This week China announced\u00a0it is reducing the amount of rare earths it will export in 2011 by more than 10 per cent.\u00a0\u00a0Since\u00a0rare earth\u00a0minerals (REE or REM) are vital for the manufacturing of high-tech products this has caused concern among other countries.<\/p>\n
China supplies\u00a097 per cent of the global production of REMs, which are needed to produce devices such as\u00a0cellphones, computer drives and hybrid cars.\u00a0 High-tech producing countries were alarmed when Beijing blocked shipments of REMs to Japan earlier this year\u00a0citing\u00a0a geopolitical debate.<\/p>\n
China’s grip and manipulation of the supply of REMs has driven countries to look for alternative sources.\u00a0\u00a0In North America, a number of companies, such as\u00a0Molycorp Inc. in the U.S. and Thompson Creek Metals Co. in Canada\u00a0are hurrying to open or re-open rare earth mines. \u00a0In\u00a0Australia two companies are also preparing to mine rare earths.\u00a0<\/p>\n
However, the process takes time and meanwhile China is using its grip on the supply of REMs to force them into a better competitive manufacturing position by passing export tarifs to make foreign manufacturers less competitive.\u00a0 In effect, by making it more expensive to manufacture high-tech products outside China, it is making possible to supply the same products (though their quality is always questionable) cheaper in China.\u00a0 That will result in distributors and retailers sourcing more of their products from China, thereby creating more jobs in China and the loss of jobs in Europe and North America.\u00a0<\/p>\n
Wait a second, don’t we have an international trade agreement that forbids that?\u00a0 Since when has any government been able to stop the Chinese from dumping excess steel production into their economies and thereby causing their local steel mills to close down?\u00a0 China is still allowing knock offs to be exported, so why would we expect them to behave any differently with REMs?<\/p>\n
As an indication of this, I point to Chinese state media earlier this month reporting that China plans to raise duties on some REMs for export beginning next year.\u00a0 Furthermore, China has been reducing export quotas of rare earths over the past several years due to domestic demand. \u00a0On the other hand, a Chinese\u00a0Commerce Ministry spokesman has stated that China is cutting its exploration, production and exports out of environmental concerns.<\/p>\n
An even stronger indication of China’s eco-political motives is the fact that China has announced it is preparing to set up a REMs association that will include nearly all of China’s leading REM companies ad would help them to co-ordinate their negotiating positions.\u00a0 That to me defines a cartel and international monopoly.\u00a0 The announcement was posted on the Sina Corp. portal confirming that the association would be set up in May 2011.<\/p>\n
Referring back to the whole international rules thing, the United States last week threatened to go to the World Trade Organization with its concerns over China and REMs. Last Tuesday during a regular press briefing,\u00a0China Foreign Ministry spokeswoman Jiang Yu declined to answer.\u00a0 What do they say about silence again?<\/p>\n
Yet, Wen Jiabao, China’s top economic official, told a China-European Union business summit in Brussels in October that “China is not using rare earth as a bargaining chip.”\u00a0 You have to hand to Wen Jiabao, it takes quite nerve to make a statement that is contrary to one’s behaviour and actually expect others to believe it.<\/p>\n
I don’t know where this is heading, but I hope it’s not heading in the direction that it seems to be heading in.\u00a0 If in fact China is playing eco-politics the ultimate result will be nationalization within other countries.\u00a0 This is often the precedent for military war.\u00a0 We certainly are living in interesting times.<\/p>\n
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This week China announced\u00a0it is reducing the amount of rare earths it will export in 2011 by more than 10 per cent.\u00a0\u00a0Since\u00a0rare earth\u00a0minerals (REE or REM) are vital for the manufacturing of high-tech products this has caused concern among other countries. China supplies\u00a097 per cent of the global production of…<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-2724","post","type-post","status-publish","format-standard","hentry"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/posts\/2724","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/comments?post=2724"}],"version-history":[{"count":0,"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/posts\/2724\/revisions"}],"wp:attachment":[{"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/media?parent=2724"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/categories?post=2724"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/tags?post=2724"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}