Wen Jiabao: Image via Wikipedia
The Chinese Government is taking steps to keep control of the development, production and export of rare earth materials under state corporations. Until production from alternate sources in Vietnam, Afghanistan, India, Sweden and other countries are ramped up, production and export of rare earth materials is likely to be used as an instrument of Chinese foreign policy. This leaves Japan particularly vulnerable and is likely to speed up the Japanes investment in the production of these materials in other countries.
CHONGQING, China–In a move likely to strain already scarce supplies of rare earth materials worldwide, China will introduce new controls on production and export of the elements crucial for electronics and environmental technologies.
According to the state-run Xinhua News Agency, Chinese Premier Wen Jiabao instructed a State Council standing committee meeting Wednesday to designate rare earth materials as an important strategic resource, and implement measures to strengthen government control over the materials.
With many players fighting over the largely unregulated market, from state corporations to small firms, Beijing, worried about smuggling and rampant environmental destruction, has decided to step in. Beijing plans to grant authority to develop and manage rare earths to state corporations to allow better oversight and control.
The state will also decide export volumes each year after assessing domestic demand and price trends in global markets. Watchers have said the measures are primarily designed to allow Beijing to use its control over the materials as a strategic diplomatic tool.
China has already taken steps to further its control over rare earths production this year, by designating Jiangxi province a nationally administered mining district for rare earths. Under the arrangement, natural deposits will be monitored by Beijing, and exploration and mining will be conducted under close control by the government.
Related: China and the use of rare earth elements trade as a tool for diplomacy
Tags: China, exports, International trade, Jiangxi, production, rare earth elements
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