China has managed to become the giant we know today: it controls the processing of critical minerals, leads the manufacturing of batteries and builds 74% of the planet’s renewable energy. However, behind this imposing façade of self-sufficiency, the Asian giant hides an Achilles heel that its propaganda tries to silence: a critical dependence on the technology, machinery and intellectual property of the West it is trying to displace.
The paradox of Chinese dominance. For decades, the West operated under a mirage. As analyst Gillian Tett explains in the Financial TimesWestern elites assumed that making things was low-margin “dirty work” that could be outsourced. While the world became obsessed with software and code, China was quietly building the physical infrastructure of the 21st century. Today, Beijing holds what investor Craig Tindale calls “processing sovereignty”: it controls 98% of gallium, 90% of rare earths and 95% of polysilicon.
But this domain is incomplete and vulnerable. The recent failure of the Chinese company Defu Technology in its attempt to acquire the Luxembourg Circuit Foil for $204 million – blocked by the Luxembourg government – has shown that China is not self-sufficient in high-precision components. Despite its trade balance reaching a record surplus, Beijing was forced to import $1.3 billion in advanced copper sheets last year alone, a discreet but vital input for its next-generation electric vehicles to even turn on.
The “brain” is still foreign. The dependency is deeper than it seems. A report from Tsinghua University reveals devastating data: the Chinese wind industry still imports 60% of its rotor bearings, 70% of the transistor modules for the electrical grid and, most surprising, 100% of the logic modules that control the turbines in real time. Aware of this “bottleneck,” President Xi Jinping has personally pressured its manufacturers to “master key technologies.” The effort is bearing fruit—state media reports that national bearing production rose to 60% in record time—but the gap in high-end electronics remains the big handbrake.
Even in cutting-edge sectors like green hydrogen, where Beijing has massive plans, a study published in International Journal of Hydrogen Energy underlines that Chinese industry is struggling to abandon its dependence on foreign-made proton exchange membranes. Beijing has the factories, but the West still has the “brains” and the fine chemistry that makes the machines work.
From the “Malacca Dilemma” to resource nationalism. To understand Xi Jinping’s movement of pieces, you have to go back to 2003. Then, leader Hu Jintao coined the “Malacca Dilemma”: the fear that a hostile power would block the strait through which almost all the oil China consumes passes. The commitment to clean energy was not only a climate issue, but a national security strategy to break that chain.
However, in trying to escape dependence on oil, China has fallen into the trap of geology. Although it is the largest refiner in the world, it is poor in its own deposits of lithium, cobalt or nickel. As an extensive report by the Financial TimesIndonesia or the Democratic Republic of the Congo are tightening their access rules, forcing Beijing to increase its strategic reserves amid fears that third-country resource nationalism will disrupt its supply chain.
The awakening of a “disarmed” West. In Washington and Brussels they have gone from complacency to counteroffensive. US Treasury Secretary Scott Bessent and his G7 counterparts have recently met to create a “floor Price” for rare earths, seeking to stifle the competitive advantage of Chinese subsidies. In Europe, the Commissioner for Industry, Stéphane Séjourné, has sent a message that has made boards of directors tremble: through the ReSourceEU program, the EU could legally force companies to diversify their purchases to prevent Beijing from using permanent magnets as a geopolitical weapon.
For its part, Donald Trump’s administration is committed to regaining control of physical matter through Venezuelan and Guyanese crude oil. However, as Gillian Tett warns, this could be a pyrrhic victory: while the US fights for the fossil fuels of the 20th century, China continues to deploy ultra-high voltage networks to fuel its race for the future in Artificial Intelligence.
The clash of clocks. Rebuilding this sovereignty is not just a matter of capital; It’s a matter of hands. Expert Craig Tindale posits that the West suffers from a “human bottleneck”: after decades of deindustrialization, engineers who knew how to operate chemical plants and foundries have retired. China, through the prism of long-term planning inherited from Confucian thought, has synchronized its “industrial clock” with the political one, planning in decades what the West measures in financial quarters.
The energy transition has ceased to be a humanitarian mission and has become a total battlefield. China dominates scale and execution, but the West still holds the keys to technological innovation and control of capital markets. The greatest risk is that this clash of strategies ends up slowing down the decarbonization of the planet. At the end of the day, the interdependence between China and the West is their greatest common weakness, but also the only guarantee that both sides are forced, sooner or later, to understand each other.
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