Krugman strikes a rare chord

I’ve been saying it for a long time. Krugman’s latest op-ed echoes the frustrations of dealing with a nascent superpower that has the mentality of a five-year-old pointing a taser at the neighbours to see how high they jump.
On the recent Senkaku imbroglio that belatedly brought rare earths to the world’s attention:
I don’t know about you, but I find this story deeply disturbing, both for what it says about China and what it says about us. On one side, the affair highlights the fecklessness of U.S. policy makers, who did nothing while an unreliable regime acquired a stranglehold on key materials. On the other side, the incident shows a Chinese government that is dangerously trigger-happy, willing to wage economic warfare on the slightest provocation.
And the all too obvious questions now being asked:
You really have to wonder why nobody raised an alarm while this was happening, if only on national security grounds. But policy makers simply stood by as the U.S. rare earth industry shut down. In at least one case, in 2003 — a time when, if you believed the Bush administration, considerations of national security governed every aspect of U.S. policy — the Chinese literally packed up all the equipment in a U.S. production facility and shipped it to China.
Krugman’s frustration coming to the boil:
Then came the trawler event. Chinese restrictions on rare earth exports were already in violation of agreements China made before joining the World Trade Organization. But the embargo on rare earth exports to Japan was an even more blatant violation of international trade law.
Oh, and Chinese officials have not improved matters by insulting our intelligence, claiming that there was no official embargo. All of China’s rare earth exporters, they say — some of them foreign-owned — simultaneously decided to halt shipments because of their personal feelings toward Japan. Right.
And the lessons to be drawn?
First, and most obviously, the world needs to develop non-Chinese sources of these materials.
Second, China’s response to the trawler incident is, I’m sorry to say, further evidence that the world’s newest economic superpower isn’t prepared to assume the responsibilities that go with that status.
I could take a swipe at Krugman here for stating the bleedin’ obvious. Except it’s been obvious for some time and nobody has been paying attention. So I’ll give him a break for spelling it out.
Update
Only Sino novices will be surprised to learn that China today signalled more cuts in its rare earth exports: http://ow.ly/2WjkY



