Is the U.S. overly dependent on China for rare earth metals? That's the
question foreign policy observers are raising in the midst of a political
skirmish between China and Japan. On Thursday, The New York Times
reported that China is blocking exports of rare metals to Japan over a
dispute involving a Chinese fishing trawler detained by Japanese
officials (China denies
the allegation). Much of the world, including the U.S., depends on
China for its rare earth metals, which are used in solar panels, hybrid
cars, guided missiles and other high-tech products. Beijing's
apparent willingness to wield its material resources for political advantage have
U.S. observers concerned.
China Dominates the Rare Earths Trade, writes Blake Hounshell at Foreign Policy: "Today, China has become dominant in rare earths in ways the Saudi royal family could only dream, driving others out of the business, and now controls as much as 97 percent of the global market. According to a recent paper by Cindy Hurst, an analyst for the U.S. Army's Foreign Military Studies Office, that figure may even understate China's supremacy: Beijing has also poured untold millions into basic and applied research on rare earth elements, and runs two state laboratories employing hundreds of scientists devoted exclusively to the subject. The world's only two journals dedicated to rare earth metals are in Chinese."
- China Might Use This Tactic on Us, warns Andrew Leonard at Salon: "At a time when the U.S. government is stepping up criticism of China for artificially depressing the value of the yuan, and concern about how the country may be flouting international trade rules to grab market share for its solar panel and windmill industries is growing, the indication that China is prepared to use its rare earth dominance as a diplomatic club is alarming. The panda is throwing its weight around."
- Maybe the U.S. Should Start Stockpiling, adds Hounshell: "There is also talk of setting up a U.S. stockpile for rare earth elements, as South Korea and Japan have already done, but any such plans for an American 'strategic metals reserve' remain embryonic. It may be time to get cracking: According to the latest projections by Dudley Kingsnorth, an industry consultant, China could be consuming nearly its entire annual production of rare earth elements by as early as 2014. "
- Absolutely, We Should Start Stockpiling, writes Alexis Madrigal at The Atlantic: "Given that two industries as diverse as green tech and defense both need rare earth metals, why is the United States so dependent on Chinese production? Is China just the only place we can get this stuff? No. In California, there's a place called Mountain Pass... For decades, most of the world's rare earth metals were mined and refined right there. The process of restarting production could begin at any time. The company that controls the pass, Molycorp, said it would take about $500 million to start mining again... We could fix this problem. But unfortunately our politics works on the 15-minute timescale of fame, not the 15-year clock of industrial policy."
- I Knew This Was Going to Happen, writes William Jacobson at Legal Insurrection. He points to a blog post he wrote in January, which states: "The green economy envisioned by the Obama administration as the means by which we will grow 'green jobs' and lessen our dependence on foreign oil in fact simply puts us at the mercy of the Chinese... This is a monumental policy failure in its infancy. Is anyone in Washington listening?"
- China Is Being Foolish Here, writes Daniel Drezner at Foreign Policy: "It is possible that Beijing has simply decided that its internal growth is so big that it can afford the friction that comes with a rising power. My assessment, however, is that they're vastly overestimating their current power vis-a-vis the United States, and they're significantly undererstimating the effect of pushing the rest of the Pacific Rim into closer ties with the United States (and India)."