narratives were parroted by the English media – rare earths are not actually rare, China dominates rare earth processing because it is polluting, the US transferred rare earth processing technology to China. These shibboleths, which fall apart on close scrutiny, have tied America's hands for two decades. Halfhearted efforts to resolve the problem fell by the wayside when China refrained from pulling the rare earth trigger – until now, in 2025, when China is putting the squeeze on rare earth exports for military use just as strategic competition with the US is entering its most intense phase and right when conflicts in Israel and Ukraine are consuming an inordinate amount of military hardware. Like Michael Corleone, the US tried to convince itself that it was in a different business. 'The Godfather' is a tragedy worthy of – and rhyming with – both 'Macbeth' and 'King Lear.' Michael was blinded by ambition, thought of himself as more than a gangster and ultimately brought ruin onto himself and the Corleone family. The US consciously chose to be a maritime empire, stationing troops in 800 bases across the world, and then convinced itself that it was more than just an extractive empire, above the nitty-gritty, dirty work of resource extraction and immune from manipulation by vassals. Let us hope that this does not end in a Godfather-esque tragedy.
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From 1565 to 1815, Manila served as a global entrepot, facilitating trade between China and Europe via ocean-going galleons built by Filipino craftsmen. This made the city home to the oldest Chinatown. Intermarriages during the Spanish colonial period gave rise to a mestizo class, from which many national heroes, such as Jose Rizal and Andres Bonifacio, hail. During World War II, ethnic Chinese guerrilla units, such as the Wha-Chi, joined the underground resistance. The Cold War put the Philippines and China in opposite camps. But in a bold stroke, Marcos Sr breached that divide. He ended Peking's support to local communist rebels and got petroleum from China as a global oil crisis raged. He gave citizenship to ethnic Chinese in the country through naturalization, paving the way for their integration into Philippine polity. With their legal status secured, some of these Chinese entrepreneurs would later become taipans and philanthropists, giving back to their new homeland. They were also among the pioneer investors during the early years of China's reform and opening up, helping the land of their forebears. Marcos Sr also staked the country's claim in the Spratlys, occupying large atolls that form the nucleus of the country's smallest town. Manila began exploring oil offshore west Palawan. Thus, Marcos' astute move gave social, economic and security gains for his country. He laid the foundation for diplomatic ties with a big neighbor that would soon become the world's largest manufacturing and trading nation. China recognized the elder Marcos' contribution. To this day, the only country that set up a consulate in Laoag, Marcos' bailiwick, is China. Amid the current turbulence in bilateral relations, there are attempts to revive the ideological rhetoric to frame the gap between the two sides. But ideology is not an issue. It never was when Manila established ties with Peking in 1975. And China is still governed by the same political party whose leaders—Mao Zedong and Zhou Enlai—Marcos Sr shook hands with, although the ruling party has also transformed to meet the times. The normalization of ties occurred as China embarked on game-changing market reform, turning it into the greatest economic miracle and catapulting it to become the world's second-largest economy. Since 2016, China has become the Philippines' largest trade partner, major investor and infrastructure builder. Thus, seeing China from an ideological lens represents a bygone era that should be discarded. Lost, if not marginalized, in the country's current China policy is economics. Understandably, defense and military officials may be wired to view China from a certain angle. Regrettably, while this angle alone does not capture the totality of ties with China, it has become the privileged view, dominating the public narrative and heavily influencing policy. Economic managers who understand the gains from Chinese trade, tourism, investment, infrastructure and technology are largely marginalized. This leads to an unbalanced appreciation of overall relations. The cost of toxic ties and fixation with the intractable sea spat is palpable. From a historic high of 1.7 million in 2019, Chinese tourist arrivals to the Philippines dropped to just 300,000 last year. This is despite the rebound of Chinese outbound tourism, from which many of its ASEAN neighbors received a windfall. Chinese tourists surged in Thailand (6.7 million), Vietnam (3.73 million), Malaysia (3.29 million) and Singapore (3.08 million). Obsessive advertisement of the sea disputes, stringent visa requirements and safety concerns dissuaded Chinese travelers from the Philippines. In the agriculture space, from supplying 70% of China's imported bananas in 2017, the Philippines' top position was eroded and overtaken by others. Vietnam now supplies 50% of the China market. Unlike in 2012, China has not imposed curbs on Philippine fruit exports, but it increased intake from others. While the debt trap or pledge trap tale captured an audience in the Philippines and made the government hesitant about pursuing major infrastructure works with China, railway projects were delivered in Vietnam, Laos and Indonesia. The East Coast Rail Link in Malaysia is set to be completed next year and the Kunming-Haiphong high-speed railway was discussed during President Xi Jinping's visit to Vietnam last April. In contrast, three railway projects negotiated during the previous Rodrigo Duterte government were scuttled with no concrete alternatives to date. Chinese investors came despite political risks even before the Philippines made significant changes to its foreign investment regime. The National Grid Corporation of the Philippines, where China's State Grid has a 40% stake, completed the Luzon-Visayas-Mindanao single transmission network last year. China Telecoms made a 40% share in the country's third telco player to break the duopoly and improve competition. The China-backed Kaliwa Dam, which will enhance Metro Manila's water security, is expected to be turned over by 2027. Chinese contractor EnergyChina was tapped to build what is being touted as the world's largest solar farm set to rise in central Luzon. Chinese capital can address perennial investor complaints about the cost and supply of power and basic utilities, thus improving the country's attractiveness to domestic and foreign investment. Hence, Manila should avoid overly securitizing Chinese infrastructure deals. Finally, the Philippines is worryingly losing out from evolving regional production and supply chains. Chinese overcapacity is moving into Southeast Asia to produce and sell in the region and beyond. This is upgrading the manufacturing muscle of its ASEAN neighbors. It is turning Indonesia from a raw nickel ore exporter to a processor, fueling the country's ambitions to produce electric batteries and, eventually, electric cars. From steel and solar panels, Chinese firms have moved to produce EVs and parts in the region. BYD already has an EV factory in Thailand, an electronics factory in Vietnam and soon an EV factory in Indonesia. Another Chinese brand, Geely, invested in Malaysia's carmaker Proton. VinFast, Vietnam's homegrown EV, whose taxi fleet already plies the streets of several ASEAN capitals, relies on Chinese components and parts, including batteries. In the Philippines, modernizing public utility vehicles and building an EV charging network are areas where Chinese companies can come in. In sum, the past offers lessons that the present should reflect on to shape a better future. In 1975, Marcos Sr seized the moment. Fifty years forward, his son can too. Lucio Blanco Pitlo III is president of the Philippine Association for Chinese Studies, vice president of the Peking University Alumni Association of the Philippines, and lecturer at the Ateneo de Manila University's Chinese Studies Program.
