However, the picture is very different when looking at components used to make weapons, as China accounts for 20% of total global manufacturing trade, according to Beijing’s own figures.
If Chinese parts and components were removed entirely from existing weapons and even from the international arms supply chain, it would wreak havoc on arms manufacturers around the world: makers of precision-guided missiles would struggle to get enough sensors, there might be a shortage of infrared lenses for night-vision goggles, and a shortage of bulletproof fabric would have a knock-on effect on supplies of bulletproof vests.
It is also possible that the war in Ukraine would come to an abrupt halt: much of the Western equipment being supplied to Ukraine, from Javelin anti-tank missiles to Patriot air defense systems, would cease to function, as would key parts of Russia’s arsenal, from drones to armored vehicles.
Lockheed Martin’s F-35 Lightning II, the workhorse stealth fighter for the U.S. and its allies, will see production lines halted and replacement parts for existing aircraft will be scarce.
The plane’s engines and flight control systems use critical high-performance magnets made from rare earth elements such as neodymium, dysprosium and praseodymium, all of which are sourced from China.
China also dominates the global rare earth processing industry, so alternative sources of these high-quality magnets are unlikely to be found anytime soon.
China “holds a near monopoly on gallium, a critical mineral used in the manufacture of sophisticated microchips that power some of America’s most advanced military technologies,” the Washington-based think tank Center for Strategic and International Studies said in a report last July.
China produces 98 percent of the world’s raw gallium and controls most of the gallium extracted from bauxite, according to the RAND Corporation. RAND also said China is home to 18 of the 37 minerals relevant to defense applications.
Advanced batteries, which U.S. Deputy Secretary of Defense Kathleen Hicks has described as “critical to thousands of military systems” including drones and electric vehicles, are another area where China dominates the supply chain, from mineral extraction, processing and component manufacturing to battery assembly.
The U.S. military supplies 94 percent of the world’s lithium hydroxide, 76 percent of its cells, and 76 percent of its electrolytes, according to a Department of Defense report released earlier this year that examined vulnerabilities in the U.S. military’s supply chain and pointed out ways to mitigate them.
When it comes to basic raw materials, China also dominates: The world’s second-largest economy is also the world’s largest producer of intermediate metal products essential to a wide range of weapons, producing more than the next seven largest countries combined.
China produces half of the world’s crude steel, the most aluminum and refined copper, and exports more than twice as much of these raw materials as the next-largest producer, according to data-data platform Statista.
China’s rapid growth in its electric vehicle industry is a further concern for Washington, which may be left behind when it comes to producing future military transport vehicles.
Given rising tensions between Washington and Beijing and the COVID-19 pandemic highlighting the obvious vulnerabilities of globalized supply chains, rebuilding domestic manufacturing and reducing over-reliance on China is a top priority for the United States across the political divide.
A month into his presidency, President Joe Biden signed an executive order to build “resilient American supply chains.”
While some key industries, such as laser and microwave weapons, remain dependent on China, direct supplies of some critical technologies, including nuclear weapons, space, artificial intelligence and advanced communications, fell significantly between 2020 and 2023, even as other sectors aim for a strong comeback after the pandemic, according to defense procurement intelligence firm Govini.
Timothy Heath, a senior international defense fellow at the RAND Corporation, said the United States and its allies face a “daunting challenge” to trace parts and components for weapons and platforms that may be made in China because of globalized production chains and complex subcontracting relationships.
“But the U.S. government appears determined to reduce vulnerabilities, and has ordered a major effort to relocate production of components from China to more friendly countries,” he said, adding that the success of the supply chain restructuring will depend on how quickly the U.S. can “identify and develop alternative sources of supply of rare earth elements and other critical materials.”
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China restricts exports of critical metals after Western semiconductor restrictions in latest trade war
China restricts exports of critical metals after Western semiconductor curbs in latest trade war
“both [the US and China] They will likely take steps to mitigate risks and, where possible, cut ties with other countries as a way to reduce vulnerabilities and ensure secure supply chains.”
In the case of rare earths, the “friendlier country” could be Australia, which has large reserves of several critical minerals and is already partnering with the United States in the development of “critical minerals” such as rare earths, tungsten and cobalt.
Other proposed measures include further investment in domestic manufacturing and small businesses, research and development, STEM education, industrial standardization, and collaboration with allies to address the country’s systemic industrial base challenges, including low production capacity, technology dependency, and labor shortages, as suggested by the Department of Defense’s 2022 Supply Chain Action Plan.
But China also has vulnerabilities, especially when it comes to chips.
The United States has moved to restrict China’s access to cutting-edge semiconductors and the equipment required to make them, pushing allies such as Japan and the Netherlands, which make key components, to follow suit.
While Beijing is trying to become more self-reliant in the sector by developing its own industry, mainland China currently imports almost half of the world’s semiconductor chips, many of which come from Taiwan.
Further complicating the situation, much of this is used to make electrical products and components that are then exported out of China, including to U.S. defense contractors.
According to Govini, 41% of semiconductors used in U.S. weapons systems and related infrastructure came from China last year.
They power some of America’s most advanced weapons, from warships including the Ford-class aircraft carriers, to stealth bombers, ballistic missiles, anti-ship missiles, and fighter jets.
In some cases, manufacturers also purchase components such as electronics, software, fuses, detonators and data links, according to the Defense Department report.
Eugene Goltz, an associate professor of political science at the University of Notre Dame in Indiana, said the relationship between the two countries is “not equally dependent” because the U.S. economy is more flexible and innovative than China’s and has more access to alternative sources of supply, but he said the U.S. still has a big advantage.
He also argued that Washington was on track to achieve its goal of military separation.
“The U.S. defense supply chain already has many reasons not to use many Chinese-made parts and materials, so while in effect the overall U.S. and Chinese markets are highly connected through trade and investment, the defense supply chain is largely ‘decoupled,'” Goltz added.
“When Chinese-made parts have been identified as being used in U.S. weapons systems, the U.S. and its major defense contractors have generally been able to find replacements.”
