The USA and the West are now realizing that rare earth
control by China, just one raw material of many that China dominates in
and used to retaliate against USA sanctions, is not only doing real
damage to USA's chip monopoly dream but is also hitting their war
machine as well in terms of producing new weapons. Weapons need plenty
of rare earth elements. Their missiles, submarines and warships need
hundreds of tons of rare earth elements each in order to function.
The
situation is more dire now, after practically scrapping the bottom of
the barrel to provide, albeit obsolete weapons to Ukraine, and now even
restocking the USA's stockpile of weapons is facing problems. Ukraine
and Israel are urgently in need of more ammunition to continue their
wars. Both Zelensky and Netanyahu are desperate, and both are holding
Biden hostage as to who Biden is going to save. Russia is also preparing
for a big offensive, while Iran is ready to go to war with Israel and
the USA and the West are desperate too.
Looking at the
perspective of the situation regarding rare earth, it does not escape
the eyes of those who are following the developments, there is this
realization hitting them that China is, what shall I say, 'weaponizing'
rare earth the same way the USA is weaponizing the US$. Besides rare
earth elements, China has total control of Lithium and Bauxite, two raw
materials for EVs and battery production which China can use as well.
The
USA and the West will need at least 10 to 15 years to set up the
logistics to refine rare earth and time is not on their side. Moreover,
there is always the fear that even if they were to successfully set up
those logistics at huge cost, China can still offload cheaper stuff to
kill them off. This is the one great advantage of China continuing to
have industrial overcapacity to be used in times like this. Rare earth
elements are abundant around the world, but the difficulty is getting
them out of the ground and refining them, all of which China holds the
upper hand.
So, the USA and the West better look further than
their noses in trying to bring China down to its knees with new
sanctions. It is they themselves that will go down in shame when the
shit hits the fan.
By the way, has Janet Yellen threatened China with more sanctions yet? Bring it on, says Xi.
Anonymous
2 comments:
If the USA resorts to the sanctions war further, I think China will more than weaponize rare earths.
The USA is caught between a rock and a hard place just trying to tackle the rare earth shortage issue. Attempting to cut off dependence on China is one way to avoid China's 'weaponization' move, but there is always the fear of the consequences of China flooding the rare earth market with cheaper rare earth supplies, that will ultimately decimate and make their investments into the sector an exercise in futility.
You have to read between the lines to understand that this is actually what Yellen vis a vis the USA is really worried about when she warns China's about its industrial overcapacity that it can use for retaliation.
Isn't this another example of the USA shooting its own foot? The USA thinks forming the Chips Alliance will strangle China's chip development and luring chipmakers to USA will bring China to its knees. They failed to realise that China can and will retaliate. Just like the retaliation against Trumps' trade war. They honestly do not look any further than their noses when formulating policies. Age is catching up with the clowns in the circus literally.
The USA is famously quoted to know all - known knowns, known unknowns, unknown unknowns - and obviously knew that China has total control over the essential raw materials and refining logistics for processing rare earth. They even needed China to do their refining for them all along. China wisely makes hay while the sun shines. Fatten the pigs and let them enjoy the luxury of being fed just to slaughter them when the time comes.
It is too late now for the USA and the West to set up refining facilities themselves. But they now have little choice but to do it as rare earth is needed for much of their military buildup, not to mention supplying all the chipmakers in Arizona. They brought all these problems upon themselves.
The USA is practically begging China to stop their relentless push into industrial overcapacity to give them some slack to allow them to breathe. But they still must put this begging attempt as a 'warning', with serious consequences if China does not heed their warning, to show the world that they are still in a position of strength in bargaining. It would have been better for Yellen just to tell China honestly not to kill off their venture into rare earth manufacturing as and when they are up and running, which is giving them much to think about.
On the one hand the USA is threatening and provoking China to no end, On the other hand the USA wants China to lay off retaliating and give them the other cheek to slap. This is not China during the opium war period.
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