China's industrial strategy threatens US economic security

In a recent government meeting, officials highlighted the growing concerns regarding the impact of the Chinese Communist Party's (CCP) industrial policies on global competition and American national security. The discussions underscored the short-term benefits of low consumer prices due to these policies, which are overshadowed by long-term risks for the United States.

A key point raised was the stark contrast in battery production costs, which are crucial for electric vehicles (EVs). In the U.S., the cost stands at $114 per kilowatt hour, significantly higher than China's $82 per kilowatt hour. This disparity is attributed to the lower costs of materials in China, which are approximately 30% cheaper. The meeting revealed that China has effectively dominated the global supply chains for refined minerals and battery components, controlling 28% of lithium mines, 41% of cobalt mines, and nearly 20% of copper mines worldwide.

The CCP's strategy involves setting specific goals through five-year plans, protecting its emerging industries from foreign competition via tariffs and investment restrictions, and providing extensive subsidies across the value chain. This approach allows Chinese firms to acquire foreign technologies, often through questionable means, and to innovate without the associated costs of legal intellectual property acquisition.

Once established in global markets, Chinese companies employ aggressive tactics such as overproduction and price manipulation to undermine competitors. The CCP's comprehensive strategy not only dwarfs the efforts of other nations but also aims to create a global monopoly in critical industries.

The meeting concluded with a call for a broader understanding of these dynamics, emphasizing the need for the U.S. to address the challenges posed by China's industrial policies to safeguard its economic and national security interests.