China Gears Up to Weaponize Rare Earths in Trade War

As previously documented several times and warned about in the past, the threat of China’s rare earth monopol is being weaponized. This wasn’t suddenly an issue that popped up under Trump because Trump happens to be the current U.S. President. It was one threat of many in the making by China used as a means to an end, with the end game being a United States defeat — eventually militarily.

For further information, see the following previous posts:

Rare Earths Rouse Pentagon Fears

China Is Beating the US in the Rare-Earths Game

China warns of backlash if U.S. presses rare-earths case with WTO

Rare-Earth Market

Rare Earths, Oil, Gas, Other Commodities Up For Grabs As Arctic States Grants China, India, Japan, Other Select Nations ‘Observer Status’

Report: US military too reliant on foreign suppliers

China Threatens to Pull Pin on Global Economic Hand Grenade

 

China Gears Up to Weaponize Rare Earths in Trade War

The U.S. shouldn’t underestimate China’s ability to fight the trade war, the People’s Daily, a flagship newspaper of the ruling Communist Party, said in an editorial Wednesday that used some historically significant language on the weight of China’s intent.

The newspaper’s commentary included a rare Chinese phrase that means “don’t say I didn’t warn you.” The specific wording was used by the paper in 1962 before China went to war with India, and “those familiar with Chinese diplomatic language know the weight of this phrase,” the Global Times, a newspaper affiliated with the Communist Party, said in an article last April. It was also used before conflict broke out between China and Vietnam in 1979.

Continue reading

China Is Beating the US in the Rare-Earths Game

For more information regarding China and the rare earths situation, see the following previous articles:

 

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It’s time for the administration to use its powers to preserve America’s access to vital defense materials.

How to view China’s recent threat to limit domestic production of rare earths, those 16 elements that make our cellphones and smart bombs work? It’s the latest move in a game that began before the United States realized it was even playing, that has grown more complex than U.S. leaders realize, and that is nearing a very unfortunate ending. Continue reading

Cold War: U.S., Russia, China in Polar Race

 

Experts Believe As Much As $35 Trillion In Untapped Oil And Natural Gas Lurks In The Arctic Circle.

In what is being described as the “New Cold War,” the U.S., Russia, and China are all angling for the greatest share of influence and control in a part of the world few can even access. Continue reading

Rare-Earth Market

Rare earths… A topic that was explored here years ago when it realized then the implications today’s press are just starting to wake up to.

See also:

US defense industry over-reliant on rare earth from China

Rare Earths Rouse Pentagon Fears

China warns of backlash if U.S. presses rare-earths case with WTO

 

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By monopolizing the mining of rare-earth metals, China could dictate the future of high-tech.

Beyond high-tech gadgets, rare earths play a critical role in national defense, enabling radar systems and guided missiles. Ironically, they also power clean-energy technologies, such as wind turbines and electric cars. This year, global consumption is expected to be about 155,000 tons, far more than the 45,000 tons used 25 years ago. Demand will only grow — likely at an accelerated pace — as the world tries to rein in climate change. Continue reading

Space to be the next frontier for China’s air force

Not only was this China’s fifth-generation fighter, but China’s fifth-generation fighter that is equal in technology and capability with its American counterpart. The sixth-generation will have surpassed American prowess — while America is suicidally inflicting itself with budget cuts, mothballing and technical problems of its latest generation.

What’s more, it makes you wonder what China’s doing under the radar with such a large ownership share of rare earths. It’s within the realm of possibility that the PLA could in the future begin to crank these (and future generation fighters) out like Twinkies, en masse.

When the wraps came off the J-31 stealth fighter at the Zhuhai air show yesterday, there was double cause for celebration for the People’s Liberation Army Air Force. It not only marked the public debut of the country’s the fifth-generation stealth fighter, it represented the progress China has made in the 65 years since its air force first got off the ground.

The J-31 is just one of a series of fighter jets to roll off mainland military production lines in recent years. Despite the advances there remains one gaping hole in China’s winged military industrial complex – one that could stop it from realising the next mission set for it by the highest echelons of power.

Whatever their individual missions, the various jets fighters and aerial drones are building blocks for China’s aim to push the next frontier – space. Continue reading

Rare Earths, Oil, Gas, Other Commodities Up For Grabs As Arctic States Grants China, India, Japan, Other Select Nations ‘Observer Status’

It won’t be long before the essential raw minerals and commodities of the planet’s Far North such as rare earths, oil and gas get gobbled up by the industrialists.

On Wednesday, the Arctic Council granted China, India, Italy, Japan, Republic of Korea and Singapore new Observer States status. Essentially, the six nations gained rightful entry to listen in on meetings of the council, as well as propose and finance policies. Continue reading

Rare Earths Rouse Pentagon Fears

Specifically, to buy rare earth and other minerals that are crucial to the U.S. defense industry, and whose supply is currently at the mercy of China and its opaque political system. Japan, for example, was starved of rare earth elements during a maritime dispute with China in 2010. The United States wants to hedge that risk, given the damaging consequences an abrupt clampdown could entail. Continue reading

China Threatens to Pull Pin on Global Economic Hand Grenade

A senior adviser to the Chinese government has called for an economic attack on Japan’s bond market to crash the yen and drive the country into submission, reported the Telegraph on September 18.

The threat comes as Japan and China vie over ownership of the Senkaku group of islands located between the two nations.

Jin Baisong, who holds a position at a branch of China’s Commerce Ministry, noted that China has become Japan’s most important creditor. China should use its $230 billion of Japanese bonds “in the most effective manner” and ignite a budgetary debt bomb in its eastern neighbor, he said.

He also indicated that China should starve Japan of rare earth elements. China supplies around 95 percent of the world’s rare earth metals, which are used in many hi-tech applications including military machinery. “It’s clear that China can deal a heavy blow to the Japanese economy without hurting itself too much,” he said.

Jin’s threats may be directed at Tokyo, but America should take note because they could just as easily be aimed at the Red, White and Blue—and maybe they are.

Under President Obama, America has publicized its Pacific Maritime strategy as the cornerstone of its defense policy. Under this reorientation of American power, America is working to string together the various smaller Pacific nations into an economic and military alignment against China. In this context, America has often referred to its ally Japan and its many islands as its “unsinkable aircraft carrier” in the region. Japan is America’s most important Asian ally.

If America does not strongly back Japan, it risks having its Pacific strategy revealed as an empty shell. If China can force Japan to back down, it will be a huge signal for other Southeast Asian nations to submit to China. Japan’s only other choice would be rearmament. To this point, Japan has opted for a small military in exchange for American support. If U.S. support is ever seen as unreliable, Japan will be forced to re-militarize. A rearmed Japan will be much more independent and less America-centric in its policies.

Yet America has to be very careful in its dealings with China too. America conducts 2½ times more trade with China than it does with Japan. The U.S. federal government has also borrowed a whopping $1.3 trillion from China (and Hong Kong). China also owns another half trillion or so in other U.S. dollar debt assets.

China has its fingers on the pin of a much bigger hand grenade.

And there is no doubt that China considers America’s debt as a weapon to be used too. Back in 2007, Xia Bin, a cabinet-rank minister, stated that China’s foreign reserves should be employed as a “bargaining chip” in trade talks with the U.S. That same year, as China and America hammered out a trade deal, He Fan, an official at the Chinese Academy of Social Sciences, went even further, warning that China could obliterate the greenback if it so desired. “China has accumulated a large sum of U.S. dollars. Such a big sum … contributes a great deal to maintaining the position of the dollar as a reserve currency,” he said. If China’s central bank is forced to dump its U.S. currency, it “might lead to a mass depreciation of the dollar,” he said. China’s state media describes China’s huge dollar holdings as a weapon. In the past, it has referred to America’s debt pile as China’s “nuclear option,” indicating Beijing could easily trigger a dollar meltdown of massive proportions if it needed to.

America faces some tough choices. Watch to see how its massive debt leads to a weakness that will alienate its allies. America is about to lose a lot more influence within the Asia Pacific. Whether China drives Japan into submission, or causes Japan to seek military independence from Washington, America risks being effectively driven back to the beaches of Darwin and Pearl Harbor.

China has got its fingers on a global economic hand grenade, and things may be about to get ugly.

Full article: China Threatens to Pull Pin on Global Economic Hand Grenade (The Trumpet)

China warns of backlash if U.S. presses rare-earths case with WTO

“It is rash and unfair for the United States to put forward a lawsuit against China before the WTO, which may hurt economic relations between the world’s largest and second-largest economies,” the commentary said. “In [the] face of such unreasonable and unfair charges, China will make no hesitation in defending its legitimate rights in trade disputes.”

China controls 95% of the world’s supply of rare earths and has become increasingly adept at processing the minerals needed to manufacture myriad high-tech products such as cellphones, flat-screen panels and advanced weapons systems.

Beijing has restricted new mining and introduced limits to production — moves other countries have criticized as a strategy to further dominate global supplies.

Full article: China warns of backlash if U.S. presses rare-earths case with WTO (Los Angeles Times)

Niall Ferguson: China’s got the whole world in its hands

The big contradiction seems to be that a fifth of humanity is living under a communist one-party state within a free-wheeling capitalist economy – a conflict that, on the basis of history, should tear the country apart.

“The spectre of turmoil terrifies the leadership,” says Ferguson. “They face the challenge of managing a dynamic society and that is a real problem with real tensions. But I don’t buy the idea that China is about to implode or disintegrate.”

Harnessing the resurgent nationalism is part of the strategy to contain this threat. So is a policy of economic expansion overseas.

Why does this matter for the rest of the world? For one thing, Ferguson sees unnerving echoes in that mixture of shrill nationalism and overseas ambition of Germany a century ago.

China is already devouring two-fifths of the world’s coal, zinc, aluminium and copper. Now it is turning its attention to foreign territory for those basic natural resources. In Zambia, after Ferguson descends a Chinese-run copper mine, he muses: “Maybe this is the beginning of a world empire.”

Full article: Niall Ferguson: China’s got the whole world in its hands (The Telegraph)

China plants bitter seeds in South American farmland

China’s rise and push for resources will bring a whole host of other issues to come with it. Given previous actions in Africa, one can get a glimpse of what is to possibly happen in a takeover of Latin America as a result in regards to human rights. This can also have a profound effect on agricultural prices and commodities as demand rises from feeding the world’s most populous nation. Militarily, China has also for some time expanded it’s relations in America’s neglected backyard.

Few were surprised when Venezuela announced a deal with China last week to restore 1.4 million acres of unproductive farmland across the oil-rich but impoverished South American nation.

China increasingly is buying farmland and agricultural companies in South America to feed its ever-growing population, currently estimated to be 1.34 billion.

The most important aspect of China’s agricultural investment in Latin America is that “it is a part of the increasing physical footprint of the People’s Republic of China that is just beginning to occur,” said Evan Ellis, an assistant professor at National Defense University in Washington.

Mr. Ellis said that “with the Chinese becoming mine owners, petroleum-field operators, factory managers and dam builders in Latin America,” China’s farming operations there “will immerse the Chinese, with their very different culture, in one of the most politically charged phenomena in the region – the relationship between the Latin American people and their land.”

Central to China’s rising agricultural-industrial complex are soybeans from Brazil and Argentina, millions of tons of which the Chinese are importing to feed cows and pigs to meet a growing demand for meat.

Full article: China plants bitter seeds in South American farmland (Washington Times)