The conflict between Beijing and Washington is no longer merely a traditional trade war. It has evolved into a global economic competition dominated by interests and supply chains, based on "interconnected deterrence" rather than "destructive deterrence."
Both sides possess tools that can cause pain to the other, but if fully utilized, they could have counterproductive effects on both economies. Therefore, the two countries are moving toward limited, repeated escalations to create controllable disruptions, which do not lead to total collapse but instead reshape the balance of influence through carefully planned sustained pressure.
In this confrontation, the goal is no longer to destroy the opponent, but to suppress them through partial attrition, forcing them to gradually yield while keeping trade and financial channels open.
Therefore, disruption itself has become a purposeful tool used to force the other side to adapt, rather than surrender.
Interdependence as a Double-Edged Weapon
Economic interdependence between China and the United States has become a weapon for mutual pressure. Rather than seeking to reduce interdependence, both countries use this interdependence to attack each other from within.
Both sides realize that any major collapse in one economy would immediately affect the other. Therefore, the standard for measuring tactical gains today is a country's ability to create chaos, not its ability to avoid chaos.
Both leaders face a dilemma: escalation is crucial for maintaining political credibility.
Beijing believes that testing Washington's capacity to endure pain may force it to make concessions, while Washington tends to conflate pressure with strategy, transforming bilateral relations into an open confrontation, where dialogue is used as a tool for pressure, not appeasement.
Setting the Pace: Escalation, Then Containment, Then Stability
Despite the escalation of the situation, the continuous summits and communications between the two sides reveal a deeper truth: confrontation has become part of the arrangement, not a deviation. The current dominant rhythm is based on three recurring phases: escalation, then containment, then temporary stability.
At first glance, it seems chaotic, but essentially it is an organized system of confusion, where both sides test each other's limits without breaking the rules or damaging the relationship.
Beijing adopts a strategy of tactical attrition rather than full-scale confrontation. It does not aim to destroy the U.S. economy, but to disrupt its key sectors, forcing it to negotiate from a weaker position.
China's Weapons in Economic Confrontation
Beijing's strategy is one of tactical attrition rather than full-scale confrontation. It does not aim to destroy the U.S. economy, but to disrupt its key sectors, forcing it to negotiate from a weaker position. This strategy is based on seven major economic weapons:
1. Rare Earth Metals and High-Performance Magnets
These are the vanguard of Beijing's economic arsenal. China controls about 85% of rare earth metal processing globally and about 92% of high-performance magnet production, ensuring that around 90% of the supply of certain key elements needed for defense and technology industries is under its control.
Rare earth minerals have become a key factor in China's industrial influence and one of its most powerful weapons globally (Reuters)
This allows the U.S. to impose restrictions on the export of sensitive materials, including aircraft components, batteries, and chips, and to strengthen government approvals.
This led to a fivefold increase in the price of certain materials, and in extreme cases, the price of samarium increased by 60 times.
Given that the U.S. F-35 fighter jet requires over 400 kilograms of such metals from more than 1,000 external suppliers, any bottleneck in the supply chain would disrupt plans and increase costs. It is estimated that it would take the U.S. 15 to 20 years to achieve self-sufficiency in these materials.
2. Chips and Semiconductors
The chip industry relies on rare earth elements such as gallium, germanium, and yttrium, with China producing 98% and 68% of the global output of gallium and germanium, respectively.
This gives Beijing almost complete control over raw materials critical to the high-tech industry.
China also has about 15% of global chip manufacturing capacity, while the U.S. has only 12%, lower than 37% in the 1990s.
Beijing uses this dominance to strategically design manufacturing bottlenecks at the assembly and processing stages, increasing costs and delaying deliveries without completely shutting down the system.
China has approximately 15% of global chip manufacturing capacity, while the U.S. has 12%, lower than 37% in the 1990s.
3. Solar Components
China dominates over 80% of the solar manufacturing process, from silicon wafer processing to the production of silicon ingots and wafers, and finally to the assembly.
China's share of the global polysilicon production is close to 95%, meaning that any strict testing or regulations could slow down Western energy transition projects and significantly increase their costs.
4. Graphite and Carbon Materials
Graphite is a key material for batteries, especially for anodes. China controls 70%-90% of global graphite production and processing.
Any measures to restrict graphite exports would lead to increased battery costs and slowed electric vehicle production, affecting the green transition plans of the U.S. and Europe.
5. Agriculture: Soybeans as an Example
Soybeans are one of the most prominent agricultural pressure tools for Beijing. Beijing has stopped purchasing soybeans from the U.S. and shifted its focus to countries like Brazil, causing liquidity and marketing crises for American farmers and prompting Washington to launch a support package exceeding $50 billion to mitigate the impact.
This shows that agricultural issues have become a headache for domestic pressure in the U.S.
Soybeans are no longer just a crop, but a political leverage within American farms (Reuters)
6. Aviation and Drone Component Chains
Beijing controls 70%-80% of the global drone, advanced camera, and guidance system market.
It is expected that the Chinese drone market will reach $9.7 billion by 2024 and $22 billion by 2030.
Any tightening of licenses for sensitive components would lead to costly delays in delivery and maintenance in Western industrial sectors.
7. Managing Inventory and Strategic Commodities
China uses its vast reserves of copper, aluminum, grain, and oil as tools to influence global prices. When China increases its purchase speed, prices rise; when China releases inventory, prices fall.
This policy enables it to disrupt global markets, control the pace of inflation and exchange rates, making it an economic participant that leads rather than follows.
China uses its vast reserves of copper, aluminum, grain, and oil as tools to influence global prices. When China increases its purchase speed, prices rise; when China releases inventory, prices fall.
Future Scenarios of Confrontation
The future path between the two countries can be divided into seven scenarios:
- Controlled Chaos: Limited and ongoing escalations, making turbulence a part of the global economic system.
- Economic Coexistence: Intermittent tensions, but not a breakdown, and a fragile peace based on balanced pressure and de-escalation.
- Conditional Ceasefire: Major escalations force both sides to reach temporary, partial agreements, temporarily restoring trade.
- Counter-Alliance: Washington establishes a network of alternatives with allies, gradually weakening China's influence.
- Economic Cold War: Two parallel economic blocs emerge, one led by the U.S., the other by China.
- Severe Escalation: Both sides impose financial sanctions and local currency wars, leaving wounds on their economies.
- Chaotic Scenario: Escalation gets out of control, disrupting supply chains and market confidence.
Top 8 Rare Earth Producing Countries (Thousand Metric Tons)
Top 8 Rare Earth Producing Countries (Thousand Metric Tons)
Mastering Suffering, Not Avoiding It
The contest between Washington and Beijing is a race to master suffering, not to avoid it. Washington possesses tools to exert financial and technological pressure through the dollar and technology, but the key to raw materials and production chains leans towards China, which has established its influence within scarcity and supply networks.
Beijing is steadily and silently acting, limiting the export of metals, magnets, and batteries, extending customs clearance times, and using its strategic reserves to create controlled disruptions, confusing opponents without closing the door.
In contrast, Washington appears to be less tolerant of escalation and slower to find alternatives, giving China an advantage in the current stage of "entangled deterrence."
The measure of victory is not who shouts louder, but who has a viable alternative and is prepared for scarcity in advance.
The contest between Washington and Beijing is a race to manage suffering, not to avoid it. Washington possesses tools to exert financial and technological pressure through the dollar and technology, but the key to raw materials and production chains lies in China's hands, and China has already established its own influence within scarcity and supply networks.
Sources: Al Jazeera
Original article: https://www.toutiao.com/article/7564614646578151970/
Statement: This article represents the views of the author and readers are welcome to express their opinions by clicking on the [Like/Dislike] buttons below.