US-China Tech War Escalates
The Promethean War between Washington and Beijing is on a secular trajectory toward increasing friction.
As I’ve written in previous reports on what I call the Promethean War between the US and China, this dimension of the rivalry is defining their global influence. It will not be the industrial output or the sheer number of soldiers that will determine the outcome of a hegemon-defining war, but frontier technologies.
This shift in focus reflects a broader transformation in global power dynamics, where the race for technological superiority outweighs traditional measures of strength. The U.S.-China rivalry will therefore continue to disrupt technological supply chains vital to both economies’ strategic commercial and military objectives.
A Timeline of Escalation
The U.S.-China competition has intensified through a series of strategic moves and countermeasures over the last two years, particularly in the technology and resource sectors:
October 2022: U.S. Imposes Semiconductor Export Controls
The U.S. imposed sweeping restrictions on the export of advanced chips and semiconductor manufacturing equipment to China. These controls targeted China’s ability to produce high-performance AI systems, quantum computing technologies, and advanced military systems. By cutting off access to these critical technologies, Washington aimed to stall Beijing's ambitions in emerging technology sectors.
July 2023: China Tightens Control on Gallium and Germanium
Beijing retaliated with licensing requirements for the export of gallium and germanium, minerals essential for semiconductor production and high-frequency electronics. With China producing 80% of the world’s gallium and 60% of germanium, this move was calculated to disrupt global supply chains while signaling its leverage in critical resources.
October 2023: U.S. Expands the Entity List
Washington escalated by blacklisting 140 Chinese companies, restricting their access to U.S. technology and financial markets. This move directly targeted China’s semiconductor industry and its broader efforts to achieve technological self-sufficiency, signaling a deepening divide in the global tech supply chain.
December 2024: China Bans Exports of Gallium, Germanium, and Antimony
Earlier this month, China imposed a ban on exporting gallium, germanium, and antimony to the United States. This decision came shortly after Washington expanded its semiconductor restrictions, targeting 140 Chinese companies and tightening controls on advanced chipmaking tools and high-bandwidth memory. These minerals, critical for advanced electronics, renewable energy systems, and military technologies, became a focal point in Beijing’s response. The move reinforces China’s willingness to use its dominance in critical resources to counter escalating U.S. efforts to stymie its technological ambitions.
Technology as the Central Battleground
Semiconductors and artificial intelligence are at the heart of this rivalry, shaping both military and economic power. Chips, for instance, are indispensable for AI, telecommunications, autonomous vehicles, and precision weaponry. By restricting China’s access to these technologies, the U.S. aims to maintain its edge in both commercial innovation and defense capabilities. At this current point in time, China is only capable of producing legacy chips i.e. 7nm and above.
AI's transformative potential is particularly evident in defense. In simulations conducted by DARPA, AI-controlled jets consistently outperformed human pilots in tactical dogfights, showcasing AI's superiority in speed, adaptability, and precision. Such advancements highlight how AI can redefine military power, from autonomous drone swarms to AI-driven logistics and targeting systems. This underscores why Washington has placed technology at the center of its national security strategy.
China’s Dominance in Critical Minerals
China’s control over critical minerals amplifies its leverage in this competition. According to the U.S. Geological Survey, China dominates the global production and processing of several key resources:
Rare Earth Elements: China refines 85% of global rare earths, essential for high-performance magnets used in fighter jets, missile systems, wind turbines, and electric vehicles.
Gallium and Germanium: China produces 80% of gallium and 60% of germanium, both indispensable for semiconductors, fiber optics, and solar panels.
Lithium, Nickel, and Cobalt: China processes 59% of lithium, 68% of nickel, and 73% of cobalt, critical for batteries and renewable energy systems.
Rare earth magnets, for example, are central to advanced technologies. In defense, they power fighter jet engines, missile guidance systems, and precision-guided munitions. In renewable energy, they are used in wind turbine generators and electric vehicle motors, while consumer electronics rely on them for compact components like smartphone vibration systems.
Strategic Implications of China’s Ban
China’s December 2024 export ban on gallium, germanium, and antimony highlights its readiness to weaponize resource dominance. These minerals are indispensable for industries central to U.S. economic and military power, including semiconductors, green energy, and advanced defense systems. The ban signals Beijing’s intent to retaliate directly against U.S. restrictions, creating vulnerabilities in American supply chains.
For example, gallium and germanium are critical for high-performance semiconductors used in military radar systems, satellite communications, and 5G infrastructure. Without reliable access to these materials, U.S. manufacturers face potential disruptions that could ripple across industries.
A Secular Shift in Global Power Dynamics
The U.S.-China competition is not a transient dispute but a long-term trend reshaping global power structures. Control over semiconductors, AI, and critical minerals will determine the dominant players in the 21st-century global order. While traditional measures of power—like military size—remain relevant, the ability to innovate and secure strategic resources now defines leadership.
This shift is evident in the integration of AI into defense and industry. Nations with superior AI capabilities can deploy autonomous systems, optimize supply chains, and outmaneuver competitors in real-time decision-making. Similarly, control over critical minerals ensures leverage over technologies essential to renewable energy, defense, and communications.
The U.S.-China rivalry reflects a deeper, structural transformation in geopolitics. Technology and critical resources are not just tools of power; they are the foundation of future dominance. The competition over semiconductors, AI, and minerals like gallium and germanium is a microcosm of this broader contest.
Both nations recognize what is at stake. For the U.S., maintaining technological leadership and reducing resource dependency is imperative. For China, leveraging its mineral dominance and achieving technological self-sufficiency are central to its ambitions. This competition is not simply about bilateral tensions but about shaping the contours of global power for decades to come.
See previous related reports:
Supply Chain Shakeup: The US-China Mineral Competition
Securing the Silicon: US-China Battle for Semiconductor Supremacy
Biden EV Tariffs Echo Trump China Trade Policy
Why Geopolitics Will Matter for the Energy Transition
The Geopolitics of AI: Large Language Models
Battle of the Bytes: Too Little Too Late for China in AI US Face-Off