China politicizing a crucial industry

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Rare earth elements are crucial to our daily lives. They are 17 metals which are almost exclusively mined in China (97% of them). This is mainly because China is much more lenient when it comes to mining restrictions and environmental concerns than other capable nations. Rare earth elements are key materials in so many things that we use that naming them would make a list longer than this post, so I won’t even try.

Recently, China has been delaying and halting shipments of rare earth elements to Japan and possibly the U.S. With Japan, China used this maneuver in response to unrelated political issues they have with them. With the U.S., it is unclear that they actually did delay shipments as they are denying it. If they did delay them then it could be to flex their growing global muscle or to show the U.S. that they are not as strong as they once were. The U.S. is unhappy with China’s currency manipulation and is considering tougher steps against them for it. China may be sending a message that doing this will hurt them as well in many ways.

Either way, this situation is a reminder to developed countries that they need to think about changing up their rare earth elements strategy. They need to consider increasing their reserves of them and even look at alternative mining options for them. These elements often create undesired environmental problems which make it tough to find domestic alternatives. However, perhaps they can develop and invest in other developing countries. This is one potential option but whatever they decide, it is clear that they cannot let China dictate world policy in this way with rare earth elements.