The global economy has placed renewed importance on physical materials and secure supply chains, which now carry weight equal to digital services. Western democracies face material impairment from prolonged reliance on China for critical resources. At the same time, the United States is actively working to gain control, where most of these efforts stem directly from concerns over China’s dominance in key areas.
China has built an extraordinary concentration in midstream processing of critical minerals. The figures below show approximate global shares based on recent data (primarily 2024–2025 estimates):
This level of control creates bottlenecks for high-tech, green energy, and defense applications worldwide. Rebuilding comparable capacity outside China requires significant time (typically 10–20 years) to develop scale, expertise, and competitive costs.
China continues to push rapid technological catch-up, especially in semiconductors, with notable progress in domestic tool development and toward self-sufficiency targets. However, matching the depth of U.S. or allied capabilities remains a multi-year challenge for both sides.
Recent U.S. actions, such as stricter export controls on advanced computing and chip technologies, as well as accelerated reshoring, respond directly to this leverage. China’s retaliatory steps, including limits on rare earths and other materials, highlight the mutual hostage situation: abrupt breaks would disrupt global chains that everyone depends on for innovation and security.
These developments make diversification across regions more essential than ever. Over-reliance on Western markets exposes portfolios to supply shocks, inflation, and geopolitical friction. Allocating to Asia (for manufacturing and processing strengths) and commodity producers in Australia and Latin America (for renewed structural demand) builds greater resilience. Diversification does not eliminate risks, but it helps protect wealth in a world where physical materials and supply chains demand more attention.
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This material represents an assessment of the market and economic environment at a specific point in time. It is not intended to be a forecast of future events or a guarantee of future results.
