China Will Restrict The Exports Of Gallium And Germanium Metals Vital To Chipmaking

 

Business Insider: China is restricting the export of two little-known metals crucial to the semiconductor industry. It shows Beijing still holds important chips in its tech war with the West. 

 * China will restrict the exports of gallium and germanium — metals vital to chipmaking — from August 1. 

 * Authorities said the move aims to "safeguard national security and interests." 

* The export curb is seen as a retaliatory move by Beijing amid a chip war with the West. 

China and the US are getting increasingly ensnared in a chip war that has escalated since October. 

A recent move by China to restrict the export of two little-known metals has again sent the semiconductor industry into a tailspin. 

In a Monday notice, China's commerce ministry and customs department said it plans to control the exports of two metals — gallium and germanium — along with several of their compounds from August 1 to "safeguard national security and interests."  

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WNU Editor: These restrictions are to be imposed on August 1.

 China Will Restrict The Exports Of Gallium And Germanium Metals  

China’s export controls on gallium likely to hit US defense industry: experts -- Global Times 

China Restricts Export of Chipmaking Metals in Clash With US -- Bloomberg  

China's metal export curbs a 'warning' to US and its allies - Global Times -- Reuters  

China restricts exports of high-tech metals in a slap at Washington ahead of Yellen's visit -- Reuters  

What are Gallium and Germanium? China curbs exports of metals critical to chips and other tech -- CNBC

China's gallium and germanium controls: what they mean and what could happen next -- The Conversation  

EU assessing exposure to China’s curbs on germanium and gallium exports -- SCMP 

Factbox: Companies respond to China's curbs on gallium and germanium exports -- Reuters

China Considering An Export Ban On Certain Rare-Earth Magnet Technology

China dominates the global market for rare-earth materials. © Reuters  

Nikkei Asia: China weighs export ban for rare-earth magnet tech  

Beijing looks to strike back after Washington's chip restrictions 

BEIJING -- China is considering prohibiting exports of certain rare-earth magnet technology in a move that would counter the U.S.'s advantage in the high-tech arena. Officials are planning amendments to a technology export restriction list, which was last updated in 2020. 

The revisions would either ban or restrict exports of technology to process and refine rare-earth elements. There are also proposed provisions that would prohibit or limit exports of alloy tech for making high-performance magnets derived from rare earths. In all, there are 43 amendments or additions in the draft list first announced in December by the commerce and technology ministries. 

Officials have finished taking public comments from experts, and the changes are expected to go into force this year. High performance magnets are used in a wide range of applications, such as motors for electric vehicles.  

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Update: China Plans to Ban Exports of Rare Earth Magnet Tech (Japan News/Yomiuri Shimbun)

Update #2: China Weighs Rare Earth Magnet Export Ban In Retaliation To Biden Chip Crackdown (Zero Hedge)  

WNU Editor: China is responding to changing markets .... The West is trying to cut China out of rare earths⁠—and China is noticing (Quartz). Unfortunately the US continues to shoot itself in the foot .... Biden official grilled for cutting domestic mining despite US reliance on China (ABC News).

China Moves To Dominate The Rare Earths Market

Annie Fixler & Louis Gilbertson, FDD: China Consolidates Rare Earth Supply Chain 

Peng Huagang, secretary general of China’ State-owned Assets Supervision and Administration Commission, confirmed last month that the Chinese Communist Party (CCP) will “promote the restructuring of rare earths to create a world-class company.” While it remains unclear what this “restructuring” entails, Peng’s declaration indicates the CCP will not stand by as the United States and its allies seek to diminish their reliance on China for rare earth elements.

Peng’s remarks come on the heels of China Minmetals Corporation’s September Shenzhen Stock Exchange filing, which announced a planned restructuring with China Aluminum Company (Chinalco) and the People’s Government of Ganzhou, a municipality in southeastern China. A merger would create China’s “second-largest rare earth producer by capacity,” according to Reuters, behind China Northern Rare Earth Group. The latter is the world’s largest supplier of rare earths.  

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WNU Editor: I am not sure if China will succeed. The US can easily bust up this monopoly by guaranteeing to purchase rare earths only from Western producers at a set price and duration.

China Exploring Options To Cripple U.S. Defense Contractors By Limiting Rare Earth Exports

Australian Financial Review/Financial Times: China targets rare earth export curbs to hobble US defence 

Beijing/Washington | China is exploring whether it can hurt US defence contractors by limiting the export of rare earth minerals crucial for the manufacture of F-35 fighter jets and other sophisticated weaponry, according to people involved in a government consultation. 

The Ministry of Industry and Information Technology (MIIT) last month proposed draft controls on the production and export of 17 rare earth minerals in China, which controls about 80 per cent of global supply.

Industry executives said government officials had asked them how badly companies in the US and Europe, including defence contractors, would be affected if China restricted rare earth exports during a bilateral dispute. 

“The government wants to know if the US may have trouble making F-35 fighter jets if China imposes an export ban,” said a Chinese government adviser who asked not to be identified. 

Industry executives added that Beijing wanted to better understand how quickly the US could secure alternative sources of rare earths and increase its own production capacity. 

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WNU Editor: The U.S. is taking steps to break China's monopoly on these minerals .... The US is taking steps towards breaking China’s rare earths monopoly (Quartz). 

 More News On China Exploring Options To Cripple U.S. Defense Contractors By Limiting Rare Earth Exports 

China Eyes Rare Earth Export Curbs for U.S. Defense, FT Says -- Bloomberg 

China considering rare earth export controls to target US defense production: Report -- Taiwan News China may exercise ‘nuclear option’ against US defense industry with rare-earths export ban – reports -- RT 

China Threatens To Hobble US Defense Industry By Limiting Export Of Rare-Earth Metals -- Zero Hedge

China Warns That It May Limit The Export Of Rare Earths To The U.S.

China US Photo: VCG 

Global Times: China may restrict rare-earth imports, issue financial blockades over US arms sale to Taiwan: analysts 

China announced to sanction firms including Lockheed Martin, Boeing Defense, Raytheon as well as individuals and entities that are involved in arms sales to the island of Taiwan. 

The latest response with unprecedented scale and strength against firms, individuals and entities involved in the arms sale came after an event in China to commemorate a war against US aggression in Korea 70 years ago.

It sends a clear signal that China's decision-making won't be disturbed by the US and any acts that have undermined China's sovereignty, security and development interests are bound to face serious consequences, analysts said. 

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WNU Editor: China knows these restrictions will have an impact ....

.... For instance, many of Lockheed Martin's key products, including F-35 fighter jets and Patriot missiles, rely on components made with rare earths, analysts said. China is the world's largest rare-earth exporter, and the US imports about 80 percent of the rare earth it needs from China, reports said. 

This limit on rare earths exports will be in addition to these sanctions .... China To Impose Sanctions On The Defense Units Of Raytheon, Lockheed & Boeing For Their Arms Sales To Taiwan.

The Pentagon Is Finding Out How Difficult It Is To Secure Weapons-Grade Minerals Without China

Matt Green, mining/crushing supervisor at MP Materials, displays crushed ore before it is sent to the mill at the MP Materials rare earth mine in Mountain Pass, California, U.S. January 30, 2020. REUTERS/Steve Marcus

Reuters: American quandary: how to secure weapons-grade minerals without China

MOUNTAIN PASS, Calif. (Reuters) - The United States wants to curb its reliance on China for specialized minerals used to make weapons and high-tech equipment, but it faces a Catch-22.

It only has one rare earths mine - and government scientists have been told not to work with it because of its Chinese ties.

The mine is southern California’s Mountain Pass, home to the world’s eighth-largest reserves of the rare earths used in missiles, fighter jets, night-vision goggles and other devices.

But the U.S. Department of Energy (DOE) has told government scientists not to collaborate with the mine’s owner, MP Materials, the DOE’s Critical Materials Institute told Reuters.

This is because MP Materials is almost a tenth-owned by a Chinese investor and relies heavily on Chinese sales and technical know-how, according to the company.

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WNU Editor: The ongoing Covid-19 pandemic has shown to the world how unreliable China is. Couple this with past Chinese threats to use rare earths in disputes, it is understandable why the Pentagon wants alternative sources .... China Raises Threat of Rare-Earths Cutoff to U.S. (Foreign Policy). I do expect the U.S. will quickly secure weapons-grade minerals that are independent from China. It will be more expensive, but consider how important these minerals are, it is a price that many will be willing to pay.

Pentagon To Stockpile Rare Earth Magnets For Missiles, Fighter Jets, Communications, And Hi-Tech Weapons

FILE PHOTO: A front-end loader is used to reinforce a safety berm inside the open pit at a rare earth facility in California June 29, 2015. REUTERS/David Becker/File Photo

Reuters: Exclusive: Pentagon to stockpile rare earth magnets for missiles, fighter jets

(Reuters) - The U.S. military plans to stockpile rare earth magnets used in Javelin missiles and F-35 fighter jets, according to a government document seen by Reuters, a step that critics say does little to help create a domestic industry to build specialized magnets now made almost exclusively in Asia.

The Pentagon is seeking proposals to cache a rotating six-month supply of neodymium iron boron (NdFeB) magnets, a type of rare earth magnet essential to weapons manufacturing, according to the document, detailing the latest attempt to weaken China’s control over the rare earths sector.

Beijing has been using that prowess for leverage in its trade war with Washington.

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WNU Editor: This does not solve the long term problem of having a stable supply of rare earths that is independent of China.

U.S. Army Is Investing In A Rare Earths Production Plant

In a photo taken on June 29, 2015, a piece of ore containing rare earths is shown during a tour of a California mine.PHOTO: REUTERS

Reuters: Exclusive: U.S. Army will fund rare earths plant for weapons development

(Reuters) - The U.S. Army plans to fund construction of rare earths processing facilities, part of an urgent push by Washington to secure domestic supply of the minerals used to make military weapons and electronics, according to a government document seen by Reuters.

The move would mark the first financial investment by the U.S. military into commercial-scale rare earths production since World War Two’s Manhattan Project built the first atomic bomb.

It comes after President Donald Trump earlier this year ordered the military to update its supply chain for the niche materials, warning that reliance on other nations for the strategic minerals could hamper U.S. defenses.

China, which refines most of the world’s rare earths, has threatened to stop exporting the specialized minerals to the United States, using its monopoly as a cudgel in the ongoing trade spat between the world’s two largest economies.

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Update: Army investing in rare earths production: report (The Hill)

WNU Editor: Electronics need rare earths to work .... especially in advanced weapon systems and communications. I am surprised that it has taken the US this long to address this vulnerability.

Pentagon Is In A Race To Secure A Supply Of Rare Earths In The Event That China Decides To Curb Exports

Heavy mining vehicles haul ore at the rare earth facility in Mountain Pass, California, in June 2015. Photo: Reuters

Reuters: Exclusive: Pentagon races to track U.S. rare earths output amid China trade dispute

The Pentagon is rapidly assessing the United States’ rare earths capability in a race to secure stable supply of the specialized material amid the country’s trade conflict with China, which controls the rare earths industry, according to a government document seen by Reuters.

The push comes weeks after China threatened to curb exports to the United States of rare earths, a group of 17 minerals used to build fighter jets, tanks and a range of consumer electronics.

The Pentagon wants miners to describe plans to develop U.S. rare earths mines and processing facilities, and asked manufacturers to detail their needs for the minerals, according to the document, which is dated June 27.

Responses are required by July 31, a short time frame that underscores the Pentagon’s urgency. The U.S. government’s fiscal year ends in September.

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Update: Pentagon Looks To Break China’s Monopoly On Rare Earth Minerals (OilPrice.com)

WNU Editor: People have been talking for years that being dependent on China for rare earths was (and is) a recipe for disaster, especially when it comes to national security. It looks like someone finally woke up in the Pentagon that the time to act is now.

What Will The U.S. Defense Industry Do If China Cuts Off Rare Earth Supplies?

China is by far the world's largest exporter of rare earth minerals, producing more than 95 per cent of the chemical elements used worldwide, or 120,000 tonnes every year

Jeffery A. Green, Defense News: What will the US defense industry do when China cuts off rare earth supplies?

On June 17, Chinese state-controlled media again threatened disruption of rare earth supplies to the United States — this time targeting U.S. defense contractors. The astonishing threat noted that “military equipment firms in the United States will likely have their supply of Chinese rare earths restricted” and follows calls just weeks ago to shut off rare earth supplies to the United States.

The latest comments follow a meeting of China’s state economic planner, the National Development and Reform Commission, or NDRC, which announced the study and formulation of new export controls to go into effect “as soon as possible.” These controls differ from previous embargo and boycott threats by singling out U.S. defense manufacturers, along with contractors that refuse to do business with Huawei.

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WNU Editor: The Pentagon is starting to implementing this plan .... Pentagon Develops Plan To Cut U.S. Reliance On Chinese 'Rare Earth' Minerals (May 30, 2019).

Pentagon Develops Plan To Cut U.S. Reliance On Chinese 'Rare Earth' Minerals

China is by far the world's largest exporter of rare earth minerals, producing more than 95 per cent of the chemical elements used worldwide, or 120,000 tonnes every year

Daily Mail: Pentagon produces secret plan to cut U.S. reliance on China for 'rare earth' minerals - essential for nuclear power plants and LED lights - after Beijing uses a coded message for WAR to hint it will ban exports

* Pentagon sends report to Congress on 'rare earth' minerals, almost all of which are imported from China
* Chinese state media warned the U.S. not to underestimate Beijing's capabilities
* It used a diplomatic term usually reserved by officials to signal the start of a war
* It also said it wouldn't be hard for Beijing to make a decision over rumored ban
* 'It's unarguable that the U.S. depends highly on the global supply chain,' it wrote
* The minerals are used in high technology applications vital to everyday life, from nuclear reactors to medical scanners

The U.S. Defense Department has submitted a report to Congress on rare earth minerals as it looks to reduce American reliance on China, the Pentagon said on Wednesday, amid mounting concern in Washington about Beijing's role as a supplier.

Although the Pentagon did not provide details of the report, it said it was tied to a federal program designed to bolster domestic production capabilities by offering 'tailored' economic incentives.

The move came hours after China hinted that a trade war with the U.S. could lead to real war with a coded warning as it threatens to stop exporting essential 'rare earth' minerals.

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More News On The Pentagon Developing A Plan To Cut U.S. Reliance On Chinese 'Rare Earth' Minerals

Pentagon seeks funds to reduce U.S. reliance on China's rare earth metals -- Reuters
Pentagon Working on Reducing US Reliance on Chinese Rare Earth Minerals -- Sputnik
U.S. Fighter Jets and Missiles Are in China’s Rare-Earth Firing Line -- Bloomberg
China's next move in the trade war could cripple US F-35 stealth fighter production -- Business Insider
China could use rare earth metals embargo to land killer blow on US defense industry -- RT
Pentagon says US-China trade war won’t ‘spill over’ into military talks -- CNBC

China Threatens To Use Rare Earths In Its Trade War With The U.S.

CNBC: ‘Don’t say we didn’t warn you’: A phrase from China signals the trade war could get even worse

* “We advise the U.S. side not to underestimate the Chinese side’s ability to safeguard its development rights and interests. Don’t say we didn’t warn you!” the People’s Daily said in a commentary titled “United States, don’t underestimate China’s ability to strike back.”
* The phrase “Don’t say we didn’t warn you” has been used by the People’s Daily in 1962 before China’s border war with India and ahead of the 1979 China-Vietnam War.
* China threatened it would cut off rare earth minerals as a countermeasure in the escalated trade battle. The materials are crucial to the production of iPhones, electric vehicles and advanced precision weapons

The biggest Chinese newspaper explicitly warned the U.S. on Wednesday that China would cut off rare earth minerals as a countermeasure in the escalated trade battle, using a history-laden expression the publication has used ahead of full-on wars.

“We advise the U.S. side not to underestimate the Chinese side’s ability to safeguard its development rights and interests. Don’t say we didn’t warn you!” the People’s Daily said in a commentary titled “United States, don’t underestimate China’s ability to strike back.” The publication is the official newspaper of the Communist Party of China.

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China Threatens To Use Rare Earths In Its Trade War With The U.S.

Trade War Tensions Rise As China Threatens Rare-Earth Export Ban -- Investors.com
China Ready to Weaponize Rare Earths in Trade War -- Money Markets
China has been dropping hints that it will weaponize its rare earths as a trade-war tactic. Here's why it probably won't follow through. -- Business Insider
Rare earths could be the next front in the US-China trade war. Here's what you should know -- Sherisse Pham and Julia Horowitz, CNN Business

China Threatens To Use Its Supply Of Rare Earths In The Current Trade War With The U.S.

“If any country wants to use products made of China’s #rareearth exports to contain China’s development, the Chinese people would not be happy with that,” a Chinese official said when asked about whether rare earth will be used as a countering weapon in the China-US #tradewar. pic.twitter.com/AH1XpgUrew

— Global Times (@globaltimesnews) May 28, 2019

CNBC: China appears to make veiled threat about rare earth minerals crucial to US technology industry

* A Chinese official warned that products using China’s rare earth minerals should not be used against China’s development.
* The comment from the official, from the Chinese economic planning agency, was seen as a veiled threat aimed at the U.S. and its technology industry.
* But analysts believe it would be difficult for China to immediately use the materials against the U.S. since U.S. imports of rare earths are relatively small, but the minerals are embedded in all sorts of technology, like cell phones and computers.

Speculation that China could use its dominance in rare earth minerals as a weapon in the trade war intensified after a Chinese official warned that products made from the materials should not be used against China’s development.

The comment, reported by CCTV, was taken as a veiled threat aimed at the U.S. and its technology firms who are dependent on the materials. Last week, China President Xi Jinping visited rare earth mining and processing facilities, adding to speculation that China could make the minerals more expensive or unavailable if the trade war continues to expand.

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Update #1: China could unleash a secret weapon in the tech Cold War (Business Insider)
Update #2: China ‘seriously considering’ restricting rare earth exports to US – Global Times chief (RT)

WNU Editor: This is the second time that China has issued this threat. Are they serious? I think they are bluffing. Blocking exports of rare earths is only going to motivate other world suppliers to step in and expand their production of these minerals.

China Is Threatening To Cut Rare Earths Exports To The U.S.

Chinese President Xi Jinping, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, learns about the production process and operation of the JL MAG Rare-Earth Co. Ltd. as well as the development of the rare earth industry in the city of Ganzhou in east China's Jiangxi Province on May 20, 2019. Xi Jinping visited Jiangxi Province Monday on an inspection tour. (Xinhua/Ju Peng)

Bloomberg: Xi’s Trip to Rare-Earths Plant Stokes Talk of Trade Retaliation

President Xi Jinping’s visit to a rare earths facility fueled speculation that the strategic materials could be weaponized in China’s tit-for-tat with the U.S. on trade.

Shares in JL MAG Rare-Earth Co. surged by their daily limit Monday after state news agency Xinhua said the Chinese president had stopped by the company in Jiangxi. Official news outlets give regular updates on the whereabouts of top leaders, sometimes leading to share spikes on the belief that companies have been handed official backing.

But the visits may also flag policy priorities, and rare earths have featured in the escalating trade spat between the U.S. and China. The Asian country raised tariffs to 25% from 10% on American imports, while the U.S. excluded rare earths from its own list of prospective tariffs on roughly $300 billion worth of Chinese goods to be targeted in the next wave of measures.

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Update #1: Xi Sends Trump A Message: Rare-Earth Export Ban Is Coming (Zero Hedge)
Update #2: Xi’s visit boosts China’s critical rare-earth sector (Global Times)
Update #3: China Threatens To Cut Rare Earths Supplies To The U.S. -- Bad Idea (Panos Mourdoukoutas, Forbes)

WNU Editor: Chinese state media are bluntly saying that this is an option that is open .... US need for rare earths an ace in Beijing’s hand (Hu Weijia Source, Global Times). More here .... US faces squeeze on rare earths (Global Times). Not surprising that some companies are now thinking of building rare-earth procession plants in the U.S. .... Australia's Lynas plans new processing facility in the U.S. (Reuters).

Will China Use 'Rare Earths' In Its Trade War Against The U.S.?

Jeff Spross, The Week: How China can win a trade war in 1 move

China will not be easily cowed in a trade dispute. Chinese President Xi Jinping is now exchanging threats of tit-for-tat tariffs with President Trump, who announced Thursday he's considering raising the stakes another $100 billion. China vowed to defend itself "at any cost."

Compared to the scale of the U.S. economy, the numbers are still relatively trivial and mostly theoretical. But if things do spiral into all-out trade war, it's worth noting China has a nuclear option.

I'm referring to rare earth metals.

These are elements like dysprosium, neodymium, gadolinium, and ytterbium. They aren't actually rare, but they do play crucial roles in everything from smart phones to electric car motors, hard drives, wind turbines, military radar, smart bombs, laser guidance, and more. They're also quite difficult to mine and process.

It turns out the United States is almost entirely dependent on foreign suppliers for rare earth metals. More importantly, it's almost entirely dependent on China specifically for rare earth metals that have been processed into a final and usable form.

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WNU Editor: The Chinese have used rare earths as a weapon before .... Rare Earths Trade Dispute (Wikipedia). And in the case of Japan, they lost .... How China's "Rare Earth" Weapon Went From Boom To Bust (Gizmodo).

Is U.S. Weaponry Now Dependent On China?

60 Minutes/CBS News: Modern life's devices under China's grip?

From smartphones to cars and defense missiles, modern U.S. life depends on rare earth elements but China dominates the industry

Editor's Note: In September 2014, while we were working on this story, a Pentagon spokesman emailed us to say:

"The Department of Defense is confident in the ability of the defense industry to remain supplied with all necessary rare earths for U.S. defense acquisition programs. The Department continuously monitors and assesses its raw materials requirements, and if necessary, will again take action to ensure their availability to the defense industrial base."

That confidence is at odds with the Pentagon's Inspector General's Office, which issued a report on July 3, 2014 that concluded:

"DoD [Department of Defense] lacked a comprehensive and reliable process to assess REE supply and demand.... [and] As a result, DoD may not have identified all REEs with expected shortfalls, increasing the risk that those shortfalls will adversely affect critical weapons systems production in the DIB, and overall DoD readiness."

Update: U.S. weaponry dependent on China? -- 60 Minutes/CBS News

WNU Editor: A good summary on why rare earths are valuable and essential for modern societies and for modern militaries.

The Geopolitics Of Rare Earths

Image Credit: Wikimedia Commons

Adam Minter, Bloomberg: The Geopolitics of 17 Very Obscure Minerals

WNU Editor: Rare earths are critical minerals used in essentially everything. China has a dominant position on these minerals because they subsidize their extraction and production to a level that makes it uneconomical for any other country/company to compete against. Will China's monopoly continue .... probably .... but they are going to be paying dearly to have that "strategic privilege" .... and one that can only be used if they decide one day to use it in a political crisis.

On a side note .... one reason why China has always been accommodating to North Korea is because of this .... North Korea Possesses Two-Thirds Of The World’s Rare Earths.

Are Rare Earth Metals The Next Oil?

The Next Oil?: Rare Earth Metals -- Elliot Brennan, The Diplomat

Rare earth metals are quickly becoming the next important strategic resource. For many countries in Asia, the stakes are big.

Rare earth metals (REM) are increasingly becoming a critical strategic resource. The 17 elements can be found in most high-tech gadgets, from advanced military technology to mobile phones. China currently holds claim to over 90 percent of the world’s production. As global demand increases, Beijing’s export reductions in recent years have forced high-tech firms to relocate to China and forced other governments to pour money into their exploration and production. An emergent India is among those concerned about China’s control of rare earths. In the past 12 months, the geopolitics of rare earths has become evident. REMs are becoming a strategic resource over which the two emerging giants are competing in Asia. Indeed, one might say rare earths are fast becoming “the next oil.”

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My Comment: A good review on why rare earths play a vital role in today's modern economy .... and why they are essential to the defense industry.

Pentagon And Japan Are Working together To Break China's Monopoly On Rare Earths

A rare earth mine in China. Rare earths are essential to many technology products, and China provides most of the world’s supply. Reuters

Pentagon Challenges Chinese Monopoly On Rare Earths -- Stars and Stripes/Bloomberg

The Pentagon and Toyota are trying to crack China's global monopoly on mining the most valuable rare earths used in unmanned military drones and electric-car motors.

The U.S. Department of Defense and Asia's biggest carmaker are working with Canada's Ucore Rare Metals and Matamec Explorations, which are developing North American mines that would boost supplies of so-called heavy rare earths. Those are the less abundant members of a group of 17 chemically similar elements critical to make a host of products from wind turbines to high-performance magnets for cars and weapons.

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My Comment: It is not only because China is restricting exports that concerns customers like the Pentagon and Japan, but it is also because there is legitimate fear that China will ban exports to governments that it is in disagreement with.

How Beijing Cornered The Rare Earths Market

China Digs It: How Beijing Cornered the Rare Earths Market -- Damien Ma, Foreign Affairs

In September 2010, after Japan arrested a Chinese fishing boat captain in disputed waters in the East China Sea, Beijing allegedly retaliated by holding back shipments to Tokyo of rare earths, a group of 17 elements used in high-tech products. Arcane names such as cerium, dysprosium, and lanthanum -- elements that populate the bottom of the periodic table and whose unique properties make them ideal materials in the batteries that power iPhones and electric vehicles -- suddenly commanded global attention. It mattered little whether Beijing actually carried through with the threat (reports are murky), the damage was already done: The world had awoken to the fact that overreliance on China for rare-earths supplies could put the international high-tech supply chain at risk.

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My Comment: Bottom line .... it was (and still is) all about the money, and China's determination to get more for the products that it manufactures. But like all things that involves the market place .... the Chinese may have the advantage now .... but as costs escalate and supply consistently is in doubt .... China's position may just as quickly change.