In response to US efforts to cut China out of the high tech economic race, Beijing has banned the export of metals such as gallium and germanium, which are used in the manufacturing of advanced microchips and a number of military weaponry, such as radars, to the United States.
Michael Maloof, a former senior security policy analyst in the US Office of the Secretary of Defense, told Sputnik on Wednesday that unless the US acts to address the inevitable shortages created by Chinese policy, “given their criticality for military production, it will be a serious problem, and it also would mean the Chinese basically would be controlling US production of military equipment, which is a national security problem.”
“I think the United States is becoming aware of the need now to develop its own sources of rare earth metals and what have you, and they are looking actively now for alternative sources. The United States itself has a tremendous amount of these rare earths, they just haven't mined them. Now they're going to have to reconsider that decision and begin to focus on that and get out from under the dependency of China for these rare earth metals,” he said.
“I would also extend that to pharmaceuticals and everything else. We noticed during the COVID pandemic and the supplies for hygiene and cleanliness, the Chinese were threatening to withhold a lot of that equipment. So that dependency is something the United States is going to have to deal with. The Biden administration doesn't seem too anxious to do that. It pays lip service, but it doesn't seem to be acting fast enough or in any concerted way.”
Maloof noted that the Pentagon already insists on using US-made microchips and other equipment in its weapons for security purposes, but that “there has been some slippage in that” in recent years.
“Now, in terms of [ending] a wholesale reliance of US industry away from China for microchip and technology production, it is going to require tremendous amounts of investment and reinvestment,” he noted.
At the same time Maloof also believes that the Chinese “have also basically shot themselves in the foot” with laws deterring US companies from investing in China by deciding that “anybody can be accused of a breach of national security, and that would include people who are in US companies in China.”
“So I'm beginning to get the sense that US companies are taking a second look now at even investing in China and will look more inward, either in the United States, or will look to other more friendly countries such as India or a number of the Southeast Asian countries, for that reinvestment purposes,” he said.
He noted there are other sources for “very refined technologies, intricate technologies” such as microchips, including Singapore and Taiwan, which lack the “agitation of the political aspects that China itself presents.”
“So I think you're going to see a shift, over time, it's not going to be immediate by the United States in terms of its US production, more toward the US. The problem for the US is that the labor costs are so much higher, that's why they continue to look to other friendly countries for reinvestment. In time, those countries will start raising their [labor] prices, so it's just a matter of time before everything shifts back to the US.”
“It will take generations for the United States to replace whatever they're getting now from China. At least one generation. First of all, they got to go out and find the materials. We know that the raw materials are available. Then there's the question of mining those raw materials. Then you have other issues. In the US, you've got environmental considerations and lawsuits that could accrue from those kinds of activities. So just the switchover alone could take a generation or two.”
“Then we have to deal with the internal politics and other challenges that could occur internally because of people who might have opposition or groups that might oppose mining and what it might do to the environment. I mean, we've run into that now with energy, fossil fuels and with oil and gas. And as a consequence, the United States went from energy independence back to high energy dependency on the Middle East, to the point that it has caused tremendous inflationary pressures on America. Why we shoot ourselves in the foot like that is beyond me,” he said, noting that a number of socio-economic issues in the US are “self-inflicted consequences of very poor policy from the top.”