Arnaud Bertrand is an entrepreneur and commentator on economics and geopolitics. The article argues that China’s control over rare earth elements and related materials like gallium gives it an almost insurmountable, generational-level strategic advantage that cannot be quickly or easily broken by the West, concluding that the U.S. is “fu*ked” for the foreseeable future.
The author dismisses the popular idea that simply loosening environmental regulations or adding subsidies would solve the problem. Instead, they contend that China’s dominance is systemic, built on the vast scale of its manufacturing and the complete, vertically integrated nature of its industrial supply chain.
The Gallium Case Study: A Sign of the Scale of the Problem
The article focuses on gallium (a critical material for advanced military radars and GaN semiconductors) as a detailed example of the monumental effort required to break just one Chinese stranglehold:
- Gallium is a Byproduct: Gallium cannot be mined directly; it’s a trace byproduct of large-scale aluminum production.
- Massive Industrial Overhaul Required: To produce just 100 tons of gallium annually (less than 17% of China’s current production), the U.S. would need to:
- Increase Aluminum Production Sixfold: This requires building new alumina refineries and aluminum smelters, costing an estimated $30 billion.
- Overcome the Energy Challenge: The new smelters would require approximately 51 billion kWh of continuous, 24/7 power. This is equivalent to building six new Vogtle-scale nuclear reactors (three separate projects), costing an estimated $110 billion and taking a minimum of 12 years to complete.
- Train a Specialized Workforce: The U.S. would need to find and train at least 35,000 highly specialized industrial workers in a country that has spent decades dismantling its vocational training and manufacturing base.
- The Market Problem: Even after spending $140 billion and waiting over a decade, the new capacity would create 4.7 million tons of aluminum as a byproduct, exceeding the entire current U.S. domestic demand. This would result in a permanently unprofitable venture that could only be sustained by permanent taxpayer subsidies, as the product would not be globally price-competitive with China.
Why the Advantage is Systemic, Not Tactical
The author concludes that China’s advantage isn’t a matter of technology or a simple material shortage; it is a systemic advantage that the West has lost:
- Industrial Ecosystem Gap: Breaking the stranglehold requires rebuilding not just factories, but the entire industrial ecosystem—from supply chains for auxiliary materials (like carbon anodes and fluoride salts) to supporting infrastructure (ports, rail, logistics).
- The Human Capital Crisis: The challenge isn’t just funding; it’s building the human capital framework. China has a massive, organized system of vocational schools and a culture that values industrial work.2 The West lacks the entire cultural and educational structure needed to train a specialized workforce over the required 8-10 year timeline per skilled operator.
- “Patient Capital” Failure: Rebuilding the industry requires patient capital willing to accept decade-long losses and 20-year payback periods, a type of long-term investment that is virtually impossible in the West’s market-driven, short-term financial culture without a complete societal consensus that manufacturing is strategic.
The article’s final message is that this vulnerability is here to stay for a very long time, as solving the problem for just one element, gallium, is a challenge comparable to an Industrial Revolution, not a single megaproject like the Manhattan or Apollo Programs.