CEOs of European Industries have seen how their leaders
have bowed to USA pressure and are not putting their interest as a
priority. The fact that the initial protest against the USA's 'Inflation
Reduction Act' luring European industrialist to set up manufacturing in
USA, has practically fallen silent in Europe and is making them realize
that moving their business out of Europe to China is the only way to
survive.
China has the engineers and technical support for their
manufacturing, the supply chain to cater to their needs, the raw
materials available to them, and above all cheaper energy cost.
CEOs
of European manufacturing knows that moving to the USA, as what Biden
had expected with his 'Inflation Reduction Act' is not going to work
out. USA may have cheaper energy cost compared to Europe but does not
have the supply chain needed for ease of operation, shortage of the
cluster of skilled engineers to support their operations, and if a push
comes to a shove resulting from further USA sanctions, China's
retaliation may jeopardize their source and supply of raw materials,
which they can avoid by producing in China. Above that is the consumer
market at their doorstep in China, which is essential for their output.
The
USA and the West can keep repeating their mantra of decoupling and
derisking from China, but is sounding more and more like a puff of hot
air - out of the arse.
Anonymous
1 comment:
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.
Post a Comment