By Bronwyn Herbert

China's dominance of a set of minerals, crucial to the electrical devices that drive the modern economy, is causing tension in the international community.

Rare earth minerals are essential in most modern day devices - iPods, flat screen TVs, hybrid cars and modern weapons.

China supplies more than 90 per cent of the world's rare earths and recently cut its supply of the minerals to Japan, amid a bitter maritime spat that has caused widespread protests.

Mathew Kaleel, a director of H3 Global Advisers, an investment firm specialising in commodities, says rare earths are now being recognised as strategic minerals.

"They are required for the smart missile technology for example, a lot of the components that go into advanced computer equipment, whether its for civilian or military purposes, they need very small parts of these rare earth so they're things which are not substitutable.

"China announced that it was cutting its quotas by about 70 per cent - now when you've got a country which controls 90 per cent of the global export market cutting those exports, you are effectively pulling out over 60 per cent of global supply of these really important components," he said.

"The Japanese can't make smart phones, smart missile technology, the components for wind farms and a lot of alternative technology."

There have also been reports, denied by China, that it also had halted some rare earth shipments to American companies.

So we've finally found a use for those damn windmills.

We can dismantle them for the rare earths they contain.

It is a good lesson for companies in the electronics industries, if you buy from the cheapest source only, you become captive of that supplier, as your old suppliers go out of production.

Hell, they only have to look at our grocery trade to see the scenario played out.

Smart manufacturers keep a number of suppliers going, to avoid just this situation.

Fortunately other suppliers can be reactivated, & established, before we all die of boredom, with no TV, or bombs.

I read Hugh White’s essay. On the whole I agree with his analysis. However it’s not clear to me that the “middle way” he advocates actually exists. Sometimes you really do have to choose between unpalatable options.

To John Jawrence Ward

Rare Earth Elements (REEs) are not that rare. Extracting them is, however, a difficult and potentially environmentally damaging process.

While China does have some unusually rich ore bodies it does not have a monopoly on reserves. It came to dominate the trade because it invested heavily in the technology of extracting and processing.

Given a determined effort the rest of the world could probably make a significant dent in China’s dominance in 5 – 10 years. The present impasse is not a result of lack of alternatives but a failure of political will and foresight.

It is also important to understand that unlike, say, oil, REEs are not consumed. They can be recovered and recycled. If the price is high enough the technology to do that would be developed.

Note also that Japanese scientists are searching for ways of making do with lesser amounts of REEs in their gadgets. I have little doubt they will succeed.

The Chinese arent stupid you know. But I think the West might be.

China has all of our technology and most of our expertise thanks to globalisation and corporate greed for cheap workers. Anyone really think they will honour "licensing" agreements and IP once the hostilities start?
Rare minerals will pale in comparison to what could happen if the US pokes the Chinese tiger too many times.
Seems they have forgotten Korea and Vietnam and the total failure and defeat they endured. And they were just friends of the Chinese. 1.3 billion Sun Tzus doesnt bare thinking about.

Best friends status is what Australia should be aiming for with China. Only with that sort of relationship could we hope to influence the authoritarian regime to change for the better and also keep security for ourselves and not have to waste lives and dollars following the US to its doom in WWIII.

China has all of our technology and most of our expertise thanks to globalisation and corporate greed for cheap workers.
mikk,
you've hit the nail on head there ! Same goes for India too with all our communication & banking networks. Our problems haven't even started yet.

China can not survive without a customer base.

579, you're right, especially if you mean affluent, middle-class customers, but how many such customers are there amongst 1.4 billion people ? And this total is growing fast. The time will come when China doesn't need us, at least not as customers.

Joe

doesn't need us, at least not as customers.
First mikk & now Loudmouth, what's with this sudden foresight on OLO ? Is there a wave of enlightenment on the way ? Bloody hope so !

Bruce good to see you have a good nose for war mongering.We have the same conditions that existed pre-WW2 only this time the Corporate Nazis are on our side.

Follow this logic.The Corp elites wanted to destroy the middle classes in the West and have absolute power by giving all the production to China.Now China has all the power,they want to attack it.Who empowered China with the destruction of middle classes in the West? China needs food,energy and resources.The Corporate elites have created this dilemma.Let their children go to war this time.

I have to admit that I believe that in the last 40 years, the parties in Government in both State and Federal, have been controlled by bodies with the intent of destroying both the economy and conditions for our wage working fraternity, There seems to be no rational reason for so many of the decisions that have been made, and I believe most of them have been mainly destructive and for the benefit of foreign countries only. Sure our news papers get good returns for advertisements etc from the mining consortium and the large companies such as Woolworths and Coles, but how do these companies compare when our economy etc is taken into account? The export of our non renewable resources such as coal, iron ore, and other such resources – all of which are non value added – no employment is involved in increasing the value of these resources, and the goods we receive in return, are the same goods we had been manufacturing before the exporting of these resources and the reciprocal imports had started to take place. It doesn't matter at what area of Government decisions at which you look, there is gross corruption or stupidity. We have governments who demand that parents and School teachers must not punish children for bad behaviour, and are amazed when these children commit crimes when young and later as adults. Then We have treasurers who reduce the top tax and can't understand why we get obscene incomes on one hand and high costs of goods and services to go along with them as well as Workers having to forfeit their homes and our economy goes down the drain – of course it must be “Global”, would any lawyer (except for Paul Keating, all Prime Ministers and Treasurers since 1970, have been Lawyers), be that devoid of intelligence or integrity? Certainly, they have all reduced the top tax, which has been THE responsible cause of those obscene incomes and the destruction of the living conditions for our wage earner workers.

Thanks, Arjay, a dose of conspiracy is sometimes refreshing:

"Follow this logic. The Corp elites wanted to destroy the middle classes in the West and have absolute power by giving all the production to China.Now China has all the power,they want to attack it.Who empowered China with the destruction of middle classes in the West? ... "

Yep, the corporate classes have been working with China all along - but who is behind them, I ask you ? Isn't it obviously the Swedes ? Never a trace of evidence, that's how clever they are in covering their tracks! But go back in history and you can find ample evidence that the Swedish elites, manipulating the royal families of Scandinavia and beyond, including our own, have been infiltrating the banks, the various secret services and the trading emporiums around the world, since before the Napoleonic Wars, which incidentally gave them enormous opportunities to weaken the English, German and French monopolies in European trade and production. And this has been going on now for two hundred years ! Two hundred years !

And there is no need to go into detail about the assistance that the Swedish banks gave to the Russian and Chinese revolutionary governments, Arjay. Just take note that they now never criticise Sweden, no matter what it gets up to.

So now, the Swedish elites - under all sorts of guises - are in the box-seat to manipulate the world's most powerful economies. Now they are bank-rolling the Islamists to blow up the twin towers and disrupt world trade.

You might say: where's the evidence ? Exactly ! They hide it so skilfully - they invented mind-traps like IKEA, don't forget - and put on this act of just some dumb guys and naked blondes in saunas. But there are some of us, just a few (I thought Arjay would be one of us) who are a wake-up to their tricks. This may be the last posting I ever make now, but I hope people sit up and take notice, before it is too late.

Joe

A reasonable article from a stable where nothing but 'nags' usually come from.

But one thing is for certain.....any whining and bleating in the street from communists/progressives about "DAMN the US bases on Australian soil" should be seeen for what it is... sedition and pro China treason!

The time is approaching fast when Australia [and NZ] must decide where our best interests lie, both short term and long term.
Unfortunately, politicians are woefully versed in history and thus a rational short term approach is out of the question. Insightful long term approaches are anathema to political realities and thus they attract short term solutions [if solutions they are].

North of Australia are vast and virgin resources of energy over which China is asserting control. The East and South China seas are eyed with envy by the bordering nations, each having uncharted but legitimate claims.

In past centuries, China exerted suzerainty over most of S.E.Asia at one time or another. East of the Urals its influence frequently prevailed and throughout much of its history it was the greatest civilisation in its hemisphere.

The days of the upstart civilisations, fomer colonies unfettered by historical inhibitions, entrenched class systems and "old" wealth, must take account of a resurgence of a reconstituted Middle Kingdom in the garb of, say, the New Republic. Ever conscious of heritage as a tool of propaganda, the Chinese leadership has inculcated its citizens with the notion of natural suzerainty over its hemisphere.

What can former European colonies and smaller indigenously ruled nations in this hemisphere expect from a China, deeply enculturated to the rule of emperors, asserting its rightful control and/or influence over much of the eastern division of the Eurasian continent and a large chunk of the western Pacific Ocean?

We must not forget old friends! Human rights are insignificant points in the big game. Remember “Pig iron” Bob Menzies. We were soon to be dodging the bullets of the rising sun empire of Japan, made from our own scrap metal sales.

Remember the sacrifices of the Americans during the Pacific war won against Japan in 1945, without which we would not be basking in the sun of success as we are now.

My personal feeling is we must stand with the Americans through thick and thin to the end; whatever and whenever that may be. We owe them! Balance that ethic with the other historic chapter of the time when our most trusted friend GB abandoned the same Pacific, including Australia, to the will of the Japanese.

God bless America.

Extropian,

"a China, deeply enculturated to the rule of emperors, asserting its rightful control and/or influence over much of the eastern division of the Eurasian continent and a large chunk of the western Pacific Ocean ... "

"rightful control" ? China has the right, like any other nation, large or small, to control its own territory. It has no right to control the territory of any other country. The days of colonial power are over, not just for the British and the Tsars and the Emporer of the Rising sun, but for the Chinese too. They don't 'have a turn' at it.

As for the Paracels and the Spratleys, why not internationalise them, and form joint companies to exploit the oil and gas underneath them ?

Joe

Joe [Loudmouth] writes;

<"rightful control" ? China has the right, like any other nation, large or small, to control its own territory. It has no right to control the territory of any other country...... As for the Paracels and the Spratleys, why not internationalise them, and form joint companies to exploit the oil and gas underneath them?>

I should have used inverted commas in my own attribution of "rightful control" for I was expressing it from a Chinese POV. I was not asserting it as my opinion.

Internationalising the fields in the East and South China Seas is a worthy suggestion.

But if China [and one or two other protagonists like Japan and Vietnam and Taiwan] retort with an adamant NO!, then what are the options? A graceful exit from failure and plan B must follow.

I believe that the USA will offer all support short of active participation in a hot conflict in the western Pacific. Its ventures into East Asia have not met with the success it had hoped for. In China, it failed with the Kuomintang; in Korea it was forced to a humiliating compromise; in Vietnam and Kampuchea it failed utterly.

Question: Following WW2, why did the USA fight communism in the smaller nations bordering China rather than in a China utterly exhausted by a century of internal and external conflict and a deeply ingrained ineptitude in its political institutions?

Taking a pragmatic view............China now treats external attempts
at influence with a hauteur it has not been able to adopt for around 200 years. It has its own way of politicking and the metaphorical muscle to insist so. Disrespecting that will get you nowhere.

An acceptance of the status quo and deepening engagement in trade, cultural exchange and sport will bring peaceful transition to a more open society.

Question: Can the USA wait that long while maintaining mutuality of respect? IMHO, they've shown little inclination since WW2.

"Those who cannot remember the past are condemned to repeat it."
George Santayana