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How America Should Respond to China’s Industrial Dominance Playbook

This article first appeared on AMAC Newsline.

Two hundred and fifty years young, the United States of America remains the best country in the world. We’re not perfect, but we still pass “the gates test” with flying colors.

As the longtime conservative leader Bill Bennett noted in highlighting the Berlin Wall, “You can measure a nation’s worth by observing the flow of humanity when barriers are raised: do they fight to enter, or do they risk everything to escape?” In America, people are still desperately trying to get in, and for good reason.

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But being the best now isn’t a guarantee that we’ll remain so in the future. China is nipping at our economic heels. If the U.S. wants to remain on top, we’ve got to counter the playbook they have been using to win over and over again.

Just look at the data.

In less than two decades, China went from producing two percent of the world’s solar panels to more than 80 percent. In rare earth minerals, it went from 21 percent of global supply in 1985 to 97 percent by 2010. In pharmaceuticals, America, Europe, and Japan together produced 90 percentof the world’s active pharmaceutical ingredients in the mid-1990s. Today, China alone produces more than 80 percent.

Chinese industrial dominance is not an accident. As far back as 1949, the Chinese Communist Party (CCP) issued its first Five Year Plan, with a focus on industrialization and the socialist transformation of the Chinese economy, with technical assistance from the Soviet Union. Recently, the CCP issued its 15th Five Year Plan, and they are not going to stop until they are on top.

This shows that China’s dominance of vital global industries is a strategy–one that China intends to keep using until America puts a stop to it.

The playbook is consistent across industries: The U.S. invents it. China manufactures and aggressively subsidizes it to drive out U.S. competition. Voila, the U.S. is dependent on low-cost Chinese goods.

Maybe this was acceptable when we were dealing with toys and t-shirts from Walmart, but China has also used this playbook on more important industries like solar, critical minerals, biotechnology, and now to win the AI race. If we want to retake the lead and keep our edge in technologies of the future, we must act quickly.

>>>READ: America Helped Build China’s Rare Earth Monopoly

Here’s how the Chinese playbook played out on solar, minerals, and biotech.

On solar, China was among the first nations to recognize this rapidly scaling power source as a strategic industry. It invested more than $50 billion in state subsidies, undercut the global market, and pushed non-Chinese solar manufacturers to collapse. By the time American policymakers recognized the threat, the fastest-growing energy source the world has ever known was owned by China.

America can retake some of the global market share and reestablish itself in this industry with the right moves. Solar subsidies that incentivized higher capital spending over operational efficiency are finally expiring, freeing the industry from perverse incentives that raised costs. And Trump administration limits on foreign components from countries that don’t play by the rules should push American producers to reestablish supply chains from domestic sources and friendly nations.

The critical minerals case is even more urgent. Using state-backed overcapacity, below-market pricing, and systematic elimination of foreign competitors, China is now the dominant refiner of 19 of 20 strategic minerals analyzed by the International Energy Agency (IEA), controlling roughly 70 percent of global processing capacity. It leads in the production and processing of 99 percent of gallium, 79 percent of graphite, 95 percent of magnesium, 83 percent of tungsten, and more than 69 percent of rare earth elements.

These are not niche materials. They are necessary in high-tech and defense supply chains—embedded in semiconductors, electric vehicles, grid storage, and energy infrastructure. Because China dominates global refining and export capacity, in December 2024 it had the power to ban exports of gallium and germanium to the United States, then suspended the ban as a trade bargaining chip. China let the world see that it can sever American access to strategic materials without firing a shot and restore it just as easily.

The Trump administration has rightly shifted sustained focus to unlocking American made critical minerals that have been trapped by overly burdensome environmental red tape.

Just last year in the One Big Beautiful Bill, we, the taxpayers, committed $7.5 billion for mining and processing, $1 billion to a Department of Energy critical minerals initiative, and linked 54 allied nations in coordinated supply chain development through the Forum on Resource Geostrategic Engagement.

But America must move further faster at scale if we want to beat the CCP. We need to unleash the power of the free enterprise system and dramatically cut bureaucratic red tape.

The CCP has also almost completed its dominance playbook in the field of biotechnology. America used to be a pharmaceutical giant. Now, along with China producing the lion’s share of global active pharmaceutical ingredients, eight of the top ten global research institutions on the 2025 Nature Index are Chinese.

Pfizer CEO Albert Bourla warned in March that for the first time in decades, American dominance in biotech is under threat, and the National Security Commission on Emerging Biotechnology cautioned that America must act within three years or risk falling permanently behind.

America is not without tools to respond. The BIOSECURE Act, which will restrict federal contracts with Chinese biotech firms, passed Congress with bipartisan support and was signed into law. Likewise, Congress should deploy targeted investments in domestic biomanufacturing capacity while ARPA-H, the health research equivalent of DARPA, should prioritize early-stage investments in biological manufacturing processes the private market won’t fund alone.

Finally, permitting reform for biomanufacturing facilities must match the urgency of the threat — China does not spend years waiting for environmental reviews before building a pharmaceutical plant. America cannot either.

In three of the world’s most vital industries, America has been losing the long game.


>>>READ: Harvest Deep-Sea Minerals to Combat China

Now, China is applying its same winning strategy in the most powerful field of all: artificial intelligence. China activated the world’s largest distributed computing network in December 2025—spanning 1,243 miles and connecting 40 cities—while spending $50 to $70 billion annually subsidizing domestic AI chips and data centers. Chinese hyper-scalers will invest more than $70 billion in data center infrastructure this year alone. The subsidized scale, the domestic championing of development, and the infrastructure overcapacity all mirror the solar, critical mineral, and biotechnology playbook.

The biggest difference is that, with AI, America still has time to respond because we are catching China at the beginning of its playbook, not the end. In the past, excess passivity and a restrained pace left the United States unprepared for China’s aggressive market manipulation. The choice before us now is to cede AI to China or respond with the urgency and consistency the moment demands.

China did not dominate solar manufacturing, critical minerals, or biotechnology in a year. It took two decades of patient, consistent industrial strategy. America’s response cannot be reactive and episodic. It must be serious and sustained.

The Trump Administration, Congress, the next administration, and the next Congress, need to stay committed to a bipartisan “all of the above” energy policy, cut rolls of red tape, and partner up with our allies. That’s the way we beat China with our own playbook.

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.

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