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US-China Tech War: The Need for a Pragmatic Approach



The continuous technology competition and decoupling between the United States and China have reached a turning point, with negative repercussions for both countries. Recent events, such as China's export restrictions on essential rare earth metals like gallium and germanium, have increased tensions and shown how precarious the situation is.


The creation of microchips, high-tech defence equipment, and renewable energy all depend heavily on rare earth minerals. Electric vehicles and solar and wind energy systems both largely rely on these minerals. For the manufacture of microchips, gallium and germanium are necessary, but rare earth minerals are necessary for cutting-edge defence systems. Controlling the production and distribution of these minerals thus gives one a considerable competitive advantage in the world's technical environment.


Due to its production of 60% of the world's germanium and 80% of its gallium, China enjoys a major competitive edge in the rare earths market. Additionally, 90% of rare earth minerals are processed in China, which puts the US at a significant disadvantage given the present set of technical prohibitions. China has demonstrated its willingness to use this supremacy as leverage in reaction to US measures with its recent announcement of export limits.


The majority of China's retaliatory actions have already been felt by the US technology sector. Certain US industrial industries run the risk of coming to a complete stop if rare earth material limitations are put in place. For example, the chief executives of well-known computer firms like Intel and Nvidia have lobbied the Biden administration to relax semiconductor restrictions against China.


Sanctions-based tactics have failed to influence regime changes or force policy changes, as intended outcomes. China has responded with its own counter-sanctions after the US previously deployed broad export control measures for ideological and geopolitical goals. Such a tit-for-tat strategy merely heightens tensions and widens the gap between the two countries.


The colonial goals of the current US foreign economic policy, which is heavily dependent on sanctions, have not appeared to be achieved. Sanctions have not succeeded in overthrowing governments as anticipated despite being used repeatedly to effect change in other nations. Instead, it has significantly worsened hardship for communities that are already at risk, leaving little to show for the efforts.


It is a fanatical illusion to believe that the US can easily break off trade ties with China without triggering a global economic collapse. Furthermore, it is equally foolish to believe that military aggression against China can happen without catastrophic repercussions for both countries. Such aggressive actions are illogical and ignore the potentially fatal consequences for millions of lives.


The future road currently remains uncertain, with potentially serious repercussions for both countries. To stop further escalation and build a positive future, diplomatic and commercial interactions must be approached with more creativity and morality.

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