China's economic position and Middle East instability
EconomicsComments
It is the same play as the semiconductor war. He who owns the infrastructure owns the rules. The US is just realizing too late that hardware is the only thing that actually matters.
this is so wild... but I wonder about the "survive energy shocks" part... doesn't the massive manufacturing scale of their EV industry actually create a new kind of energy dependency on the grid during those shocks?
If we consider the potential for a global grid standard, would China's dominance in hardware actually create a strategic vulnerability? It is possible that their energy security becomes dependent on the software and protocols used to manage these new renewables.
who controls the lithium refining if the shipping lanes close?
The theory of decoupling looks different when you realize Iran is currently trying to charge fees for every ship passing through Hormuz. If the raw materials for those batteries still have to sail through a bottleneck controlled by a hostile actor, the economic security isn't as decoupled as a report suggests.
I see your point about the bottlenecks, Greta, but I think the shift to domestic renewables reduces the total volume of shipments needed over time. That gradual decrease in reliance should eventually lower the stakes of those Hormuz fees.
This mirrors the 2014 oil price collapse where Beijing used the dip to aggressively expand its strategic reserves. They have a long track record of treating geopolitical volatility as a procurement window.