That's actually a funny and real example. For a long time there was a heat map that showed where the concentration of MSIE 6 was. It was China because every copy of Windows was pirated and may have also had government keys hard coded in the pirated copies. They were locked at the patch level the pirated version was made from and it was impossible to patch it otherwise.
Either way the US has nearly unlimited amounts of rare earth material in raw form. Its just much more expensive and time consuming to process it in the US and US regulations make it even more expensive. China does not follow our environmental laws and we breath the output of that. That's why they are processed in China. Processing it in the US would reduce global pollution for a hefty price.
Some of it perhaps. A lot of it is more localised, going into their dust clouds and water supplies. We should face the fact that moving rare earth processing to the US would mean either expensive mitigation measures or a lot more Americans experiencing health conditions - and probably both.
Then China will switch a billion desktops to Linux and the US will still need rare earths.
Easier than smuggling a few tonnes of metal? Let me introduce you to my elderly parents...
As for proprietary software that runs on Windows, these would need to be handled individually. The simplest solution for them is to use old versions that need no connection to the outside world to function. There might be some risks involved but I think they will rapidly adjust.
In my opinion, China and probably other countries currently have stolen code for every major proprietary software product. They just won't use it openly or officially because of IP laws. In a war, all that will go out the window. They may not have quite as many competent people to throw at fixing issues with that software, but they will do what they can.
What about scenarios short of a war? Well, a lot of what China does for us involves IP. If they stop respecting a bunch of our IP and stop exporting things that only they currently make, they can cause tremendous damage. Go look in a store and see what is made in China. American cars currently rely on Chinese parts and materials. The Chinese can stop exporting steel if they want. They will certainly take damage but you seem to not understand the extent of the damage they can inflict on the West. Windows Updates won't mean a damn thing in the long run, or even the short run.
2. Why do you think the pirated versions of Windows largely used in China are getting updates?
3. What do you think happens when patches aren't applied to Windows?