China’s dominance over the global supply chain for critical minerals essential to defense technologies presents a formidable challenge to U.S. national security, according to a new report from the Foundation for the Defense of Democracies (FDD). The report, “Unplugging Beijing,” reveals that China controls over 80% of the materials used in batteries crucial for military applications, including drones, handheld radios, autonomous submersibles, lasers, and directed energy weapons. This dominance, the report argues, was achieved through a deliberate and aggressive strategy that weaponizes capitalism against free-market economies.
Through a combination of predatory tactics, China has seized control of every stage of the battery supply chain—from upstream mining of minerals like lithium, cobalt, nickel, copper, manganese, and graphite to midstream component manufacturing and downstream battery assembly. The report describes China’s approach as “parasitic,” leveraging non-market practices such as price manipulation, subsidies, export dumping, intellectual property theft, and aggressive vertical integration to undermine competitors and concentrate economic power.
“Beijing leverages a wide range of non-market practices to dominate supply chains, create resource dependencies, undermine foreign rivals, concentrate economic power, and destabilize emerging economies,” the report states. “This strategy is fundamentally parasitic, relying on the readiness of others to play by the rules even as China breaks them.”
China’s early recognition of the strategic importance of critical minerals led to a massive investment of $57 billion into mining and processing projects across Africa, Latin America, and other regions over the past two decades. The Belt and Road Initiative played a key role in this expansion, allowing China to gain control over mining and production operations in mineral-rich but economically vulnerable nations like the Democratic Republic of the Congo (DRC). Today, China produces 65% of the world’s lithium, over 85% of its battery-grade cobalt, 95% of its battery-grade graphite, and nearly all of its critical battery components.
The FDD report outlines several strategies to counter China’s dominance, including diversifying supply chains and fostering cooperation among free-market nations. “It is time for new guardrails, muscular statecraft, and a unified international response to non-market manipulation,” the report concludes. “Building critical supply chains that are independent of China’s coercive economic practices can help unleash a wave of cooperation among free-market nations that will lift both established allies and emerging market partners and turn the tide against China’s parasitic economic model.”
This growing recognition of the national security risks posed by China’s supply chain dominance has already spurred action. President Donald Trump’s administration has sought to strike deals with countries like Ukraine and the DRC to secure access to critical minerals, bolstering U.S.-led peace efforts in the region. The conflict in the DRC, where Rwanda has deployed armed forces to acquire vital minerals, underscores the geopolitical stakes involved.
As the U.S. and its allies work to mitigate these risks, the challenge will be to develop resilient supply chains that reduce dependence on China while fostering international collaboration. The stakes are high, as the future of defense technology—and by extension, national security—hangs in the balance.
