The Prof G Pod with Scott Galloway

Why the N.B.A. is Betting Big on China

October 14, 2025

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  • China's restriction on rare earth exports represents a critical choke point in the US-China superpower rivalry, as China controls processing for about 90% of the world's supply and is weaponizing this supply chain dominance. 
  • Despite escalating trade tensions, the NBA's return to China signals a strategic area where cultural and economic engagement is prioritized by Beijing, potentially to boost consumption and services GDP. 
  • China is rapidly advancing in biotech, evidenced by the successful pig-to-human liver transplant and a generally less restrictive regulatory environment for gene editing, positioning it to disrupt global pharmaceutical markets. 

Segments

Rare Earths Trade War Escalation
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(00:01:41)
  • Key Takeaway: China’s formalization of export control regimes, now covering all rare earths as of December 1st, mimics US strategies and significantly increases its strategic control over critical minerals essential for global electronics and defense systems.
  • Summary: China processes about 90% of the world’s rare earths and restricts exports of 12 of the 17 known types, making this a potential decisive issue in the US-China rivalry. New export controls require licensure from Ofcom, even for products containing just 0.1% Chinese rare earths. These minerals are crucial for defense equipment, EVs, and data centers, and the US will need years to build domestic supply chains similar to Japan’s post-2010 embargo.
US-China Negotiation Outlook
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(00:08:19)
  • Key Takeaway: The trade conflict is viewed as a divorce neither side can afford, suggesting ongoing negotiations will likely result in a ‘deal that is no deal’—freezing escalation while continuing talks, rather than a full resolution or a complete bust-up.
  • Summary: China timed the rare earth announcement to gain leverage ahead of potential trade talks, similar to its previous use of soybean leverage. China is also mimicking US regulatory tools, such as using the Foreign Direct Product Rule (FDPR) for the first time. Both sides are piling on leverage, but the underlying economic codependency suggests they will ultimately agree to keep talking to avoid costly decoupling.
China’s Supply Chain Dominance
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(00:14:20)
  • Key Takeaway: China’s willingness to weaponize its rare earth supply chain signals a broader geopolitical strategy, as it already dominates production for solar panels (80%), wind power equipment (70%), and legacy semiconductors (35%).
  • Summary: China’s dominance in supply chains grants it significant leverage to seek geopolitical concessions from the US and others. By 2030, China is projected to account for 45% of all manufactured products globally, increasing its future leverage. This trend suggests a fundamental shift where China could dictate terms to the US, challenging the established global order since China joined the WTO in 2001.
NBA’s Return to China
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(00:17:53)
  • Key Takeaway: The NBA’s return with preseason games between the Nets and Suns marks a significant thaw after a six-year absence following the 2019 Hong Kong protest fallout, which cost the league $300 million in lost revenue.
  • Summary: Basketball is a national passion in China, with nearly 490 million viewers pre-rift. The return is interpreted as Beijing boosting cultural sports-related tourism and consumption, aligning with goals to increase service sector spending. Basketball has now overtaken soccer in media rights value in China, totaling $316 million.
Biotech Breakthroughs and Regulation
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(00:24:42)
  • Key Takeaway: China is leading in xenotransplantation, successfully transplanting a genetically modified pig liver that functioned for 171 days, driven by a regulatory environment that permits a more ’laissez-faire’ approach to ethically sensitive gene editing.
  • Summary: The pig liver transplant involved gene edits replacing pig genes with human ones to prevent immune rejection, a crucial step in addressing China’s 300,000 annual liver failure cases. China’s biotech sector is the strongest performing in its markets, supported by rising R&D spending (2.7% of GDP) and a high volume of STEM graduates. Global licensing of Chinese biotech products is up over 700% in five years, projecting revenues of $220 billion by 2040, indicating major disruption to Western pharma.