The U.S.-China Economic Cold War Is No Longer Silent

"For decades, the United States (U.S.) operated under a fatal delusion that free trade with China would liberalize its politics and that the global market was a neutral playing field. We were profoundly wrong. In 2000, the U.S. controlled 37% of global semiconductor fabrication. Today, we control less than 12%, while China is on track for 40% by 2030. While we played by the rules of Adam Smith, Beijing played by the rules of Sun Tzu."

"We are now in the midst of a silent asymmetric economic war. China does not have a private sector in the American sense. Under its strategy of Civil Military Fusion, every ByteDance algorithm and every ton of refined lithium is a dual use asset of the Chinese Communist Party. Meanwhile, the U.S. encouraged the atrophy of its industrial base by prioritizing short term profits from outsourcing to China instead of securing our own economic and national security future. The West created this irrational strategic vulnerability where Beijing now controls 80% of refined rare earth supplies and more than 60% of the magnets in actuation systems for the F35."

For decades the United States assumed free trade with China would liberalize Beijing and treated global markets as neutral. U.S. semiconductor fabrication share fell from 37% in 2000 to under 12% now, with China projected to reach 40% by 2030. China integrates civilian and military sectors through Civil Military Fusion, treating private outputs as dual-use state assets. The U.S. prioritized short-term profits and outsourced production, weakening its industrial base and creating dependencies: Beijing controls 80% of refined rare earths and over 60% of certain magnets. The Trump administration formed an economic war cabinet and an Economic Defense Unit to link private-sector dynamism with national security objectives.

Read at The Cipher Brief