China's Economic Might Reshapes Global Power

In 2025, Beijing restricted exports of rare earth elements and magnets, leading to immediate disruptions such as the idling of Ford's Chicago Explorer plant due to a lack of essential components.

These elements, though accounting for less than 1% of a car's value, are indispensable for production, highlighting the critical dependence of industries like EVs, solar panels, and drones on Chinese supply chains, which China has spent decades meticulously building.

Geoeconomic power, which economists now apply to China, is increasingly found in tangible assets such as factories, payment systems, ports, and critical components rather than traditional military might.

China accounts for roughly 30% of global industrial production and produces over 70% of the world's electric vehicles, lithium-ion batteries, solar cells, and drones, primarily due to its massive scale in processing and mid-stream supply chain infrastructure.

The primary challenge in rare earth elements is not the raw material's scarcity, but the complex processing required to transform them into high-performance magnets, a capability largely controlled by China.

Beijing initiated export controls on seven heavy rare earth elements in April 2025 and expanded these controls in October 2025 to include products globally manufactured with Chinese technology or materials, a measure that the International Energy Agency estimates could expose up to $6.5 trillion in annual production outside China across various industries if fully implemented.

Beijing portrays this policy as a framework for mutual development, cooperation, and openness, simultaneously advocating for reforms in the international system to enhance representation for developing countries.

The efficiency of Chinese manufacturing has significantly lowered prices for solar panels and batteries, thereby accelerating the accessibility of renewable energy and electric vehicles globally.

However, this economic dependence, driven by countries prioritizing cheaper, scalable goods, has resulted in a vulnerability where the very specialization and economies of scale that drive globalization become sources of leverage for China.

In Angola, opposition parliament members reported that workers at a Chinese-run construction site were earning $75 a month, which falls below the country's legal minimum wage of $108.

Workers at these sites reportedly feared speaking out against these conditions due to concerns about job loss, raising questions about labor standards and transparency in projects built by Chinese state firms.

The United States imposed sweeping tariffs against China, citing concerns about trade barriers and currency manipulation, to which Beijing retaliated with export restrictions on rare earths and magnets.

These actions demonstrate how power can be exercised through the architecture of trade across continents without direct military conflict, creating an impetus for vulnerable countries to seek alternative supply sources.

In response to these vulnerabilities, public financing for critical minerals in advanced economies surged to $65 billion in 2025, four times higher than two years prior, as part of global efforts to secure independent supply chains.

The United States is investing in domestic critical mineral supply chains, while Europe has formally adopted a 'de-risking' strategy that includes subsidizing new mines and refineries, stockpiling strategic materials, imposing local content rules, and forming partnerships with alternative supplier countries.

China's economy, heavily reliant on exports, achieved a substantial trade surplus of approximately $1.2 trillion in 2025, yet faces significant domestic challenges.

The country's electric and hybrid vehicle production capacity currently doubles its domestic demand, while youth unemployment climbed above 21% before reporting methods were changed, underscoring that an industrial machine built for export does not automatically ensure widespread domestic prosperity.

While Russia historically relies on military force, territorial control, and energy leverage to assert its influence, China has achieved a similar effect by deeply embedding its economy into global production networks.

This deep integration makes China's economy difficult to avoid for many nations, even as China itself remains dependent on imported energy, foreign markets, and the broader global trading system.

Historically, geopolitical chokepoints were defined by physical geography, such as canals or mountain passes; however, in the modern era, they encompass critical manufacturing nodes like refineries, battery anodes, and rare earth magnets.

The more visibly Beijing exercises control through these contemporary chokepoints, the more valuable alternatives become, incentivizing other nations to invest significantly in building independent supply chains, which could ultimately create a long-term weakness for China's leverage.