Opinion: Country needs to acknowledge China industrial threat

 

Last updated 9/26/2020 at 2:02pm



That U.S. industries are engaged in an uphill battle against China for global markets is due largely to the help Chinese companies get from huge government subsidies that have been dispensed for decades, to formidable effect.

The scale of the economic challenge to U.S. power — and jobs — is so vast that it’s something we ignore at our own peril. But questions remain as to whether the United States can regain a lead from a rival that is providing hundreds of billions of dollars to companies developing high-tech products ranging from semiconductors and telecommunications equipment to advanced nuclear plants and electric vehicles (EVs).

By all accounts, taking on China is an ambitious undertaking, because China has a grip on global production of many critically important minerals and metals. China, for example, controls 80% of the global supply of rare earth minerals, which are needed for everything from our weapons systems and consumer products such as flat-screen TVs to high-capacity batteries for EVs. Chinese manufacturers are given preferential access and pricing to materials that are the irreplaceable building blocks for production, putting U.S. rivals at considerable disadvantage. Concern about ensuring access to minerals has grown more intense since the trade dispute between the United States and China and the shock to global supply chains that came with the pandemic.


Let’s be direct about it: To counter China, we must invest in America. For the past year, Sen. Marco Rubio, R-Florida, has been maintaining that the government must identify the industries most critical to national security and economic growth, and spur investment in them, an approach he calls a “21st-century pro-American industrial policy.” Sen. Mitt Romney, R-Utah, has also spoken of the need to confront China’s “industrial predation” and move decisively to bring critical supply chains home.


Both the Trump and Biden campaigns are determined not to let additional U.S. manufacturing slip away to China. In Congress, even in an election year, conservatives and liberals alike are finding common ground under the banner of industrial policy and the need to ensure that the critical industries of today and tomorrow, and the jobs they support, are American industries and American jobs.

Sen. Elizabeth Warren, liberal Democrat from Massachusetts, is cosponsor of a Rubio bill to ensure that drugs bought by federal health care systems like Veterans Affairs are made entirely in the U.S. And this summer, the Senate voted on legislation that would direct billions of dollars to semiconductor manufacturers who face murderous competition from other countries, particularly China.


This new common ground around industrial policy is encouraging and necessary but the steps forward haven’t yet begun to touch what is required to win this economic race. Decisive action is needed to reshore manufacturing and rebuild the essential supply chains that have withered under policy neglect.

Addressing China’s alarming control of global supplies of critical minerals and metals, and the processed materials derived from them, needs to be an immediate priority. The U.S. is rich in mineral wealth but a broken mine permitting system has seen domestic mining investment dry up and U.S. mineral import reliance nearly double over the past two decades. The U.S. is now import reliant on nearly 50 key minerals and metals.


Legislation exists to achieve the permitting reform our mining sector requires. Cutting red tape and improving the competitiveness of U.S. industry is an important step but we must also incentivize U.S. manufacturers to use U.S.-produced materials, mined and refined under world-leading environmental and labor standards simply absent in China and Chinese-controlled mines across much of the developing world.

Rebuilding the American mining and mineral processing sectors will achieve supply chain security and go far in confronting the immense geopolitical and economic leverage Beijing has worked tirelessly to cultivate.

America can win the race for the critical industries of this century but we can only do it if we acknowledge the threat posed by China’s industrial policies and meet them head on.

Jim Constantopoulos is a geology professor at Eastern New Mexico University. Contact him at:

[email protected]

 
 

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