Bullets:
China enjoys effective monopolies on the raw materials supply chains to manufacture batteries.
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But equally important, if not more so, is China’s focus on building top programs across dozens of universities, turning out thousands of scientists every year.
This report is a transcript, for the YouTube video found here:
Report:
Good morning.
China has monopolies on most of the important supply chains for the key technologies that will drive the rest of the century. And these monopolies go way beyond the mines, and the refineries, and the logistics of moving everything around, and then in the application to finished products across China’s manufacturing sectors. Each of those, in each industry, presents enormous challenges on their own for any countries that want to take markets from China, over time.
But just as important, if not much more so, is China’s focus on turning out millions of top scientists and researchers, to make sure all those industries stay here. This is from the New York Times, which examined China’s dominance in batteries. China’s university system has 50 programs that focus on battery technology and battery metallurgy, at the graduate school level. In the United States, it’s hard to find a single professor that specializes in batteries. As a result, American undergrads who want to study batteries in the don’t have anywhere to go.
The New York Times profiled one of those 50 Chinese schools, Central South University in Changsha. Changsha is the capital of Hunan province, and it’s where China has clustered its chemical industries. This is from one department of one university, and a professor there set up a battery research company next door that hired 100 graduates and 200 assistants, and that partnership between the university and industry allows for new chemistries and battery designs round the clock, all year long.
So just from what we’ve learned so far: a kid in the United States doesn’t have anywhere to go to study batteries, China has dozens of choices, and they’re likely to lead to a job right out of school. Consider what that news means to a kid in South America or Africa, who wants to study chemistry and whose family is about to decide whether to spend $100,000 a year at a US school where he probably will never see a battery, or drop $5,000 to come to China where he’ll be in a lab on the first day, developing and testing new battery designs.
Chinese students are much more heavily tilted to study the hard sciences anyway. Far more study STEM subjects compared to students from large countries. And that percentage is rising over time, and the number of Chinese universities is also rising, sharply higher. Over 10 times as many Chinese students are enrolled today compared to 25 years ago. The central government is pushing to deepen their advantages in these areas, and in their last big planning meeting, declared that scientific education is a top economic priority—to Beijing, training in hard sciences is an existential economic issue. It’s a “national strategy to cultivate top talents.”
Here is where things stand right now on the global battery supply chain. Graphite is a crucial component of most batteries, and China controls 95% of the supply chain for the highest-quality graphite. Let’s point out, again, what a number like that means: add up all the graphite across the world that can be used to make batteries. China is the rest of the world, combined, times nineteen. That’s what the 95% number means. The rest of the world, even working together, doesn’t even come close.
The problem becomes more acute when we look at a map of where the world’s graphite is, and realize that most of those countries are super-friendly with China anyway, and are happy with selling China their graphite because China’s industries need it to build things, which is another thing that won’t change in anyone else’s favor soon.
Here’s a map of the lithium battery value chain, comparing China and the rest of the world, again adding up all the countries not China. China has 64% of the world’s supply of graphite, and to build batteries China needs lithium and other raw materials, but moving on to chemical refining and the production of anodes and battery cells, China has monopolies in 7 of the 8 key processes.
And so these realities just reinforce each other. China’s manufacturing sector needs the batteries to build actual products, and that’s a far more important share of China’s economy compared to the United States. All those companies building all those batteries means that they’re getting a lot better at it, and faster, and productivity is going up. Setting up a factory for electric car batteries, for example, costs six times as much in the United States, compared to China, and the work takes a lot longer.
So other countries who hope to develop battery industries of their own have little choice but to partner with China. It’s a political debate then, whether and how to work with Chinese firms to develop a battery industry in the US. It’s also a good question whether that is something China would actually want, given that they’re probably pretty satisfied with the situation as-is.
Resources and links:
New York Times, How China Built Tech Prowess: Chemistry Classes and Research Labs
https://www.nytimes.com/2024/08/09/business/china-ev-battery-tech.html
Stanford University, Energy: Confronting China’s grip on graphite for batteries
https://energy.stanford.edu/news/confronting-chinas-grip-graphite-batteries
https://www.greencarcongress.com/2022/10/20221009-benchmark.html
Graphite slips under radar as China puts foot on critical minerals supply chain
Researchgate, Production and reserves of natural graphite in 2023; US Geological Survey
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Those dastardly yellows and their institutes of learning have perfidiously achieved what we had no intention of doing! Curse them for their two-faced guile!
