
China ready to hit back at U.S. with rare earths - hhs
https://www.reuters.com/article/us-usa-trade-china-rareearth/china-ready-to-hit-back-at-u-s-with-rare-earths-ruling-party-newspaper-idUSKCN1SZ07V
======
bArray
Firstly, I don't know what they expect to achieve with these threats. I think
the US has shown so far that it's not going to easily bend to such threats,
this was a bad move on their part. Maybe they knew this, hence using the media
to broadcast this message. Still, this very much sounds like escalation talk
rather than de-escalation.

Secondly, these "rare earths" aren't actually rare, most mines were simply
shut down because they weren't competitive with China. The Chinese
deliberately drove the price of various materials into the ground in order to
gain a monopoly (a security risk I think the West should have seen coming). A
local example of this was Sheffield steel.

Thirdly, if the cost of such materials was to rise significantly, hopefully it
would have the affect of removing planned obsolescence being built into
products. A mobile for twice the price might make people hold onto their
mobile devices a little longer before upgrading, for example. Hopefully we can
also get modular devices popular again with planned upgrade paths, rather than
the glued-together mess we currently deliver.

~~~
Blackstone4
It's not just about threatening the US, it's about bolstering the Chinese
moral across the nation, building a belief that China is a resilient underdog
and the world is against it but it will fight back.

~~~
ptah
that's exactly what the US propaganda also claims

~~~
_iyig
>China is a resilient underdog and the world is against it but it will fight
back

U.S. propaganda is the mostly the opposite of this. We’re supposed to be an
invincible freedom juggernaut who the whole world loves, including the poor,
oppressed people of Iran/North Korea who generally love America [actually true
in Iran, from what Persian friends tell me] and just want some drone-delivered
democracy.

The reality is of course somewhat different.

------
holoduke
It might in fact decrease pollution. Western powers will have to open up local
national mines (those rare earths aren't so rare as people think). With
tougher regulations regarding environment. At a significant cost of course.

~~~
curiousgal
The current U.S. administration is nothing but outright hostile against the
environment. Those regulations will be laxed and nothing good will come out of
this.

~~~
programmarchy
Do you think Chinese mines would pollute less than US mines? How many
environmental activists do you think exist in China?

~~~
pastullo
That's a fair point. I guess a mine like Mountain Pass in California would
still be a much cleaner site than a chinese mine, even though the EPA is now a
clown agency basically. Anyone can confirm this?

------
tomohawk
Previous administrations tried to appease the CCP, hoping to cajole them into
at least a moderate stance on human rights, etc. But the CCP is not a live and
let live sort of organization, and merely took advantage of these policies to
further their interests and wage a one sided trade war.

~~~
ksec
>Previous administrations tried to _appease_ the CCP

Somehow this reminds me of the line in the movie Darkest Hour [1] ;

 _When will the lesson be learned? When will the lesson be learned? How many
more dictators must be wooed, appeased - good God, given immense privileges -
before we learn? You cannot reason with a tiger when your head is in its
mouth._

[1]
[https://www.youtube.com/watch?v=TJ5sjFf4w1k](https://www.youtube.com/watch?v=TJ5sjFf4w1k)

------
Leary
Perhaps this will become news when it actually happens

~~~
killjoywashere
Probably enough news to boost the stock of the Mountain Pass mine (1) though.
And there's plenty of rare earths around. It wouldn't be all bad if they were
mined in first-world countries that are willing and able to regulate in a way
that forces cleaner production methods.

(1)
[https://en.wikipedia.org/wiki/Mountain_Pass_rare_earth_mine](https://en.wikipedia.org/wiki/Mountain_Pass_rare_earth_mine)

~~~
scarejunba
Mountain Pass is mostly owned by Shenghe Holding Co. anyway. What an
interesting turn of events.

~~~
killjoywashere
Interesting, how do you know it's majority owned by Shenghe? Are the other
investors shells for Shenghe?

~~~
scarejunba
No, I misremembered an old fact. It's not majotiyu owned by Shenghe

------
newnewpdro
Isn't this the _real_ reason the US went into Afghanistan?

[https://www.reuters.com/article/us-usa-afghanistan-
minerals/...](https://www.reuters.com/article/us-usa-afghanistan-
minerals/trump-ghani-agree-u-s-can-help-develop-afghanistans-rare-earth-
minerals-idUSKCN1BX06G)

------
AFascistWorld
China should be careful here, if this does not work then they are pretty much
done for, although the CCP can claim mental victory as usual as they've been
propagating it as the silver bullet.

~~~
koffiezet
While the US is a major market, but it's not the only-one. Isolation policies
do not work in a globalised economy, China isn't trying to isolate itself, the
US is.

If the US pulls this sort of erratic crap with one of its major trade
partners, others will go look for alternatives too. Yes this will hurt China,
but I think you underestimate how hard this would hit the US. This is the next
economic crisis in the making, and at least some people in the US government
seem to realise this, since the best solution for boosting the economy is
going to war. Hello Iran?

This is not China that is at fault, it's the US that's being a little cry-
baby.

~~~
toddh
Remember Big Cotton during the US Civil War? The south thought england would
take the south's side because so much of their economy was based on southern
cotton.

It didn't work. The south didn't appreciate england's disgust with slavery.
England developed other suppliers and found replacements.

Nobody is ever quite as special as they think they are. This goes for all
sides.

------
baybal2
I'm surprised why people still talk rare earth, and not tantalum.

Tantalum is the real jugular of electronics industry.

You should also note that out of all companies, US went to pressure Panasonic
— world's biggest maker of advanced capacitors.

That alone hit Huawei way way more than ban on cellphone socs and mosfets.

You can run away from SoC ban on biggest supplier, mosfet ban by switching to
domestic makers, but high spec capacitors... they are a real kill switch.

------
stunt
You can't push a country to a corner and expect them to do nothing. There are
always consequences. Sometimes smart and sometimes stupid.

------
stunt
Looking into history, Stable China normally translates to stable East Asia,
and developing China also brings development to East Asia.

I don't think we are heading in the right direction but let's assume
politicians know what they are doing. (Which often turns to be a wrong
assumption and almost always they are safe from the consequences)

------
dahacker
I think the US has a large strategic reserves for the rare earth for a year or
two. But the rare earth is not just mineral, it is a little link of the whole
supply. For now, the supply chain is totally controlled by Chinese companies.
I think the cut from China will cause the rising of many key products' price
in the US.

------
souprock
The USA has sources. Besides the natural ones, we also have coal ash and spent
nuclear fuel rods.

------
rasz
This is fantastic news, now all Trump has to do is double down and put a huge
tariff on _any_ product containing rare earth metals extracted specifically in
China.

------
varshithr
This is bad for the whole world and reduces the efficiency of the global
machine. Now countries have to explore more expensive mines to make up for the
demand which could have easily been avoided. It feels like someone is dialing
back the productivity of the entire world.

~~~
fastball
Unfortunately the global machine only works well if the parts are working
together for the greater good in the first place, which is not a given.

~~~
simonh
One country benefiting more from trade than another isn't the same thing as
the other country being worse off because of the trade. They're just not as
much better off as they could have been. The goal of these disputes should be
to reach a more equitable trading arrangement, not to stop or restrict trade
that is 'harming' countries[1].

The Idea that the US is 'losing' due to the trade deficit and that reducing
trade with China will benefit America is utter tosh and even the
administration's own trade advisers and negotiators are saying so (a bit more
politely).

[1] There are some narrow cases where trade can be harmful, or where national
interest could legitimately be served by restricting trade, but that excuse is
being used vastly disproportionately in the current disputes.

~~~
pytester
>The Idea that the US is 'losing' due to the trade deficit and that reducing
trade with China will benefit America is utter tosh and even the
administration's own trade advisers and negotiators are saying so (a bit more
politely).

The problem isn't so much the deficit as it is the way the US has been seduced
into relying upon the Chinese industrial machine.

The US industrial base has been depleting for decades. This presents a serious
systemic risk - the US relies more and more on Chinese industry which can (and
probably will, at some point) be cut off. This will result in massive
inflation.

In (neoclassical) theory getting cut off isn't a problem because the market
will simply bring all of that industry back to the United States. In practice,
the flow of goods can be cut off overnight but an industrial base on a par
with the pearl river delta would take at least two decades to build.

~~~
oblio
The "depleting" US industrial base is producing 2x what it was producing in
1990:
[https://fred.stlouisfed.org/series/INDPRO](https://fred.stlouisfed.org/series/INDPRO)
:)

Which is pretty good growth, all things considered.

Mini-rant, feel free to ignore:

The alternative perspective which assumes total US industrial domination up to
the present day (MAGA/Trump) is quite irrational considering world history:
the US had almost no real industrial competition post-WW2 when all the other
industrialized countries were either:

* shattered by wars in their homelands

* or completely cut-off from the rest of the world for 50 years...

So the industrial prowess of the US 1950 - 1970 (relative to the rest of the
world) isn't coming back, now we're just headed for a normal equilibrium. One
in which the US is still doing quite well from an industrial point of view.

~~~
simonh
Production is up, but jobs are down to about half as much as a proportion of
the population, and by about a third in real terms. But then unemployment is
quite low right now and there are plenty of un-filled jobs. Pay for low wage
earners has seen some encouraging gains over the last few years.

It's not clear the US actually needs a huge boost in manufacturing jobs.
Historically, attempts to preserve or boost jobs artificially through trade
manipulations have had limited success at massively disproportionate costs.
Anyway in absolute terms manufacturing jobs aren't exactly low, it's at about
the same level as in 1949.

~~~
oblio
Jobs are down due to automation, nobody's putting that genie back in the
bottle :)

~~~
simonh
You're right of course, but it's a double-edged sword. In a sense automation
made those jobs possible in the first place. At this point we've been
increasing automation for hundreds of years.

