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US-China Competition

Technology decoupling, rare earth dependencies, and how great power competition reshapes everything from chip manufacturing to TikTok bans.

US-China Competition

The Core Argument

The US-China relationship has fundamentally changed. This isn't a trade dispute that gets resolved with a deal. It's a structural competition between two systems that will define the next several decades.

What matters for investors isn't predicting who "wins"—it's understanding how the competition reshapes industries, supply chains, and capital flows.

Key Claim: Technology decoupling is irreversible regardless of which party controls the White House.

The Three Theaters

1. Technology — Semiconductors, AI, quantum computing. The US is trying to maintain its lead while China is trying to achieve self-sufficiency. Both are spending massively.

2. Supply chains — Companies are being forced to choose: optimize for the China market or optimize for the US market. Doing both is increasingly difficult.

3. Capital markets — Chinese companies face delisting risk. Chinese investments face regulatory scrutiny. Capital is being forced to pick a side.

Taiwan: The Elephant in the Room

Everyone knows Taiwan matters. Few are pricing the risk appropriately.

TSMC manufactures 90% of the world's advanced semiconductors. A Taiwan crisis—invasion, blockade, even just heightened tension—would make the 2021 chip shortage look quaint.

Key Claim: Taiwan risk is underpriced in equity markets. Companies with Taiwan-dependent supply chains are not adequately discounting this risk.

Rare Earths and Critical Minerals

China controls 60%+ of rare earth processing. This isn't about mining—it's about the processing capacity that takes decades to build.

Every EV, every wind turbine, every smartphone depends on materials that flow through China. Diversification is happening, but it's slow and expensive.

What I'm Watching

1. CHIPS Act execution — Are US semiconductor fabs actually getting built on schedule?

2. China's response — How does China retaliate to US technology restrictions?

3. Corporate positioning — Are companies successfully navigating the "China Plus One" strategy?

Investment Implications

  1. Defense spending — Both countries are increasing military budgets
  2. Domestic semiconductor — US and allied chip manufacturing
  3. Critical minerals — Non-China sources of rare earths and battery metals
  4. Supply chain software — Tools for managing bifurcated supply chains