The leverage that China believes it has over the rest of the world is its vast manufacturing infrastructure that lords over just-in-time delivery, and the effective monopoly it has over certain technologies.
One of these technologies are rare earth elements (REEs), which Chinese magazine The Global Times called "an ace in Beijing's hand" after the U.S. Department of Commerce cut off Chinese telecom giant Huawei from access to U.S. microchips and components.
China has tried to shift reliance on that technology to other countries, and as I wrote last week, the country has been hoarding as many semiconductors and integrated circuits as it can.
Moreover, China may also try to cut exports of rare earth material to the U.S. in retaliation for both the ongoing trade tiff and the aforementioned military exhibitionism in the South China Sea.
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