A rare cause for war
I’m not sure how the rest of the world didn’t see this coming:
The United States and Europe have been remarkably insouciant about supplies of rare earth minerals so crucial to frontier technologies, from hybrid engines to mobile phones, superconductors, radar and smart bombs.
Lack of strategic planning by the West has allowed China to acquire a world monopoly on this family of seventeen metals. Assumptions that Beijing would never risk its reputation as a global team player by abruptly strangling supply have proved naive.
Well, they know now. Read more of Ambrose Evans-Pritchard’s article to understand how China has strategised to achieve this worrying outcome and what the potential ramifications might be.
How much longer is the world going to remain in a state of denial about China’s intentions to bend everyone else to their will? Under the present regime China is neither a fair trade, team, or morally observant player on the world stage. It really is time for people to wake up to the new reality.
If Evans-Pritchard’s assessment is accurate – and there’s no reason to suppose otherwise – the US are 15 years away from recovering the rare-earth supply chain they once had, the time for sober realisation is NOW.
Update
Anyone of the misguided opinion that China will give ground on this issue should take a closer look at today’s offering from The China Economic Review on Chinese negotiating style:
Secretary of State Hillary Clinton steps up and unlocks the mystery of negotiating with the Chinese – they only compromise with enemies who scare them. Old hands know that the “middle” in Middle Kingdom refers to China’s place of honor just below Heaven but still far above the barbarian horde. That’s why traditional wisdom on negotiating with a Chinese counter-party by giving face and preserving harmony is a loser strategy – you end up bargaining for the best terms of your own submission.
Business leaders can learn a great deal from two approaches to Chinese negotiation that the US has tried out in the last 18 months. The Obama administration started with the same game-plan that many ambitious CEOs attempt when they are still China novices. They gave face, preserved harmony and built close personal relationships by offering concessions. Then they sat back, waiting for the Chinese side to reciprocate. It’s been a long, long wait. Just ask Tim Geithner – he traded his manhood away to Hu Jintao for a 0.7% appreciation in the RMB-USD exchange rate and more trash-talk about the state of the US economy.
I’m staggered at the naivety of successive world leaders in dealing with the Chinese government. I can forgive a few early stumbles, but how difficult is it to find smart individuals who understand Chinese strategic thinking?
China currently has planet by the bollocks on rare earth metals – and they’re not about to let go. Find an alternative, and find it fast. Or prepare to play serious hardball.
Update
China rare earth miners to set unified prices http://ow.ly/2nl40
Sounds like a cartel to me. It’s the beginning…