Rush Doshi

Asst Professor, Georgetown • Director, CFR China Strategy Initiative • Biden NSC '21-24 • Wrote The Long Game: China's Grand Strategy to Displace American Order

[Rush Doshi @RushDoshi]

I've watched @amanpour on TV for decades. So I was grateful for the opportunity to sit down with her for 15 minutes.

Our interview aired on @CNN this weekend.

We talked China policy, Trump's approach, and why this decade is the decisive decade in the competition.

[John F Sullivan @JohnF_Sullivan]

"Whoever controls strategic rare earth metals controls the resources for future technology and holds the fate of the future. China must elevate this to a strategic height and manage and control strategic metal resources in the name of the state."

[Rush Doshi @RushDoshi]

This is an interesting question. My take: I do not quite accept the notion that China did not seek to "weaponize" rare earths and instead stumbled into a position of advantage. For at least 16 years, and likely more, the purpose has been an economic weapon. This is not like, say, solar or EVs, where excess capacity is sort of an accident.

Here, for example, is a semi-authoritative book cited by @JohnF_Sullivan on rare earth strategy written in 2011 for the state China Economic Publishing House the year after the Japan situation:

"What magical quality do rare earths possess that makes the usually arrogant and domineering Americans so furious? What magical quality do rare earths posses that leaves the usually wealthy and arrogant Japanese grief-stricken? China is the only country in the world capable of supplying all 17 rare earth elements, particularly holding a larger share of heavy rare earths that have prominent uses in military applications. To change China’s international position in the rare earth industry, since 2009, the Chinese government has launched a vigorous rare earth defense war, adopting a series of rectification measures including suspending approval of mining rights, controlling total mining volume, reducing export quotas, raising export tariffs and and severely cracking down on rare earth smuggling."

A key purpose of these post-2009 steps, which PRECEDE China's weaponization against Japan in 2010, was to hone a better coercive instrument.

Then there is some empirical evidence suggesting PRC action in this sector was about leverage.

First, most obviously, China used this as a coercive instrument in 2010. That shows, for at least 16 years, they have understood it as a critical leverage point.

Second, China's government has for decades manipulated the price of rare earths to prevent anyone else from achieving scale - dropping the price to kill foreign investment. Why did they do this when they already had 90% market dominance? The logic is toward control, not profit, and it is not the result of disaggregated independent Chinese market actors (which do not exist in this sector).

Third, related to that point, if this industry operated on economic logic, we would probably see more fragmentation. Indeed, for a brief time, we did see that before 2010. But then the PRC sharply consolidated the rare earths industry into state-backed companies. They shut down, arrested, harassed, and outright expropriated private actors. This was partly to ensure greater state control over external flows - the better to maintain leverage. The quote above refers to that effort.

Fourth, I do not think China's controls on rare earth minerals were modeled off U.S. controls. For example, the October controls went far beyond any U.S. controls. China's idea was any product, anywhere in the world, with .1% value coming from Chinese produced rare earths, required a license to be sold to anyone else in the world. The closest analogy -- and Chinese scholars have said this directly -- is to U.S. financial sanctions, not export controls.

Fifth, this is not a case where "there are many different actors, and they often overperform in search of particular targets." The industry has for a long time just been a few actors, tied to the state, acting at the state's direction. China's cultivation of leadership in this sector dates back to the 1960s, accelerating in the 1980s, with direct involvement of Deng's family in the 1990s and Premier Wen in the 2000s.

The empirical evidence seems to indicate a conscious desire to dominate this sector. One can debate whether or not such an intention was justifiable given U.S. control over chokepoints like finance.

But I think it is hard to advance the claim this was just the independent action of market participants that happened to accidentally create a position of extreme concentration and dominance.

[Soumaya Keynes @SoumayaKeynes]

When China spent decades building dominance in rare earths supply chains, what was it really trying to do? Build an economic weapon? Or something else?

I asked @jessicacweiss on The Economics Show with Soumaya Keynes podcast this week...

https://t.co/RqPftAkwq7

[Rush Doshi @RushDoshi]

@joshzoff @CFR_org Thanks, Josh!

[Josh Zoffer @joshzoff]

⬇️ be prepared to hear more and more about this. Bio is the future and we aren’t ready. Great work from @RushDoshi and @CFR_org

[Rush Doshi @RushDoshi]

🚨Thrilled to share our new @CFR_China report with CFR Global Health's @TomBollyky, @Prof_Yadav_SCM, @OliviaWKosloff, & Elena Every: "The Pharma Choke Point."

The US is dependent on Chinese production for essential medicines, creating a "rare earths" problem in this sector. Seven hundred medicines approved for use in the United States depend on at least one chemical produced solely in China.

For the last year, our study group of pharma and biotech specialists, China scholars, and industrial policy experts came together to:

1⃣ Use commercial data to map the dependencies
2⃣ Devise a typology of three unique "archetypes" of these dependencies
3⃣ Craft solutions to address these dependencies

A few key points follow below:

➡️China's Leverage is real — Beijing doesn't need a wartime crisis to exploit it. It can slow shipments, delay licenses, or reroute flows through "peacetime weaponization." That's the playbook it has already run on rare earths.

➡️Current dependence is structural — It's the product of decades of Chinese state investment and Western pursuit of the low-cost solution. China controls the raw/starting materials for 94% of US amoxicillin, 74% of heparin, and 70% of acetaminophen. It's dominating preclinical work in biotech. And diversifying downstream offers no real protection from upstream dependence.

➡️Archetype 1: Upstream Dependence — Roughly 700 medicines Americans depend on at least one chemical made only in China, including antibiotics, blood thinners, ER drugs. Solutions include:

- building a strategic reserve of critical medicines
- building "allied scale" to create diversified production
- mix various long-term supply and demand interventions to change economic viability for KSMs, APIs, and other upstream inputs (more in the report)

➡️Archetype 2: Competitive Displacement of U.S. Biomanufacturing and Clinical Trial Capacity — For innovative biologics—medicines made from living cells—such as monoclonal antibodies, the risk is not a single upstream choke point but competitive displacement across every stage of the value chain: discovery, clinical development, contract manufacturing, and market access. The U.S. is losing a critical capability: now, WuXi alone handles nearly half of US clients' development programs. China alone is more than half of all late-stage monoclonal antibody programs. Lock-in deepens at every stage. Solutions include:

- accelerating first-in-human clinical trials in the United States
- funding and incentivizing the adoption of advanced biologics manufacturing technologies (e.g., low-cost capital from the USG)
- building contract research alternatives in allied countries like South Korea
- bolstering the U.S. biomanufacturing workforce
- creating a system to secure artificial intelligence (AI)–ready biodata and digital chemistry, manufacturing, and controls.

➡️Archetype 3: Dependence on PRC Infrastructure — Here, the vulnerability is not disruption in the supply of an existing product, but Chinese control over the research-and-development (R&D) infrastructure underlying future pharmaceutical innovation. Growing reliance on China for DNA synthesis is just one example. Solutions include:

- improving DNA supply chain security
- enhancing transparency and disclosing provenance
- increasing federal investment in next-generation DNA synthesis technologies
- and bolstering allied cooperation on standard-setting and procurement to encourage the adoption of these technologies.

➡️Key Takeaway: China has both the tools and demonstrated willingness to weaponize U.S. pharmaceutical dependence: the structural conditions enabling it run through nearly every tier of the pharmaceutical supply. The question is not whether to act, but if the United States will manage to do so before a crisis makes the cost of decades of inaction unavoidable.

I am so grateful to Tom, Prashant, Elena, Olivia, Chloe, Ben, Aarya, CFR's publications team, and so many others who made this possible. It was tremendously educational to work together on this project.

[Steve Yates (葉望輝) @SteveYates]

It am very grateful to the House Foreign Affairs East Asia Subcommittee for inviting me to testify on China’s role in the fentanyl crisis. Part policy. Part personal. Kisses to you in Heaven Christina Marie.

[Rush Doshi @RushDoshi]

@SteveYates Powerful testimony, Steve.

[Brad Setser @Brad_Setser]

It is currently reported at 3.7% of GDP (heading to 4%) even with data adjustments/ quirks that lower the reported surplus by at least a percentage point of China's GDP ...

[Scott Gottlieb, MD 🇺🇸 @ScottGottliebMD]

China's new rules require approval before Chinese tech is transferred overseas. But U.S. drug tech is open for Chinese firms to parse for molecular leads that are quickly turned into competing medicine. Knowledge flows in one direction: into China not out
https://t.co/IC3hhficC9

[Rush Doshi @RushDoshi]

Sources are public, I’m just opting not to be antagonistic.

I contest the idea that there was much division on this among labor. In fact, all major labor unions basically supported tariffs or the connected vehicles
rule. A so-called left China policy that throws groups like UAW under the bus is not where Democrats should go.

“The baseline has to be good faith and a shared fight for an egalitarian world.”

That sounds nice, but many will hear it as an unrealistic elite frame that does little for those families facing serious economic threats from China’s mercantilist system.

Would love to discuss all this and will
DM you to do so.

[Rush Doshi @RushDoshi]

Any left China policy that claims to care about labor must acknowledge this fact or else it may as well be libertarian.

[Soumaya Keynes @SoumayaKeynes]

Why Europe must embrace tariffs

300 free clicks: https://t.co/JudVSXtOZH

[Rush Doshi @RushDoshi]

I’d be delighted to meet. And happy too to share references in private.

To provide a broad answer to your question, without naming individuals, many positions taken by those who claim the mantle of left China policy are at odds with the positions of labor. These include opposition to China tariffs — or opposition to protective action in categories like steel and connected vehicles — all of which key labor unions support.

Notably, those who oppose labor’s
position on these issues are functionally taking positions consistent with many in the financial and corporate sector.

This strikes me as a notable and unsustainable tension.

[Paul Heer @PaulJHeer]

@RushDoshi What Chinese "ambitions" do we "respect"? That's a loaded remark that demands explication!

[Rush Doshi @RushDoshi]

On China: “We respect their ambitions.”

On Arms Sale: No answer when asked whether Taiwans weapons sales are paused.

On Taiwan Policy: “Position hasn’t changed.”

[CBS News @CBSNews]

Defense Secretary Pete Hegseth said Saturday the U.S. "position hasn't changed on Taiwan" but toned down previous rhetoric where he called China an "imminent" threat.

Hegseth told reporters during his visit to Singapore that "there are places where we can work together with China," and "we respect their ambitions."

"We know that they have a significant military buildup that comes with considerations we have to take as a sovereign nation to ensure that we're prepared for any possible contingency," he added.

[Rush Doshi @RushDoshi]

@MsMelChen @Michael7ucci @CFR_org @DavidMSacks1 I agree. We should update it to say we have more evidence our article was right, unfortunately.

[Rush Doshi @RushDoshi]

Hegseth actually *confirmed* our point directly: the Taiwan arms sales pause wasn’t about Iran.

So what might have been about…?

Maybe it’s about what the President suggested all along — arms sales as a bargaining chip.

[Rush Doshi @RushDoshi]

@Michael7ucci 1) You should ask the President!

2) Think it’s ended up being speak softly and expend the stick in Venezuela, Iran, and possibly Cuba at risk to deterrence in Asia.

[Rush Doshi @RushDoshi]

Hegseth actually *confirmed* our point directly: the Taiwan arms sales pause wasn’t about Iran.

So what might have been about…?

Maybe it’s about what the President suggested all along — arms sales as a bargaining chip.

[Melissa Chen @MsMelChen]

@Michael7ucci @CFR_org @RushDoshi @DavidMSacks1 They should at least update it in light of what Hegseth just said:

[Rush Doshi @RushDoshi]

“These findings suggest that the rise of private health insurance in the United States was not solely due to macroeconomic forces or collective bargaining; rather it was also enabled by a strategic, interest group-financed effort to shape citizen views and influence policy.”

[QJE @QJEHarvard]

Recently accepted by #QJE: “Why Doesn't the United States Have National Health Insurance? The Political Role of the American Medical Association,” by Alsan and Neberai: https://t.co/9a1xXkLlKV

[Rush Doshi @RushDoshi]

And he never once mentioned Taiwan in the address at all. Notable.

[Rush Doshi @RushDoshi]

@Michael7ucci @MsMelChen @CFR_org @DavidMSacks1 Almost as if what they say in public might be different from what they say in private…

[Rush Doshi @RushDoshi]

@Michael7ucci @mike_mazza @DavidMSacks1 I think I’ll just leave it at this.

[Eric Sayers @DEricSayers]

@mike_mazza @RushDoshi @DavidMSacks1 It’s Friday night and we all support Taiwan and want it to determine its own future. Now let’s all watch our favorite baseball teams win….