Wall Street Journal (October 22)
“Much has changed since Beijing sparked a rare-earths panic in 2010. China was home to 95% of the world’s production, so when it tightened export quotas by 40% and then cut off shipments to Japan over a territorial dispute, buyers world-wide feared scarcity and prices rose tenfold.” Ironically, this spurred innovation, the use of substitutes and the reopening of mines in other countries. “By 2012 the world faced a glut of rare earths. Prices collapsed as much as 80%.” The rare-earths rollercoaster demonstrates “the ability of markets and human ingenuity to adapt to ill-advised attempts to hold natural resources hostage. When they’re allowed to work, markets always defeat mercantilism—a useful lesson for Beijing’s economic reformers.”
Tags: Beijing, China, Collapse, Export quotas, Glut, Innovation, Markets, Mercantilism, Natural resources, Prices, Production, Rare earths, Scarcity, Substitutes
Wall Street Journal (October 22)
“Much has changed since Beijing sparked a rare-earths panic in 2010. China was home to 95% of the world’s production, so when it tightened export quotas by 40% and then cut off shipments to Japan over a territorial dispute, buyers world-wide feared scarcity and prices rose tenfold.” Ironically, this spurred innovation, the use of substitutes and the reopening of mines in other countries. “By 2012 the world faced a glut of rare earths. Prices collapsed as much as 80%.” The rare-earths rollercoaster demonstrates “the ability of markets and human ingenuity to adapt to ill-advised attempts to hold natural resources hostage. When they’re allowed to work, markets always defeat mercantilism—a useful lesson for Beijing’s economic reformers.”
Tags: Beijing, Export quotas, Glut, Innovation, Markets, Mercantilism, Natural resources, Production, Rare earths, Substitutes
Wall Street Journal (October 19)
“Like OPEC in the 1970s, Beijing seems willing to put the developed world over a barrel.” China has become the world’s final assembler, and aspires to more. By placing a stranglehold on the export of rare earths, Beijing thinks it can force technology transfer. If essential rare earths are difficult to attain overseas, companies will have to move high-end processes to China. The Wall Street Journal believes this gambit is unacceptable. China’s accession to the WTO in 2000 specifically forbids quotas on all products and export taxes on rare earths.
Tags: China, Quotas, Rare earths, Technology transfer, WTO
Financial Times (October 10)
When China disrupted exports of rare earths, prices of some shot six times higher. With just 36% of global rare-earth deposits, China accounts for an outsized 97% of production. China’s “stranglehold on supply” is dangerous for other countries. “Creative thinking is required if China is not to become the OPEC of rare earths.”
Tags: China, Rare earths, Supply disruption
