How they see us: China digs in on rare earths

last updated 8 January 2015

The U.S. is trying to bully China into damaging our own environment, said Li Qiang in the Beijing People’s Daily. President Obama announced last week that the U.S., the European Union, and Japan were suing China in the World Trade Organization for placing an export quota on the 17 metals known as rare earths. China has 36 percent of the world’s reserves of rare earths, which are used in manufacturing high-tech products ranging from computers to lasers to hybrid cars, but it accounts for more than 90 percent of the world’s total exports, even after putting the quota in place in 2008. It is simply “unfair and unreasonable to ask the country to increase its already massive exports of rare earths.” It’s very obvious why the U.S. wants to force China to mine more of these metals and sell them at “irrationally low prices” rather than mine them on American soil. The mining of rare earths causes severe pollution, including groundwater contamination and other health hazards. Those environmental burdens make it totally justifiable for China to limit its exports. Our exports of rare earth minerals are “a good deal for developed countries, but definitely unfair for China.”

This is just another example of how the West “makes up trade rules as it goes along,” said the Beijing Global Times in an editorial. Why should China’s restriction on rare earth exports be punished when the West is allowed to block exports of high-tech goods to China? How does that make sense? And why should China even abide by a WTO ruling on this issue when the U.S. has flouted so many WTO rulings against it in the past? “Perhaps rare earth exports are not the real concern,” said Li Xun in the Beijing Liberation Army Daily. Remember, this is an election year in the U.S., and China bashing is always a popular campaign strategy. This year in particular, when the “economic recovery in Western countries is slow, unemployment remains high, and partisan conflicts are sharp,” it’s no surprise that the U.S. government is trying to change the subject to Chinese trade policy.

In the end, the U.S. has little leverage in this dispute, said the Singapore Straits Times. Its argument is that China is in effect forcing companies to move their manufacturing to China if they want to get their raw materials. But it will take two or three years for the WTO to rule, and by then, “many more Western and Japanese businesses could have relocated to China.” Then, even if the WTO rules against China, it can’t stop Chinese companies from forming an oligopoly and limiting exports on their own, without any directive from Beijing. “The best option for the U.S. and its partners would be to develop alternative supplies closer to home.” The U.S., after all, has the world’s third-largest reserves of rare earths. Why not just start mining in Colorado, Utah, and Alaska?