Posted on 05/29/2019 10:30:28 AM PDT by SeekAndFind
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 an expression the publication has only used twice in history, both of which involved 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.
The phrase “Don’t say we didn’t warn you” was only used two other times in history by the People’s Daily — in 1962 before China’s border war with India and ahead of the 1979 China-Vietnam War.
“Will rare earths become a counter weapon for China to hit back against the pressure the United States has put on for no reason at all? The answer is no mystery,” the paper said.
The trade conflict between the world’s two largest economies escalated quickly this month with both sides slapping tariffs on billions of dollars worth of each other’s goods. China’s threat to restrict rare earth mineral sales to the U.S. came after President Donald Trump blacklisted Chinese telecom giant Huawei, which led to many chipmakers and internet companies cutting ties with the company.
The speculation about China’s payback first surfaced when Chinese President Xi Jinping visited rare earth mining and processing facilities in Jiangxi province during a domestic tour last week. A Chinese official warned Tuesday that products made from the materials should not be used against China’s development, which was seen as a veiled threat aimed at the U.S. and its technology industry.
(Excerpt) Read more at cnbc.com ...
China’s rare earth materials are crucial to the production of iPhones, electric vehicles and advanced precision weapons, although the imports are a relatively small part of the $420 billion U.S. goods deficit with China.
The Chinese tabloid Global Times also said Tuesday that China can play the “rare earths card” and that it’s “seriously considering” the move.
We dont border China....so whatever.
Didn’t Japan just announce they found deposits?
China will create competitors for rare earths if they do.
CNBC. Blah blah blah.
Blah blah blah.
China has no ammo.
They cannot manipulate currency exchange rates - because they already do so.
They cannot increase tariffs - as actual tariffs in China on most US goods are already over 500%. Additional tariffs will have no effect.
They cannot subsidize shipping for their exporters - they (and the US taxpayer!) already do that.
Cutting off rare earth exports will mean a short term disruption and short term somewhat higher prices as purchases will have to go through a third party.
Mining to make up any shortages will quickly ramp up in the US and Japan.
China can either start trading fairly - or collapse.
Japan has rare earth metals up the wazoo... that said, thank God the Chinese tipped their hand early.
We know where and how they’ll put the screws to us if there’s ever a war with them or one of their friends Forewarned is forearmed...
One year ago Japan found an almost limitless deposit of Rare Earth Elements of the shore of Miniamitorishima, which is somewhat close to Okinawa.
minami - south
tori - bird
shima - island
It is claimed production will take some time to set up.
Some people say part of what they talked about during Trump’s Japan trip was exactly this topic.
REE’s are actually pretty prolific, it’s just that there are lots of REGULATIONS complicating their exploitation.
I suspect DJT will be making calls to try to loosen up the regs for REE exploitation in the USA:
Most of ours are near the Mojave Desert.
“Global Times also said Tuesday that China can play the “rare earths card” ...
And capitalism can play the “alternate supplier card”. Just ask OPEC.
OK, it is true that China holds the most dominant position in rare earth production and exports.
Rare earths are not the secret weapon China imagines them to be. They’re not all that rare, the response to Beijing hoarding its supply would be production becoming economically viable and ramping up ELSEWHERE, and the ultimate outcome would be fewer jobs and fewer exports for China.
Most of ours are near the Mojave Desert.
The Chi-Coms could cause some short-term hiccups on this, but the market will solve this problem in the long run. The truth is that most so-called rare-earth metals aren’t all that rare. It’s just that they exist in such low quantities in most quarries that you have to dig up tons of ore just to process a tiny amount. China doesn’t give a damn about environmental impact, so they dominate the field. If the rare metals get more expensive because China is cutting them off, then it becomes more lucrative for other producers to come on line. Also, human ingenuity being what it is, manufacturers who use these metals will eventually figure out how to rely on substitutes.
China’s economic prosperity is more brittle than it first appears. China is already at a point where growth rate is not an output, it’s an input, meaning the government sets the goal it wants to hit each quarter and banks lend to hit that number.
Beijing has done more monetary expansion than the US Fed, the Bank of Japan, and the EU COMBINED.
This has spawned a number of toxic asset bubbles — such as in housing, which has had trickle-down consequences of people taking on debt backed by overpriced real estate.
China’s economy is closer to a pyramid scheme than a truly thriving and flourishing giant.
And of course, because the country lacks a social safety net, it cannot afford to ever take its foot off the gas, which is what the Huawei setback inevitably represents.
6.5 percent economic growth is probably the threshold below which China can’t dip if it’s to sustain its growing debt, and China reported 6.4 percent growth in the first quarter of 2019, before Trump’s harshest tariffs had taken effect.
So, what else can China do to retaliate?
Well, they could dump over a trillion dollars of US treasuries that they hold and thus trigger an interest rate spike for the US economy. A slowdown in the US economy would lead to even less appetite for Chinese exports, the US dollar might also go down in value and make Chinese goods less appealing, and whatever US treasuries China is left with would also be worth less. Isn’t this cutting off your nose to spite your face?
RE: Japan finds a huge cache of scarce rare-earth minerals
And how strong is their green movement there?
How many billion Chinese are ready to eat the rare earth they won’t trade?
Time to tariff the remaining imports from China at 25%.
Next step, embargo.
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