The elements of power, p.11
The Elements of Power, page 11
They would soon find that the business climate in China was confusing and opaque, especially as politicians in Beijing laid down policies of retrenchment in the early 1990s in reaction to massive pro-reform protests. Dissidents were silenced. Guardrails were placed around foreign investment, even as more and more overseas companies poured money into the country. The transformation of state-owned enterprises into capitalist models became layered with complexity as the government moved to protect strategic industries and firms at which layoffs threatened labor unrest.
SAIC, which had close ties to the Chinese military-industrial complex, refused to negotiate with Aronson. Something else was also afoot. “The Chinese government decided to commandeer his factories to make submarine batteries, and they wanted to take over his factory,” Iseard told me. “And Bob didn’t want to allow that. He wanted to continue to manufacture for electric cars and other vehicles and so on.” The battery factory was seized by SFAIC, and Aronson took the firm to arbitration court in Stockholm, where he was awarded $4.5 million. SFAIC declared bankruptcy and refused to pay. “We began learning that China has a policy of non-enforcement of arbitral awards in favor of foreigners,” Aronson said when he testified to Congress about the case in 1997.
Even more worrying, the Chinese government was using SFAIC as a tool for spying on the U.S., and as a way of diverting technology to Beijing’s military-industrial complex. “They had a liaison office at McDonnell Douglas in connection with their agreement with us, so we were really a cover for an espionage operation which went bad,” Aronson testified. Five Chinese spies were eventually arrested at McDonnell Douglas’s headquarters in California. The U.S. firm found itself caught up in a web of accusations that it had allowed vital machine tools—tools that could be used to build military aircraft—to fall into the hands of China, and it was fined $2.1 million by the Department of Commerce in 2001. The Wall Street Journal called it “one of the largest civil penalties ever in an export-control case.” The company was acquired by Boeing, which paid the fine. SAIC’s parent company, the state-owned Aviation Industry Corporation of China, is still around. In 2023, it was ranked 150th on Fortune’s Global 500 list of corporations.
As for Aronson, he never received the arbitration money, Iseard told me. During his congressional testimony in 1997, at a hearing on whether China should be allowed to join the World Trade Organization, Aronson didn’t mince words. “China’s disgraceful behavior…is not the behavior of a country mature enough to join the World Community of Nations,” he said. “Therefore, at this point in time, I could not recommend that China be allowed to become part of the World Trade Organization.”
Despite the admonition of Aronson and others, the corridors of power in Washington and Europe were awash with enthusiasm for globalization, and China joined the WTO in 2001. Beijing would quickly build up the capacity to become a world leader in battery production and the processing of critical minerals. Aronson and his dream to build smokeless cars would be forgotten. And lithium-ion, a technology that the pioneering American had overlooked—and that China understood it had to control—steamed to the vanguard of power storage.
Chapter 15
Twilight of the Big Vegetables
As the West moved out of Zaire, Beijing rushed in to capitalize on the relationship it had built with Mobutu Sese Seko. The Chinese-built Kamanyola Stadium, which was finished in 1993, was the fourth biggest in Africa, and around the same time, China agreed to mine at the marquee Katangese copper mines of Étoile and Ruashi. For a brief while, it appeared that Mobutu might be saved by his alliances in the East. But then, even that money dried up: The Chinese had seen the writing on the wall for the dictator. They had better things to do than stand alone with an isolated kleptocrat.
The crumbling of Congo in the 1990s and early 2000s and the way it was divvied up are key to understanding today’s complex lithium-ion battery supply chain. “The country’s formal economy,” a U.S. State Department assessment from 1996 read, “has virtually collapsed…. Zaire’s public sector is insolvent and unable to provide even the most basic public services at satisfactory levels…. The vast majority of Zaïrians live in poverty.”
Congo’s mining industry had also collapsed. Katanga’s huge Kamoto mine, which followed a huge deposit of copper and cobalt deep through underground tunnels, had literally collapsed six years earlier, burying the jig concentrator and fifteen million tons of ore. At the nearby Kamoto Oliveira Virgule, one of the country’s largest mines, the pit had been flooded. Copper production was just under a fourteenth of what it had been in 1988. Cobalt production had almost halved. When I asked Bruce Jewels, a banker who had dealt with Gécamines before Mobutu’s fall, what the company was like in those years, he laughed: “Corrupt.” Top executives stole wantonly. “These guys were being kept in positions of power and houses bought for them by Belgian friends in South Africa so that the status quo on the delivery of cobalt and copper could continue,” he went on. “It was a complete mafia.”
In desperation, Mobutu turned to his own countrymen. He invoked what is sometimes called “Article 15” of the Congolese Constitution: Débrouillez-vous—fend for yourself. He gave a speech to soldiers who had not been paid. “You have guns,” he told them. “You don’t need a salary.”
As the State Department report surmised, “The informal economy, while dynamic and increasingly active in providing essential public services, consists essentially of subsistence activities, and cannot arrest the country’s overall economic and social degradation.”
Mobutu encouraged the people of the South to fend for themselves as well. In 1982, he had legalized small-scale mining, mainly of gold and gemstones, but as Gécamines collapsed in the early 1990s, so-called artisanal miners became a common sight on the ailing giant’s plots. During and after the Belgian era, the practice had existed on the periphery in Katanga, often for traditional copper smelting by the descendants of precolonial smiths. The difference was that now, for the first time, the small-scale mining of copper and cobalt ore—often carried out by unpaid Gécamines agents and achieved using tools no more sophisticated than sharpened lengths of metal pipe—had become a business. Copper and cobalt mined in this manner began to find its way onto international markets; ore was sold to traders at small makeshift trading houses known as maisons and then to bigger fish who would ship it out of the country.
* * *
Odilon Kajumba Kilanga’s father, Joseph Kufi Kilanga, was a cousin of Kufi Kilanga, the minister, but he had enjoyed none of his relative’s success. In the 1980s, he had moved from northern Katanga to the outskirts of Lubumbashi and settled near a copper-cobalt mine called Kakama. Joseph had come to find a better life for the family he was starting with his wife, Beatrice, and he began building a small business selling tires. He talked about his illustrious cousin every now and then, but he was starting from scratch.
As Gécamines folded, people started to enter the concession near Joseph’s shop to mine for copper and cobalt. Joseph remained wary: He wanted no part in the business. Besides, nobody was making that much money. The pits people were digging were getting deeper and deeper and more and more dangerous. Kajumba remembered that during these early days, he and his brothers would help their father take off tires, fitting and refitting them onto the wheels of passing cars and trucks. Their father didn’t want them working too much, though: School was the most important thing, he used to say. Joseph worried for his young sons, as the country seemed to be sailing further and further into dire straits. “He was a great example,” Kajumba would later remember. “He was the best dad in the world.”
When other kids in the neighborhood started to go into the mine site to earn money scrounging for ore, Kajumba’s father forbade him from joining them. He was the kind of father whose instinct to protect overrode his children’s wishes. “He didn’t want me to go to the mines, or even to venture too far from home,” Kajumba said. “He wanted us to study.”
* * *
The country seemed to have sunk as low as it could. But worse was to come. In 1995, Mobutu’s defeat was being actively plotted by rebels to the east, in Rwanda and Uganda. After the 1994 Rwandan genocide, the marshal had made enemies among Rwanda’s new Tutsi-led government. Mobutu had allowed ethnic Hutus to flee into the country from Rwanda after Hutu supremacists slaughtered up to eight hundred thousand Tutsis. Many of the people responsible for the killings were among the refugees and now threatened Rwanda from Congolese refugee camps. Rwanda’s Tutsis mustered a force to unseat Mobutu and install someone who would be loyal to them.
In the past, Mobutu might have counted on Western support to quell an all-out assault, as he had during the Shaba I and Shaba II attacks on Kolwezi. But this was a new world. Besides, the dictator’s China policy, which had seemed so wise when the money was flowing in, hadn’t exactly endeared him to his erstwhile allies in Washington, Paris, and Brussels. They didn’t discourage or encourage Kigali’s plans. Mobutu asked Hassan II of Morocco for assistance, just as he had during the Shaba rebellion, but this time none came. A mine entrepreneur of the era told me that the CIA was content to sit on the sidelines and watch a victor emerge.
* * *
In the 1990s, Laurent-Désiré Kabila, a former leader of the anti-Mobutu Simba rebels, was selected by the Rwandan government to become one of the leaders of the insurgency. After one of his fellow rebel leaders died, he quickly maneuvered himself into becoming the only leader of the campaign to oust Mobutu. Kabila, who was in his late fifties, was in many ways an odd choice to lead Congo. He was known as the M’zee, after a Kiswahili honorific for an older gentleman. He was a Marxist doctrinaire and a wily operator. A French report of the era described him as “like an ebony Buddha with a polished skull…a plump ghost.”
Kabila was born to a Luba father and a Lunda mother in northern Katanga, on the shores of Lake Tanganyika, not far from where Kufi Kilanga had spent his early school years at the mission. Kabila’s first taste of politics had come in the early 1960s, during Katanga’s fractious secession period. A Balubakat militia he had joined at independence killed his father, an educated man who had been elevated to the status of a local functionary by the Belgians. Kabila never publicly expressed any remorse for his old man’s death.
Soon after, Kabila joined the Simbas in rebellion in eastern Congo. There he liaised with Che Guevara, who had come to spread revolution in Africa. He constantly frustrated Che, standing him up at remote guerrilla camps for weeks. Che wasn’t entirely critical—he said Kabila was a fine leader—but he noted that “it is essential to have revolutionary seriousness, an ideology that can be a guide to action, a spirit of sacrifice that accompanies one’s actions. To date, Kabila has shown that he possesses none of these qualities…. I have very great doubts about his ability to overcome his defects in the environment in which he operates.” After a few months, Che packed up and left.
In the years after Che’s disappointment, Kabila had continued to underwhelm. When he’d tried to run a Marxist rebel republic in eastern Congo, it had fallen to pieces. In later years, he had enjoyed better luck with a brothel and a series of fisheries in Tanzania. Kabila certainly seemed an odd choice for leader of the new rebel movement, but only if one thought that the Rwandans wanted him to actually run Congo. He was less of an odd choice, however, if one considered that the Rwandans saw him as a puppet leader. They really wanted to control Congo through him and control the giant country’s resources themselves. And as Sony’s production of lithium-ion batteries went global, those resources would become ever more valuable.
Chapter 16
Building Dreams
Wang Chuanfu, the founder of BYD
In February 1995, the same year that Sony introduced its powerful third-generation battery, a company called BYD began doing business in the backstreets of Shenzhen, one of China’s manufacturing boomtowns. A picture from the time shows the entrance to the firm, housed in a grimy concrete building, behind a red sign that reads, in Mandarin, “Metallurgical Compound.” There was scant indication that, before long, the firm it advertised would become one of the world’s largest battery makers and, soon after, one of the world’s largest automobile companies.
In the spring of 2024, I watched as a black BYD Seal, the company’s midsize sedan, silently rounded a bend in Paris’s Second Arrondissement. Later I logged on to the company’s website. “Dynamic and intelligent,” the site gushed. “Ultra-rapid charging is no problem.” Through a chat window, I asked an associate (or a chatbot) named Charles if he knew where the company sourced the primary materials it used in its lithium-ion batteries. “It’s a BYD Blade battery,” Charles said, a novel technology that orders cells in a unique way, making for a more powerful, longer-lasting battery.
But where did the material in the battery come from? BYD’s salesman didn’t want to get into the specifics of the supply chain. “I’m very sorry,” Charles replied. “I can’t dispose of that kind of information directly.”
Back on the street, I stopped to snap a photograph. It was the first time I had ever seen a BYD. Around me, nobody seemed to notice the pebble-shaped vehicle as it slipped into the afternoon traffic. It was fitting: The company had built its reputation on a certain lack of flash, eschewing grand public proclamations like those of Elon Musk and Steve Jobs for a slow and steady grind. In early 2025, BYD would surpass Musk’s Tesla to become the world’s largest producer of electric vehicles.
* * *
The BYD Seal was even more extraordinary in light of where its founder had come from. Wang Chuanfu was from a rice-farming town called Wuwei, in China’s Anhui Province. Translated, Wuwei means something like “Do nothing” or “Let it be” in Mandarin. Wang’s father, a carpenter, died when he was thirteen, and his mother passed two years later, leaving his elder brother and sister to raise him. The tune of his upbringing seemed to consist of a single, somber note, one that tolled crushing poverty for hundreds of millions of rural Chinese in the 1970s and ’80s. His family sometimes had to beg to pay for basic necessities, and a storm once blew down their small home. Wang’s older brother dropped out of school to work, and his family gave one of his five sisters up for adoption because they could not support her.
Wang was bright and worked incredibly hard, wasting little time on leisure. As a young man—thickly bespectacled, on the smallish side, with a round, jovial face—he began his studies at the Central South Industrial University (now the Central South University). There he joined the youth league of the Chinese Communist Party and became known for his moves at cafeteria dances. On weekends, he helped his older sister and brother run their shop, declining to take time away from work to join his friends on hiking excursions.
In 1987, Wang went to study for a postgraduate degree at Beijing’s General Research Institute for Nonferrous Metals. Within three years, he had acquired his degree, and he became an associate professor. Two years after that, he was promoted to deputy director of the entire institute. He married and prepared for a stable career in academia. Such jobs, known as “iron rice bowls,” had assured a stable salary for Chinese citizens as the country settled into its Communist era, and they were part of the state’s implicit promise to furnish work to those who applied themselves. A year later, Wang was promoted again, this time to run Big Power Nickel-Hydrogen Battery Co. Ltd., a joint-venture battery company that the institute had established with Baosteel, a state-owned metals concern.
Taking on the new role meant that Wang had to move with his young family to the southern city of Shenzhen. As China had opened up for business, Shenzhen had led the way. The city was originally a fishing village next to Hong Kong, an Asian finance hub, then still under British control. In 1980, Deng, the Chinese premier, designated Shenzhen a special economic zone (SEZ), relaxing controls on private industry. Businesses could be set up in a heartbeat, and fortunes were there to be seized.
When Wang arrived in 1992 to run Big Power, he was transfixed by the currents of business and success running through the city. A picture of him from the era shows a man who had come a long way from Wuwei: Wang sports a low-cut, double-breasted gray suit and seems to be in a hurry, his gaze fixed on some point out of the frame.
Wang had noticed something else too. It was the early ’90s, and more and more of the new business elites he saw marching through the streets were spouting off into large mobile phones with long antennae.
Wang understood that there was a gap in the market: The batteries were incredibly pricey, and this contributed to making the phones scarcely affordable for most people. Wang thought he could produce them in China at a far lower cost. “Importing batteries from Japan was very expensive,” he later told an interviewer. “There were import duties, and delivery times were long.” One day in 1994, Wang read an article suggesting that Japan was moving away from nickel-cadmium technology in a bid to minimize pollution; he knew, though, that the technology was still needed to power many devices, especially the cell phones that he was beginning to see everywhere.
At first, Wang tried to make the idea stick at Big Power, but infighting between the joint-venture partners made the work environment chaotic. He decided to strike out on his own. In November 1994, he rented a small workshop on one of the top floors of the metallurgical academy in Shenzhen’s Buji neighborhood. As a book in praise of Wang’s business acumen later put it: “He renounced a comfortable life to become an ascetic.” Wang, who had spent his life studying chemistry, began to deconstruct Japanese batteries to see how they could be made quickly and cheaply. He took aim at the large battery firms across the Sea of Japan. Two months later, just shy of his thirtieth birthday, Wang incorporated BYD and started searching for funding. The initials didn’t mean anything at first—Wang reportedly chose the character that corresponded to the Roman B so his company would be high up on lists of companies at trade fairs.
