Did China Overplay Rare Earth Hand?

An alleged halt in rare earth element exports to Japan put world governments on notice. Did China push too hard, too fast?  Please read the article in The Diplomat here:

Up until a recent territorial spat between Japan and China, most people probably knew little, if anything, about the 17 elements known collectively as rare earth metals. But news that China had halted exports of these metals to Japan at the height of a row over the detention of a Chinese fishing captain—and Japan’s subsequent capitulation over the issue—have underscored just how economically vital they are.

China has officially denied suspending exports to Japan, blaming instead stricter controls and overzealous Chinese suppliers. However, export quotas this year were 24,280 tons, down from 31,310 tons in 2009. And some reports have said there are more cuts to come, with officials suggesting that the need to check environmental degradation and a possible price collapse mean an additional 30 percent cut is necessary next year.

So why all the fuss? The problem is that China has gradually acquired more than a 90 percent share of the exports of these metals, which have proved to be a critical ingredient for green energy and high-tech products ranging from wind turbines and hybrid vehicles to mobile phones and guided missiles. Their importance stems in large part from the fact that in many industries, there’s currently no viable substitute.

November 18, 2010 4:53 PM
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