Is China choking off its exports of coveted rare-earth elements to the United States and Europe? The Times said so this week, and coming amid a flurry of duelling denunciations between Washington and Beijing over trade and currency, the story stirred immediate fears of a troubling new tool of retaliation. (Japan has reportedly been subject to a similar embargo since its recent standoff with China.) Even before the news broke of a potential export-ban on the U.S., Paul Krugman—America’s new China-hawk in Chief—had already warned that bringing rare earths into trade disputes puts the finishing touches on “a portrait of a rogue economic superpower, unwilling to play by the rules.”
The Chinese government denied the Times piece, but only with vague rebuttals, and it’ll be a day or so before reporters can dial up enough American importers—mostly makers of metal alloys and catalytic converters—to know if volume is sinking and at what pace. But the truth is that this is a secondary point to something that requires no sleuthing at all, because China has made it as plain as day: The Chinese government absolutely, unambiguously intends to cut its exports of rare-earth elements to the U.S.—and everywhere else.
“Having supplied a large amount of rare earth materials to the world at low prices, now it is time for China to consider about the development of its rare earth industry,” the People’s Daily said in an editorial on Monday, before anyone had said a peep about targeting the U.S. and Europe. The _Wall Street Journal editorial page found itself in the rare position of agreeing with Krugman, saying China risks crossing a dangerous line if it employs a vital resource in service of “market-distorting protectionism.” But the truth is that China has made it clear for years that it sees these as anything but simple economic assets. “Rare earth materials are not only economic resources but also strategic resources,” the People’s Daily said this week, and then it warned darkly that “many countries purchase rare earth elements to stockpile instead of immediate use.” Indeed, they are strategic—the navigation system of the M1A2 Abrams tank uses them, to take one example—and if we are disturbed by the notion of China treating them like national-security assets, we might also want to be disturbed by the fact that the U.S. did not.
