(–with sincere apologies to Australian journalist Wilfred Burchett, who made reference to this story in his writings)
Sounds a lot like the story of the goose that laid the golden eggs that every child learns in the West, doesn’t it?
Western media sources have breathlessly reported for years about how Europe, North America and Japan all face dire futures because of China’s overwhelming control of the supply of real-life magic materials known as “rare earth metals.” Here are recent examples from the Wall Street Journal and New York Times.
Washington Examiner oped contributor Ron Arnold describes rare earth metals as “17 chemical elements that are absolutely essential in manufacturing hybrid cars, cell phones, missiles, computer monitors [and other electronic necessities of life in 2011]. China produces 97 percent of the world’s rare earth elements, the United States none.”
Judging by their actions, the Chinese definitely agree that they have a lock on something special when it comes to rare earth metals. And they clearly want the price of the metals to go up…and up…and up.
No less an authority than the Chinese newspaper People’s Daily said yesterday that China has imposed a new cap on “the production and smelting” of rare earth metals, no doubt in part to increase the price of what China sets aside for export to the rest of the world.
One wonders if any of the executives who lead the Chinese mining companies involved with rare earth metals see a parallel with the magic rock story above.
An (happy) unintended consequence of greedy, heavy-handed actions like this is that human ingenuity is always spurred to great leaps forward (pardon the expression) in innovation.
That extra-fuel-efficient car in your parking spot is as much the result of new research as it is of lingering fear and anxiety following the oil price shocks of the 1970s, for example.
The more China tries to boost the price of rare earth metals, the more the countries who import those materials from China will fund research into options such as: how to recycle rare earth metals and stretch their usefulness (and reduce the need to import more from China); how to reduce the amount of rare earth metals needed to make given components or products; and how to find outright subtitutes for rare earth metals. Here’s more detail on how Japan is going about pursuing each of these options.
And don’t the Chinese also see that export controls will push the US and others countries to develop new sources of supply, driving down the value of China’s share of the rare earth metal deposits by bringing more rare earth deposits online?
This is already happening. Rep. Mike Coffman (R-CO) introduced H.R. 1388, the Rare Earths Supply-Chain Technology and Resources Transformation Act of 2011, earlier this month. His intention is to “avert a U.S. rare earth supply crisis by restoring [the] nation’s production of rare earth metals,” according to a news release from his office.
China’s political leaders are probably patting themselves on the back over how they are squeezing the rest of the world by doing everything possible to boost the price of rare earth metals.
They ought to remember that story about the monks and the magic rock…or, if you prefer, the tale of the golden goose.
