The Chinese New Year begins on 14 February, ending the Year of the Ox and ushering in the Year of the Tiger. It seems to me that the tiger is already well-ensconced – witness China’s recent aggressive stances on internet censorship, the US arms deal with Taiwan and climate change. There is a growing air of supreme confidence, almost audacity, about China’s attitude to the rest of the world.
Where does this come from? China is the largest foreign owner of US debt; it has a huge currency reserve and is now passing Japan as the world’s biggest economy. Behind all this is a vast country with a huge population of obedient patriots who are used to hard-work, low pay and Spartan living. Above all they are ruled by a very well-informed, intelligent and ruthless elite of supremacists whose moves are limited only by the extent to which they can avoid loss of face. If China does something, watch out – they have thought it through and failure is not envisaged.
Perhaps the most worrying recent example of this is how China has been preparing for a forthcoming peak oil energy crisis. Whilst much of the rest of the world has been asleep, China has been doing the sums and getting ready to react. A recent deal with the Australia to import large quantities of Australian coal is just one of many strategic moves by China to secure its economic future. Perhaps the most telling of these will be China’s dominance in the production of rare earth metals such as (and especially) dysprosium, neodymium, and lanthanum. China has most of the world’s rare earth metal reserves and is already responsible for over 90% of the production of the metals. With their cheap labour costs, tolerance of environmental impacts and extensive experience in mining and processing, the Chinese are well-placed to monopolise the rare earth metal industry. With the thinly disguised aim of increasing its stranglehold on the industry, China is now moving to restrict the export of rare earth metals.
Why does this matter? The implications are huge, but many people I know seem to have little understanding about the massive and growing importance of these metals. Just about every hi-tech product depends on them – computers, TVs, energy-saving light bulbs, lasers, optical fibre communications, and so on. The list of applications is extensive. However, perhaps the most important in terms of currently identified future needs are electric batteries and motors, and wind turbines. If we are seeing these as escape routes from dependence on oil, then we better start thinking how we can join or thwart the burgeoning Chinese play for the overall control of rare earth metal production and supply.