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 Forecasting America's Destiny ... and the World's


Generational Dynamics Web Log for 27-Oct-2010
27-Oct-10 News -- Rare earths controversy polarizes China's relations

Web Log - October, 2010

27-Oct-10 News -- Rare earths controversy polarizes China's relations

Obama administration is becoming more confrontational with China

Rare earths controversy polarizes China's relations with the world

From China's point of view, ceasing exports of rare earth minerals makes a lot of sense outside of ideology. China needs these minerals for its own manufacturing as much as any other countries do, so the Chinese might well reason that they want to keep all of these resources available for themselves.

However, the way events played out, it appears that the Chinese are motivated entirely by revenge and ideology. The result is increasing international polarization.

Rare earth elements have to be extracted from mines, in the way that copper and iron ore are extracted, but as the name implies, they're much harder to find and extract. There are 17 metals in this category, according to Reuters, all with the names that end in "ium." The ones in biggest demand are dysprosium, terbium, neodymium, praseodymium and europium.

Rare earth elements are used in electronic devices, everything from the iPhone to hybrid cars to to military weapons. There is some concern that the U.S. military is particularly dependent on China's rare earth mineral exports.

The rare earth export ban began as an act of revenge by China following the incident last month where a Chinese fishing boat captain was arrested by the Japanese following a confrontation in waters disputed by both countries. The Japanese backed down in order to avoid antagonizing the Chinese further, but Beijing overreacted enormously. (See "26-Sep-10 News -- China turns the screws on a humiliated Japan.")

China demanded a formal apology and compensation, embargoed exports of rare earth minerals to Japan, and made additional threats. After a few days, it became clear that China had quietly embargoed rare earth mineral exports to other countries as well.

Germany is a country that depends on imports of most of its raw materials, and has been hit particularly hard by China's embargo. Germany is calling for increased international regulation of the market for rare earth minerals, according to Associated Press, and is appealing to the World Trade Organization for help.

From the point of view of Generational Dynamics, this is just one small incident in what will be an increasing number of incidents, as the level of xenophobia between China and western countries continues to increase. With almost all of these countries in a generational Crisis era, at some point, one of the incidents will cross a line that can't be ignored, and the result will be war.

Additional links

The Obama administration is no longer courting China, but has been taking an increasingly confrontational stance on such issues as exchange rates, and trade and security issues. The change in attitude reflects the current view that China has no intention of working with the United States. This is one more sign of the increasing xenophobia between China and the U.S. NY Times

Home prices in Hong Kong have almost doubled since the start of 2009, making it impossible for Hongkongers to afford a home. The price bubble is being caused by China's mainland speculators who see Hong Kong real estate as a good investment opportunity. But officials are increasingly worried that the bubble will burst. Asia Times

Turkey's role as a member of NATO is going to come under stress at the NATO summit meeting on November 16, particularly on the issue of the plans for a NATO missile shield to protect Europe from possible future nuclear missiles from Iran. Turkey has been developing closer relations with Iran, and has opposed sanctions against Iran, and will probably oppose the missile shield at the NATO summit. EurasiaNet

Osama bin Laden has been searching for someone to take over his own leadership role, and he's found Ilyas Kashmiri, and 46 year old terrorist with the experience, the connections, and a determination to attack the West -- including the United States, making him the most dangerous al-Qaeda operative to emerge in years. He's hiding out in Pakistan's tribal areas, and both Pakistanis and Americans are trying to find him. Pakistani officials fear that if Kashmiri carries out another major attack on India or in the West, their country could suffer massive retaliation. Newsweek

There's another immigration issue in Europe. Immigrants have been pouring into Greece from Turkey and many are put into prisons and camps that a UN investigation charges are "inhuman, degrading and dysfunctional." Greece has asked the EU for help, and the EU will deploy border patrols in Greece to try to stop the increasingly high numbers of immigrants crossing over. In addition, Greek premier George Papandreou and Turkish Prime Minister Recep Tayyip Erdogan have agreed to work together to solve the illegal immigration problem. At a joint press conference, Papandreou said that a "xenophobic climate" is being cultivated in Europe and hoped that bilateral co-operation with Turkey would help alleviate the trend by reducing the wave of migration. Greece and Turkey have been bitter enemies for millennia. EU Observer

In fact, anti-Muslim and xenophobic feelings are growing in Europe, and are propelling right wing policy. Washington Post

(Comments: For reader comments, questions and discussion, see the 27-Oct-10 News -- Rare earths controversy polarizes China's relations thread of the Generational Dynamics forum. Comments may be posted anonymously.) (27-Oct-2010) Permanent Link
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