COVID-19’s spread has played a key role in making technological competition the new crucial battlefield in the US-China rivalry. This article was originally published for Pandemic Discourses.
The COVID-19 pandemic has struck the world during a time when geopolitical realignments associated with China’s rise have become fully visible. What was once a policy of positive engagement with the People’s Republic of China (PRC) has now turned into a full-fledged adversarial confrontation led by the current United States (US) administration. The corridors of power in the US echo calls to immediately decouple particular sectors of its economy from China. This demand is more pronounced with respect to ensuring an unfettered access to critical minerals such as rare earths, lithium, and cobalt. How did critical minerals emerge as such an important issue amidst a global health crisis?
COVID-19’s spread has played a key role in making technological competition the new crucial battlefield in the US-China rivalry. The pandemic has accelerated the deployment of new 5G networks, high tech, and AI-based digital applications in multiple industries. It has triggered the fourth industrial revolution earlier than was anticipated. Attempts to keep the economy working as well as efforts to curb the virus have offered opportunities to deploy and test many new technologies. Entire sectors of the economy are now online allowing for the workforce to socially distance as much as possible to offset contagion. Students are either attending school online or trying hybrid methods depending on the levels of local infection. Moreover, the worsening climate crisis is dictating that the global economy needs to quickly decarbonize. Because of COVID-19, it has suddenly become more widely evident that China now holds a competitive edge in industrial internet, robotics, mobile e-commerce, and other important economic areas that include technologies for smart cities and surveillance. In China, amidst the crisis, new applications have found a perfect testing ground and 5G expansion has accelerated to meet growing demand for both remote work and healthcare.
“China has certainly been associating its leadership with an offer to help grow the economies of the developing world through the launch of its signature Belt and Road Initiative, just as Western attention has turned decidedly inward. Yet, in the decoupling discourse this aspect of the problem is barely addressed.”
These developments accelerated by COVID have put critical minerals center-stage in the growing technological competition among leading industrial nations (particularly the US) and China. Critical minerals, such as rare earths, lithium, and cobalt, are indispensable inputs for all these technologies. The drive to decarbonize and the contest for tech supremacy both depend on them. But, they are tremendously concentrated in a few global pockets. With spiking competition in global trade, the scramble to control their supply chains will only intensify.
COVID-19 has triggered unprecedented obstacles to free trade and engendered dramatic disruptions in supply chains, offering a first glimpse of what is to come if geopolitics become the major disruptor. Anticipating this potential outcome, frantic government voices are now calling for an immediate de-sinicization of supply chains but this cannot happen overnight. It is costly and it is complicated. While the United States is leading the charge, other major industrial actors—the European Union (EU) and Japan for instance—that are also heavily dependent on inputs and existing supply chains dominated by China are formulating new policies and weighing diversification options.
There is no escaping the fact, however, that most of the critical minerals themselves are located in the global south. Governments there are increasingly willing to work with the Chinese government and Chinese corporations. They have welcomed China’s one-stop shop financing schemes, technical expertise, increased engagement, and a narrative of “win-win partnerships” that offer a solid alternative to western funding and norm setting. Whether or not one agrees, China has certainly been associating its leadership with an offer to help grow the economies of the developing world through the launch of its signature Belt and Road Initiative, just as Western attention has turned decidedly inward. Yet, in the decoupling discourse this aspect of the problem is barely addressed. There is, of course, no shortage of criticism about China’s “true intentions” and the growing debt accrued when high cost infrastructure projects are commissioned. Still, China is there taking risks, engaging, and investing significantly in areas that other major actors and certainly many global private companies have long bypassed.
“The EU is finding that both in terms of development aid, trade, people-to-people relations, and investment, it is being quickly outpaced by the energy that China is putting into relationship building.”
Will merely criticizing China’s aid and development model help traditional industrial actors regain their edge in what is increasingly turning into a significant and long-term tension between the geographic concentration of critical resources and the growing competition for supply? In truth, it should not and will not be enough because conditions have flipped. Traditional industrial actors that as empires had historically locked in their economic supply chains and managed competition can no longer operate this way. Nor would their publics allow them to pursue such a strategy. We have, moreover, reached the end of the long post-1945 cycle of decolonization, where the United States was the global economic hegemon that backstopped the rules and norms of world trade.
While these truths are evident, political discourse and subsequent policy formulation have yet to reflect the realities of what constitutes a far-reaching reset in global relations. The EU has the most comprehensive relations with Africa, for instance, and has made significant efforts to re-imagine its relationship as one between equal partners. It is finding, however, that both in terms of development aid, trade, people-to-people relations, and investment, it is being quickly outpaced by the energy that China is putting into relationship building. Finding this to be a major problem, the EU is looking for ways to boost investment on the African continent by appealing to and incentivizing its private sector that is not so eager to take the plunge. Still, in order to build a greater consensus for strategic repositioning, the EU has heavily securitized the frame by which it seeks the necessary approval of its own members. Other nations, like Japan, are trying to offset the tsunami of Chinese engagement in Africa and elsewhere, but it is difficult with China’s rising and assertive power.
As the global economy struggles to find a new footing and anti-China rhetoric fuels competition in an already fraught environment, the sheer size and scope of the BRI may very well tilt the balance in PRC’s favor. China has already invested heavily in AI and 5G technology. Through the BRI it brings to the table the financing, relationships, and access to critical minerals and other vital resources that it will need to transform the developing world and outcompete its industrial rivals. In fact, the digital belt and road is China’s top priority and many of its tech companies already have a strong footprint across the physical space the BRI covers en route to Europe. These facts should not be ignored. New questions need to be asked in light of shifting power alliances, the global climate crisis, and the fourth industrial revolution. Magical thinking about overnight decoupling from China’s supply chains constitutes a costly pipe dream that seeks to overshadow the important conversation that includes a re-examination of traditional power relations and investment in the developing world.
COVID-19 has not only impacted our health, our livelihoods, and our mobility, it has also helped to demonstrate what has for some time been visible—that the 21st century is also China’s century. At the very least, as the traditional industrial actors redesign their economies in light of climate change and the fourth industrial revolution, geopolitics need to be reimagined in response to China’s resource domination and outreach to the developing world.
Sophia Kalantzakos is Global Distinguished Professor of Environmental Studies and Public Policy at New York University/NYU Abu Dhabi. She is currently a Fellow in the Research Institute for the History of Science and Technology at Caltech and the Huntington. She is the author of China and the Geopolitics of Rare Earths (Oxford University Press, 2018) and The EU, US, and China Tackling Climate Change: Policies and Alliances for the Anthropocene (Routledge, 2017).