In today's morning headlines comes an international tussle with wide-ranging implications: according to the New York Times, the Chinese government has ordered customs officers to halt shipments of rare earth elements to Japan. Naturally, China denies the allegations, but industry officials – and this is all according to the Times, mind you – claim that China's customs agency has notified companies that no rare earth metals are to be shipped to Japan, and that officials are halting shipments bound for that country at the seaport.
The most interesting part of the story: it's all over a fishing boat. Japan recently detained a Chinese fishing trawler captain whose boat collided with two Japanese Coast Guard vessels just 40 minutes apart in Japanese waters long contested by China. Japan has refused to release the captain even as Chinese Prime Minister Wen Jibao has pressured for his release. And now, allegedly, China has refused to export rare earth oxides, rare earth salts, and pure rare earth metals.
Rare earths, of course, are those 17 hard-to-refine elements that are the backbone of all kinds of modern technology, ranging from electric car motors to wind turbines to mobile electronics to high-tech defense applications. China has them in spades, mining some 93 percent of the world's supply. Japan is China's biggest customer.
The geopolitical ramifications, of course, are vast. If China indeed has ordered a halt to Japan-bound exports or rare earths they are in gross violation of World Trade Organization free trade rules. Meanwhile, Japanese manufacturing could be hurt and the U.S. – which gets a lot of its own rare earths from Japan – could be left in the lurch as well. For its part, Japanese manufacturers have already begun trying to innovate around their dependence on Chinese rare earth elements, but such efforts are still in their infancy.
From a more macro standpoint, if China is indeed bogarting its supply of rare earths to strong-arm Japan into making political concessions, it could be setting a dangerous precedent. Like OPEC's oil supply strangling in decades past, it paints a stark political portrait of what the world might look like if more sources of rare earths aren't located and exploited in places other than China (several possible reserves in places like Australia, Canada, and the U.S. are being explored, but production won't begin meaningfully until 2015 at the earliest).
Whether China has cut exports or not (and we reiterate that this story is still developing), this morning's news exposes just how beholden global industry is to these minerals and, by proxy, the whims of Chinese trade policy. A disruption in supplies could derail the manufacture of everything from high-tech scientific instruments to the defense supply chain. Needless to say, it's high time science, industry, and governments get together to make rare earths less rare.
If you put your balls in a vice expect to be squeezed. Could you really expect anything else from China? If I had that kind of economic power I would move into the international scene with my fists.
You cannot expect fairness and civility from China.
Currency manipulation, Coerced technology transfer agreements, industrial espionage, state sanctioned hacking, total disregard to the will of Tibet and Uyghur, human rights violation, mobilizing virulent mobs, the list goes on and on.
This could be the perfect time to start digging through our old trash dumps, and start recycling all those old cell phones and computers. It'll create jobs and clean up the environment. It won't give us all the rare earths we need but it could help till we find more sources.
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The chinese is not the problem, our policy is the problem. As far as they're concern, they are not hoarding or controlling anything, they produce the stuff on their soil and so they do as they wish. If we needed this stuff, why did we stop producing our own supply. That is how the chinese look at this problem.
What America can do is to stop sending money to the chinese for this stuff. Put the money on creating jobs by restart mining production for these rare-earth materials. It's that simple.
This is only a short-time issue.
In doing this, China is forcing the world to knuckle down and develop other sources.
holly wow.. is this the crash??
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China's going to find itself in trouble with the international community. That's the worst kind of trouble to be in. When everyone in the world is not on your side. If and when they're discovered they're going to play damage control to alleviate the situation as to correct it. If they're lucky they won't be sanctioned.
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Actually, it makes perfect sense. Do it, deny doing it, and move the market on it.
China has hated Japan (and Japan, China) for generations. Anything that can be done to throw some excrement in the other's pudding will be done.
The US has, in times past, not dealt directly with China, but those days are gone.
If squeezing Japan, even for a short time, allows them to move the rare Earth market to direct US exportation (cutting out the middle-man), then Japan gets screwed and they get both more money for their exports and another link of dependency to the US.
China understands that it NEEDS to have the US in tight economic ties of money, debt, resources, and products - because the US is the breadbox of the world and China has a population that is beyond any level of sustainability.
The US is a giant pig with a large wallet.
China is only now starting to flex it's muscles. Not only can't we even make our own clothes anymore, but we sold the machines to China...
"Currency manipulation, Coerced technology transfer agreements, industrial espionage, state sanctioned hacking, total disregard to the will of Tibet and Uyghur, human rights violation, mobilizing virulent mobs, the list goes on and on.."
Hay, China couldn't find a better master to learn all these none other than the United States. The US also has total disregard of the whole human race, invade and attack any countries at will. So get off your high moral horse and kiss the ground. You ban whatever you want to ban selling, and China will reciprocate the same!
At the America haters you act as if the common public is aware of all the negatives our monetary , and government leaders do. We can't even figure out for ourselves how they are screwing us so how are we supposed to help you.
At this point the idea of revolutionary seeds is there, but the will/ability to propagate such an act is unlikely. We are hooked, and much like the fish there isn't a whole lot we can do besides hide under a rock and hope the line breaks.
for the record I love my country and am a patriot of her people, but believe that my leadership is broken and needs a mass overhaul. We need a ground up restart. Sadly I will get bad mouthed by a few ignorant people that have no idea what has been taken from them. We are no longer the land of the free and for the most part have fewer freedoms than many other countries now. However we don't have anyone amongst the common class that can pull the clout to do anything about it without the current government leaders labeling us as a terrorist group, lonewolf, fanatic et cetera, that makes it ok for the current government to squash anyone with a different direction.
Furthermore other government such as china, and many others would move on the American people if we tried to change the government. Since we are the breadbox and power to make that much of a wave would truly disrupt the world. In other words if we tried to overthrow our government other governments would actually send troops to put the people down if our own government couldn't in order to either keep things as they are or to get foothold on the soil of this continent.
Yes these are tings we discussed while in active duty military. These things are what stops the people from forcing a change. Much as everyone having guns prevents invasion. Please keep in mind the government no longer needs weapons of death to control her people they have the tracking capability as well as space age weapons of sorts. Take the puke flashlight, the radio waves that make you feel as if you were on fire, or even the mass crowd control tazers. On top of that most people in this world are no longer inoculated against certain bacteria that will indeed kill on mass scale again. They are common and have caused devastation in the past, but since no one gets vaccinated for them anymore the more pure strains would just make a mess of us all... how many people do you know of current generation that have the old vaccine burn scar on their arm?
In short don't blame us common people in the us. As it is we are pretty hungry too. I have been living on four pounds of lunch meat a month for nearly two years... with bread of course the cheapest stuff on the shelf. So quite hating on us we are not all rich, and many have lost this richness you think we have.