China Controls Critical Resources America Must Secure, Study Reveals
The Growing Threat of China's Battery Dominance
China’s overwhelming control over the global battery materials market poses a serious risk to the United States, particularly in the defense sector. A recent report highlights how the Chinese Communist Party (CCP) has established a near-monopoly on critical components needed for advanced batteries, which are essential for modern military technology.
The Foundation for the Defense of Democracies (FDD) found that China controls more than 80% of the world’s lithium-ion battery supply. This dominance extends to key components such as cathodes and anodes, with China holding 70% of the cathode market and an astonishing 97% of the anode market. Additionally, the country exerts significant influence over graphite and cobalt, both of which are vital for battery production and chip manufacturing.
This level of control is not just a matter of economic power—it raises national security concerns. Advanced batteries are crucial for high-tech weapons systems, including drones, missile guidance systems, and other unmanned platforms. As these technologies become increasingly central to modern warfare, reliance on Chinese-made batteries could leave the U.S. vulnerable.
The Role of Drones in Modern Warfare
The use of drones has transformed the battlefield, as seen in the Russia-Ukraine war. An estimated 50,000 battery-reliant attack drones were used per month during the conflict. These drones require high-performance batteries, many of which are sourced from China. The FDD report emphasizes that this dependency creates a critical weakness in the U.S. military’s small drones and similar devices.
With China dominating nearly 90% of the global drone market, the implications are clear. If adversaries choose to restrict access to these essential components, the U.S. could face significant challenges in maintaining its technological edge.
China’s Economic Strategy
China’s dominance is not accidental. The government has long employed aggressive strategies to maintain its position in global markets. Unlike Western nations that generally support fair competition, Beijing uses non-market practices to strengthen its grip on supply chains. These tactics include creating resource dependencies, undermining foreign competitors, and concentrating economic power.
To sustain this dominance, the Chinese government has provided substantial financial support to domestic companies. From 2009 to 2023, over $230 billion in subsidies and tax breaks were given to battery producers. These interventions have allowed Chinese firms to outcompete their international counterparts, further solidifying the country’s control over the industry.
The U.S. Response and Challenges
Recognizing the risks, the U.S. has taken steps to reduce its reliance on Chinese battery supplies. During the Trump administration, efforts were made to diversify sources of rare earth elements, including lithium. However, the U.S. still imports approximately 75% of its lithium-ion batteries from China, highlighting the scale of the challenge.
The FDD report suggests that investing in domestic mineral extraction and processing, along with enforcing greater transparency from China, could help counteract this imbalance. American allies like Argentina and Chile, which hold significant reserves of critical minerals, may also play a role in reducing dependence on Chinese supplies.
The Path Forward
While the Pentagon has not publicly commented on the issue, the growing concern among defense experts underscores the urgency of addressing this vulnerability. Ensuring a stable and secure supply of battery materials is not just an economic issue—it is a matter of national security.
As the U.S. seeks to build a more resilient supply chain, it must balance the need for strategic independence with the realities of global trade. The path forward will require careful planning, investment, and international cooperation to mitigate the risks posed by China’s dominant position in the battery industry.