We don’t need to remind you that there have been a few high-profile incidents between Filipino ships conducting harmless scientific research and the Chinese Navy of late. Rather than simply rehash old news or attempt to sound alarm bells, we want to take a closer look at why it’s happening.
Two nearby countries that share an expanse of water feuding over access is nothing new—this has been happening around the world for centuries. What marks the recent incidents out from much of what has come before, however, is the fact that many feel the stakes have never been higher.
What is at stake?
We should preface this section by saying that we are in no way predicting a new Cold War or any form of nuclear standoff. However, we do need to highlight the fact that the race for highly specialized raw materials has never been more important for the world’s biggest economies.
Mobile devices, the new class of electric vehicles, and anything else that requires a steady supply of electricity from a battery rely on one thing right now: lithium. While the previous century was all about oil, and the century before that was all about coal, the current century is set to be dominated by lithium—a rare element that has some truly incredible properties.
Why does lithium matter right now?
A few years ago, China was thought to hold up to 97% of the world’s supply of lithium deposits. All that has changed as the US has invested heavily in detecting and mining this priceless element so that it doesn’t become dependent on a Chinese supply of raw materials. When you consider that US companies, such as electric car manufacturer Tesla, are heavily reliant on lithium for their battery technology, this became a matter of global importance for the White House.
China is never a country to rest on its laurels or sit back and allow someone else to usurp them, however, which is why they continue scouring the ocean floor for new deposits. There is also the possibility of finding other chemical elements—the so-called ‘rare earth’ elements—that have similar properties to lithium. Large deposits of different materials may make as-yet-unreleased technologies commercially viable and sidestep the need for lithium altogether.
Will this result in conflict?
While every country quite understandably wants to do everything in its power to secure the raw materials it needs to function, supply issues with lithium are unlikely to result in a direct conflict. Yes, there may be incursions and low-level hostile acts such as those that inspired us to write this piece, but they remain a long way away from all-out war and organized armed conflict.
One of the primary reasons for this is that it is only really the US and China who are economically and industrially ready to make full use of a huge deposit of lithium. Mining, processing, and manufacturing each require significant levels of infrastructure and are what enables lithium to hold so much value. Without this infrastructure in place, a country can only sell the raw materials to someone who can use them, missing out on the majority of the leverage and value in the process.
The global connections matter
It’s crucial to continually recognize that no decision, whether economic or military, exists in a vacuum. If a country were to attempt to seize lithium deposits and impose on the Chinese hegemony in the region, China would have dozens of economic levers it could pull before it ever thought of resorting to overwhelming force. Sanctions, the withdrawal of aid, restrictions on economic packages, and the imposition of economic tariffs could all be used to make sure Beijing’s will is followed.
What a smaller nation may initially see as a strategic power play would then have the potential to seriously backfire and lead to economic disaster. In a world in which much of the developing world is choosing between the US and China, with Europe increasingly on the margins, being on the right side of history really does matter at this point. Making an aggressive move without unanimous support and significant financial and military support would be reckless in the extreme.
What will China do next?
It’s safe to say that China will continue to flex its muscles in the region to let everyone know it dominates the eastern hemisphere. Why? Because it can. This simple fact guides much of Chinese thought at a time when they are making a concerted effort to become a global superpower that will eventually overtake the US before leaving it in its shadow.
Over the months and years ahead, we can expect more minor shows of Chinese power, reports of new deposits being found, and breakthroughs in terms of both extraction and processing. What will be interesting is how this will be seen in Washington, where the Trump White House has certainly not shied away from facing down Beijing and flexing its own muscles on the global stage.
Final thoughts
In 2025, the ocean floor is big business. China has spent years surveying for deposits of rare earth minerals, such as lithium, that are key building blocks for electronic systems and batteries. Without these types of minerals, China sees itself at an economic disadvantage. But with the world’s largest deposits, they can have more control over the hardware that people use almost every day and therefore has a huge impact on their life and everyday activities, allowing the whole world to do everything from streaming a movie to messaging a friend to playing in an online casino or finding a hotel room to book for the weekend.
While we hope that the types of maritime clashes that spurred us to write this article soon become things of the past, the race for materials is only just getting started. It will certainly be interesting to see how things heat up and gather pace in the years ahead.