Patrick McGee

Xi Jinping was able to get Trump to capitulate essentially within a day by saying, OK, well, we're going to license all rare earth metals coming out of China and essentially stop any military from using them.

An F-35 fighter has 900 kilograms of rare earths within the fighter jet.

It's even a higher figure for submarines used by the U.S.

military.

If we are cut off from rare earth metals that are not only mined but refined in China, certain parts of the economy comes to a standstill.

So the way that Westerners trains them up to be absolutely world class and now they are using those skill sets against them.

I mean, to be fair, I don't even think you can begrudge China for this.

This was actually a brilliantly executed plan and they did well with it.

Yeah, absolutely.

So if you think of the first iPhone in 2007, that was undoubtedly a product of globalization.

In other words, the components came from all over the planet and China's contributions were fairly minimal in that there wasn't a whole lot of Chinese parts.

And final assembly was probably the most instrumental thing they did to that.

But in a sense, two different things happened since 2007.

One is that more and more of the work, even if it was German, Japanese, Korean, etc., all moved towards China.

If you're going to be Apple and rely on 50 different countries for your supply chain, which is this is what Apple sort of publicly says.

It's going to make no sense that as you're going from 5 million units in 2007 to 230 million by 2015, that you're just relying on an ultra-sophisticated supply chain that's operating, again, with 50 countries, importing the products for a just-in-time production method, just fingers crossed that it's going to get through customs on time and everything.

That's ludicrous.

So obviously, Apple leaned on all of its suppliers and said, you need to be building in these industrial clusters.

So all these German, Korean, Japanese companies began building facilities in China.

I would say this is what people miss all the time.