32 1GM Saturday August 1 2020 | the timesComment
weekend essay
modules. Information technology, the early work in
western universities on artificial intelligence, anything
that could be adapted for military use. Laser weapons,
robotics, gas-cooled nuclear reactors. And, yes, rare
metals. How were they being used by American
industry, by defence manufacturers?
These were the priorities and the “international
studies research centre”, dreamt up by the former
paramount leader Deng Xiaoping, found over the
years that even little nuggets of information picked
up in a university refectory could help solve a
technical problem at home. It was, of course,
intellectual property theft, grand larceny on a
grand scale.
Of all the targeted sectors, some have
borne fruit — China has made its second
successful moon landing, Beijing’s spy
satellites have become an integral part of
its surveillance society — while others,
such as the quest for rare metals and
strategically critical minerals, have
become a fixed part of the national
agenda.
Western leaders moan that China, having
sought a global role, never quite understood its
global responsibility. But they missed the point. For
Xi Jinping, global interdependency means that he
can extend his global power by threatening weakPrecious metals and minerals will drive a new Industrial Revolution that
will be dominated by Beijing unless democracies unite, says Roger Boyes
China has left
the West behind
in gold rush of
the 21st century
thinks he is laying the foundations of future Chinese
hegemony. The calculation is that though the Chinese
armed forces will lag behind those of the US for a
decade or more, China can use its grip of strategic
commodities to constrain America. It can control the
supply and pricing of some of the most sensitive
minerals essential to the US arms industry, and can
advance faster on the pivotal question of battery
capacity for electric vehicles. The assumption is not
just that China will bounce back to growth before the
US but also that global demand for wind turbines and
solar panels will outstrip global supply of the materials.
“There’s a sense of urgency around the need for a
processing facility that’s not in China,” says Pini
Althaus of USA Rare Earth, which is co-operating
with Texas Mineral Resources Corp to develop a
processing plant from Round Top mountain in
southwest Texas. The mountain contains the largest
deposit of heavy rare earths in the US, as well as
critical minerals like uranium, thorium, hafnium and
gallium. And, for the electric vehicle industry, the all-
important lithium. The plan is to build a pilot project
in Colorado, demonstrate its feasibility to investors,
and then construct a larger processing plant next to
the Texan mountain. From extraction to rare earth
oxide, the material will stay in the US and not be sent
on to China.
Covid-19 has accelerated thinking about western
vulnerability when a critical supply chain originates in
China. That is rattling Beijing. What if the US, perhaps
co-operating with its allies, develops its own supply
chains? What happens to the extraordinary policy of
strategic rivalry by stealth that was launched decades
ago? “That’s why the consulate in Houston was put
under pressure by its masters,” says an Australian
intelligence analyst. “That’s why they made mistakes
that caught the attention of the FBI
counterintelligence people.” The Chinese
government has complained that US
investigators have even searched and
scanned diplomatic baggage over the past
18 months.
The Chinese industrial catch-up
strategy was laid out in March 1986, hence
its nickname, the 863 project. That
number has since become a shorthand for
FBI investigators. As in: “That Chinese
academic, who has become so active in the
local parent-teacher association, he’s 863”.
The programme called for the development
of dual-use technologies, that is with civil and
military applications. Scientists, businessmen,
diplomats and spies were commanded to dig
out western work on biological warfare, genes
and genetic mutations. To make the
acquaintance of anyone involved in space
technology, especially spy satellites and launchA
secret bonfire in the courtyard of the
Chinese consulate in Houston has
highlighted a new phase in the struggle of
the century between the US and the
Beijing regime. America closed down the
consulate last week, declaring it to be a hub of
espionage and intellectual property theft. Diplomats
scurried to burn documents in three oil drums. Before
their eviction, the Chinese officials worked day and
night to shred anything incriminating.
What turned Xi Jinping’s Texan outpost into such a
menacing nest of spies? After all, the deep suspicion
about China’s intellectual property theft now
permeates the whole of America. The head of the FBI,
Christopher Wray, says his agency opens a China-
related counterintelligence case every ten hours.
There are thousands of live cases. If you wanted to
make an example of high-tech spookery, why not
shutter the San Francisco consulate, China’s listening
station on Silicon Valley, rather than Houston?
The answer may be a project under way east of El
Paso, where scientists and engineers are developing
ways of breaking China’s near-monopoly on so-called
rare earth elements. These are the metals that will be
essential for the mastery of the information age. They
make smartphones work, they power electric vehicles
and feed into the next generation of war-fighting,
missile guidance, satellites, lasers and jets. Control
over critical minerals and metals was the basis of
empires — oil and gold — and the natural stamping
ground for spies and wheeler-dealers.
That’s why China is on the scene. China supplied 80
per cent of America’s needs for these rare metals
between 2014 and 2017. And, crucially, it controls 85
per cent of the world’s capacity to process them.
Realistically, it would take many years to match this
processing power or compete with China’s low costs.
That makes nonsense of the Trump administration’s
threat to decouple from the Chinese economy. And it
strongly positions Xi as he seeks to ride the crest of a
new Industrial Revolution.
This latter-day gold rush takes in not only terra
firma but also the seabed and even the dark side of the
moon. China leads the way in winning exploration
rights on the bottom of the Pacific Ocean, in
particular the Clarion Clipperton zone, which is said
to be the world’s richest untapped collection of rare
earth elements. A Chinese shipbuilder has constructed
an undersea digger that will plough the sea bed and
harvest nickel, cobalt and manganese. On the moon,
the Chang’e 4, which landed early last year, is said to
be the first step towards mineral exploitation. It is
using ground-penetrating radar to work out the
geological composition of the Von Karman crater in
the moon’s southern hemisphere.
These efforts may seem fanciful, the megalomaniac
vision of a cat-stroking James Bond villain, but XiTantalum
Mines in DR Congo
President Xi thinks
he is laying the
foundations of future
Chinese supremacy
over the United StatesChina dominates the
mining and refining
of Tantalum,
which is used in
precision-
guided missiles
such as US
Army anti-tank
missiles, belowmininga
of Ta n
whic
prep
gug
ssu
AAr
mmi