October 21, 2010--Not So Rare Earths
Until reading the attached article in the New York Times it seemed to me that China had us by the you-know-what-hairs. Well, in fact they do, but not for the reasons I thought.
Apparently they control 95 percent of the world market in rare earths. Rare earth metals are a collection of seventeen elements in the periodic table from scandium to yttrium to the fifteen lanthanides. Remember that from high school? Not your household variety of chemicals; but, I now understand, essential to a variety of vital industries.
They are required for the manufacture of cell phones and other wireless devices, large wind turbines, CD players, computers, components for hybrid cars, petroleum, and even guided missiles. Pretty much everything that high technology contributes to the quality of our lives and our strategic defenses.
And, again, China controls almost the entire production.
This has become a big issue recently since they cut off the export of these earths to Japan, threatening to cripple what's left of their economy; and there is evidence that, since we are squeezing them about their green energy production and trade practices (they are also by far the world's leader in this), there is evidence that they are now also halting the shipment of yttrium and scandium to us.
China and Japan are in small ways still fighting the Second World War in that the rear earth trade embargo is the result of 65 years of squabbling over the sovereignty of a number of small islands in the East China Sea. In our case, however, though the specific cause of China's suspension of rare earth exports to us is allegedly tied to our complaining to the World Trade Organization about their government's unfair subsidies to their clean energy industry, in fact China's suspension of rare earth exports to us is more an opportunity for them to flex their geopolitical economic muscles.
They are in effect saying to us, We are no longer going to play a deferential role to the U.S. and the West when it comes to trade or industrial competition or, for that matter, anything else. We have arrived on the world stage and are in the process of seizing the spotlight. We control a significant portion of your debt, they are saying, and we plan to act as any major note holder would.
Up until now Chinese officials, when challenging American policies, have spoken in cautious, diplomatic language. But now they have taken of the gloves. About this recent matter, the head of their Ministry of Commerce in unvarnished language claimed, with some justification, that the timing of the Obama administration taking them before the WTO is because they are scrambling for votes in the midterm election and bashing China is a proven method of rallying the troops.
Then, just 10 days ago, Secretary of Defense Robert Gates faced the ire of his Chinese counterpart in another example of our two nations' struggle for global supremacy. While in Vietnam Gates was hoping to visit China as part of our effort to work cooperatively with Chinese military officials. But his request was initially rebuffed because of our on-going support for Taiwan and surveillance of Chinese weapons research and the buildup of their forces. In somewhat bent English, a Chinese official, unusually for them, on the record said that Gates was unwelcome until "the United States stops selling the weapons to Taiwan and stopping spying us with the air or the surface.”
But when it comes to rare earths, it appears that we, not the Chinese, are our own worst enemy. Though China controls 95 of the rare earth mining it is not because these elements are rare and found primarily in China. Quite the contrary. They exist in many places around the world, including the United States. But, as with many other jobs and industries our corporations (with government encouragement) have shipped overseas, we have ceded primacy in rare earth mining to China.
To quote the Times, "Most of the industry has moved to China over the last two decades because of lower costs and weak environmental enforcement there."
Congress is considering legislation to provide loans to American companies to reestablish rare earth mining and manufacturing in the U.S., but even if it passes (which is doubtful considering the partisans chaos) it will take three to five years to reach full production.
Until that time, we will continue to be dependent on China for these essential elements and they will increasingly make us pay in more ways that we can imagine.
Apparently they control 95 percent of the world market in rare earths. Rare earth metals are a collection of seventeen elements in the periodic table from scandium to yttrium to the fifteen lanthanides. Remember that from high school? Not your household variety of chemicals; but, I now understand, essential to a variety of vital industries.
They are required for the manufacture of cell phones and other wireless devices, large wind turbines, CD players, computers, components for hybrid cars, petroleum, and even guided missiles. Pretty much everything that high technology contributes to the quality of our lives and our strategic defenses.
And, again, China controls almost the entire production.
This has become a big issue recently since they cut off the export of these earths to Japan, threatening to cripple what's left of their economy; and there is evidence that, since we are squeezing them about their green energy production and trade practices (they are also by far the world's leader in this), there is evidence that they are now also halting the shipment of yttrium and scandium to us.
China and Japan are in small ways still fighting the Second World War in that the rear earth trade embargo is the result of 65 years of squabbling over the sovereignty of a number of small islands in the East China Sea. In our case, however, though the specific cause of China's suspension of rare earth exports to us is allegedly tied to our complaining to the World Trade Organization about their government's unfair subsidies to their clean energy industry, in fact China's suspension of rare earth exports to us is more an opportunity for them to flex their geopolitical economic muscles.
They are in effect saying to us, We are no longer going to play a deferential role to the U.S. and the West when it comes to trade or industrial competition or, for that matter, anything else. We have arrived on the world stage and are in the process of seizing the spotlight. We control a significant portion of your debt, they are saying, and we plan to act as any major note holder would.
Up until now Chinese officials, when challenging American policies, have spoken in cautious, diplomatic language. But now they have taken of the gloves. About this recent matter, the head of their Ministry of Commerce in unvarnished language claimed, with some justification, that the timing of the Obama administration taking them before the WTO is because they are scrambling for votes in the midterm election and bashing China is a proven method of rallying the troops.
Then, just 10 days ago, Secretary of Defense Robert Gates faced the ire of his Chinese counterpart in another example of our two nations' struggle for global supremacy. While in Vietnam Gates was hoping to visit China as part of our effort to work cooperatively with Chinese military officials. But his request was initially rebuffed because of our on-going support for Taiwan and surveillance of Chinese weapons research and the buildup of their forces. In somewhat bent English, a Chinese official, unusually for them, on the record said that Gates was unwelcome until "the United States stops selling the weapons to Taiwan and stopping spying us with the air or the surface.”
But when it comes to rare earths, it appears that we, not the Chinese, are our own worst enemy. Though China controls 95 of the rare earth mining it is not because these elements are rare and found primarily in China. Quite the contrary. They exist in many places around the world, including the United States. But, as with many other jobs and industries our corporations (with government encouragement) have shipped overseas, we have ceded primacy in rare earth mining to China.
To quote the Times, "Most of the industry has moved to China over the last two decades because of lower costs and weak environmental enforcement there."
Congress is considering legislation to provide loans to American companies to reestablish rare earth mining and manufacturing in the U.S., but even if it passes (which is doubtful considering the partisans chaos) it will take three to five years to reach full production.
Until that time, we will continue to be dependent on China for these essential elements and they will increasingly make us pay in more ways that we can imagine.
posted by Steven Zwerling at
5:49 AM
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