Posts Tagged ‘International trade’

China’s trade surplus in 2012 was 48% higher than in 2011

January 10, 2013

China’s role as a motor for the world economy continues.

In spite of sluggish world-wide demand, Chinese exports rose 7.9 percent in 2012 from the previous year, while imports climbed 4.3 percent year on year. Xinhua reports that “China’s foreign trade for 2013 will be better than that of last year despite uncertainties, a General Administration of Customs spokesman said on Thursday. Spokesman Zheng Yuesheng said global economies have launched stimulus policies to prevent growth rates from slumping, adding that China’s domestic efforts to boost the growth of foreign trade will have more visible effects this year”.

MarketWatch: China’s trade surplus soared to $31.6 billion in December, trouncing estimates and widening sharply from a $19.6 billion surplus in November, aided by a strong growth in the country’s exports. Official data released Thursday showed exports expanded 14.1% during the month from the year-earlier period, while imports grew 6%. A survey of economists by Dow Jones Newswires estimated a trade surplus of $19.6 billion, exports growth of 4.6% and a 3.3% increase in imports. The steep increase in December’s positive trade balance boosted China’s full-year trade surplus for 2012 to $231.1 billion, 48.1% higher than the level recorded in 2011, according to a Xinhua news report.


Beijing turns the screw on rare earth materials

February 18, 2011
Wen Jiabao (温家宝), Chinese Premier

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.

Asahi reports:

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

China and the use of rare earth elements trade as a tool for diplomacy

December 28, 2010

Currently China produces about 97% of the global demand for “rare earth elements” used industrially but China has only about 36% of the world’s resources. In the last few months the Chinese have created a “crisis” both by throttling exports and by sharp price increases which have alarmed the auto and electronics industry. Japanese industry has been particularly disturbed. But it would seem that China had very clear diplomatic goals for their trade actions.

The 17  “rare earth elements” are not rare at all.

Rare Earth Elements: graphic


From Wikipedia:

Despite their name, rare earth elements (with the exception of the highly unstable promethium) are relatively plentiful in the Earth’s crust, with cerium being the 25th most abundant element at 68 parts per million (similar to copper). However, because of their geochemical properties, rare earth elements are not often found in concentrated and economically exploitable forms. Instead, they are usually found in rare earth minerals. It was the very scarcity of these minerals (previously called “earths”) that led to the term “rare earth”. The first such mineral discovered was gadolinite, acompound of cerium, yttrium, iron, silicon and other elements. This mineral was extracted from a mine in the village of Ytterby,  Sweden; many of the rare earth elements bear names derived from this location.

A table listing the seventeen rare earth elements, their atomic number and symbol, the etymology of their names, and their main usages is provided here. Some of the rare earths are named for the scientists who discovered or elucidated their elemental properties, and for their geographical discovery.

Z Symbol Name Etymology Selected Usages
21 Sc Scandium from Latin Scandia (Scandinavia), where the first rare earth ore was discovered. Light Aluminium-scandium alloy for aerospace components, additive in Mercury-vapor lamps.
39 Y Yttrium for the village of Ytterby, Sweden, where the first rare earth ore was discovered. Yttrium-aluminum garnet (YAG) laser, YBCO high-temperature superconductors, yttrium iron garnet (YIG) microwave filters.
57 La Lanthanum from the Greek “lanthanein”, meaningto be hidden. High refractive index glass, flint, hydrogen storage, battery-electrodes, camera lenses, fluid catalytic cracking catalyst for oil refineries
58 Ce Cerium for the dwarf planet Ceres. Chemical oxidizing agent, polishing powder, yellow colors in glass and ceramics, catalyst for self-cleaning ovens, fluid catalytic cracking catalyst for oil refineries
59 Pr Praseodymium from the Greek “prasios”, meaningleek-green, and “didymos”, meaningtwin. Rare-earth magnets, lasers, core material for carbon arc lighting, colourant in glasses andenamels, additive in Didymium glass used in welding goggles, ferrocerium firesteel (flint) products.
60 Nd Neodymium from the Greek “neos”, meaning new, and “didymos”, meaning twin. Rare-earth magnets, lasers, violet colors in glass and ceramics, ceramic capacitors
61 Pm Promethium for the Titan Prometheus, who brought fire to mortals. Nuclear batteries
62 Sm Samarium for Vasili Samarsky-Bykhovets, who discovered the rare earth oresamarskite. Rare-earth magnets, lasers, neutron capture, masers
63 Eu Europium for the continent of Europe. Red and blue phosphors, lasers, mercury-vapor lamps
64 Gd Gadolinium for Johan Gadolin (1760–1852), to honor his investigation of rare earths. Rare-earth magnets, high refractive index glass or garnets, lasers, x-ray tubes, computer memories, neutron capture
65 Tb Terbium for the village of Ytterby, Sweden. Green phosphors, lasers, fluorescent lamps
66 Dy Dysprosium from the Greek “dysprositos”, meaning hard to get. Rare-earth magnets, lasers
67 Ho Holmium for Stockholm (in Latin, “Holmia”), native city of one of its discoverers. Lasers
68 Er Erbium for the village of Ytterby, Sweden. Lasers, vanadium steel
69 Tm Thulium for the mythological northern land ofThule. Portable X-ray machines
70 Yb Ytterbium for the village of Ytterby, Sweden. Infrared lasers, chemical reducing agent
71 Lu Lutetium for Lutetia, the city which later became Paris. PET Scan detectors, high refractive index glass

As long as China’s own industry was not sufficiently developed to use these materials there was no crisis and production from resources in many other countries (rare earth elements are quite plentiful around the globe and not “rare” at all) were discontinued in the face of Chinese competition. The current crisis comes about because Chinese industry is now sufficiently advanced to make use of these elements and its industrial volume is large enough to absorb a large part of the production. This allowed China to use of reduction of exports and increase of prices to send strong diplomatic signals. Firstly to counter the US pressure to revalue the Yuan and second to warn Japan regarding their territorial dispute.

But this “crisis” can only be short-lived. The price increase has already led to production of rare earth elements being restarted in the US and many other countries are now planning to start production (Sweden, India, Vietnam and countries in Central Asia for example). China is no doubt well aware that their manufactured “rare earth elements” crisis will only accelerate the production of these elements from alternate sources. But what it shows is that China has the economic muscle and the willingness to now use “trade wars” as a weapon in diplomacy. But what is also a new development is the concerted response from many countries in acting together to find alternate sources and counter the Chinese might.

That Japan feels particularly vulnerable is to be expected since it does not have its own resources and is a major user. The Asahi Shimbun writes:

One reason for China’s dominance in production is the cheap cost of labor. But the country also has an advantage because deposits there can be extracted through relatively rough methods. In southern China, the weathering of a particular type of granite containing large amounts of rare earths has progressed to the right degree. Unwanted substances have been washed away in the rain, leaving soil with high concentrations of rare earth metals exposed on the surface.

“Erosion proceeds quickly in places that are warm and have a high rainfall, but if there is too much rain, erosion proceeds too quickly,” said Mitsuya Hirokawa of Japan Oil, Gas and Metals National Corp. “The necessary conditions are the existence of granite that contain lots of rare earths and the right amount of rainfall.” Southern China fulfills these conditions.

Japan has the right type of granite, but it has not eroded at the proper pace. But environmental concerns are arising from the cheaper method of extraction in China. In normal mines, rare earths are extracted by chemically processing ore that has already been removed from the ground. But in the method used in southern China, the mine itself becomes a processing factory. Acidic liquid is poured on the ground, and the dissolved rare earths are recovered from the liquid that oozes out. If the toxic liquid leaks into rivers, it could have serious consequences for the environment. “There are paddy fields in the vicinity, and there are concerns about the impact on human health,” said a researcher who observed the procedure in southern China.

This is the context under which China cites environmental concerns as the reason for restricting exports of rare earth metals. But this cheaper method of extraction is one reason why production is concentrated in China. Many mines in the United States and elsewhere could not afford to continue operating and were closed down.

Apparently, similar “convenient” deposits exist in Vietnam. Studies are under way, but production there has not yet started.

The Wall Street Journal analyses the Chinese use of trade flows as a tool of diplomacy:

Beijing’s decision earlier this year to stop shipments of rare earth minerals to Japan apparently as part of a territorial dispute raised a lot of concerns about the strategic implications of China’s growing economic strength. And well it should. Up to now, Beijing has worked hard to separate economics from politics on the world stage as part of a strategy to minimize global unease with its rise. That it is now willing to use an economic lever in a political matter suggests that approach is changing in ways that could cause trouble for the rest of the world and for China itself……..

……….Before now, trading partners were willing to take the temporary hit to trade, since they knew the episode would quickly blow over. This time, though, all major trading partners are seriously contemplating alternatives to Chinese markets in rare earth supplies. Japan, naturally, has been most active in looking for alternative sources, signing agreements with Vietnam and Australia to develop new mines or renewing production in existing mines.

Ancestors to the rescue? Mammoth ivory could reduce elephant poaching.

September 28, 2010

Elephant poaching in Africa continues fuelled by the demand for ivory – even illegal ivory. Yesterday 90kg of illicit ivory was seized entering Thailand from Ethiopia.

African elephant

Twenty years after the international trade in ivory was banned the killing of elephants for their tusks is still widespread. From a population of about 5 million African elephants in 1950, numbers reduced to about 450,000 in 1989 due to loss of habitat and the ivory trade. Since the ban in 1990 numbers have increased but only by about 100,000 and significantly less than hoped for. In 2007 45 elephants were killed by poachers in Kenya alone and in 2009 this had increased to 271. Mass poaching still occurs all over Africa and last year elephants in Sierra Leone were wiped out at its only Wildlife Park. One ton of ivory from about 100 elephants was seized in Cameroon last year on its way to China.

The Woolly Mammoth at the Royal BC Museum, Vic...

Wikipedia: Woolly Mammoth

But modern day elephants may get help from an unlikely source. Their woolly mammoth ancestors who became extinct 4000 years ago are beginning to throw their dead weight around as they emerge from under the Siberian permafrost. Every spring and summer mammoth carcases are revealed in Siberia and it is estimated that there are more than 150 million carcases preserved and recoverable. They have been recovered for thousands of years whenever they have been found. But now with the use of aerial surveys and with the high demand for ivory, mammoth ivory is beginning to be recovered in large quantities and used instead of illegal ivory. It is promoted as “ethical” ivory and the prices are high enough for Russian entrepreneurs to expand their digging.

“Russia’s mammoth ivory industry expands: what effect on elephants?”

by Esmond Martin, Chryssee Martin, Pachyderm No. 47 January–June 2010

Abstract: The commerce in woolly mammoth tusks (Mammuthus primigenius) in Russia, the main source for this raw material, has been going on for thousands of years, but during the communist period (1917-1989) the trade declined sharply. Since the early 1990s the domestic and international trade in these tusks has greatly expanded due to the freeing up of the Russian economy, more foreign visitors to the country and greater demand due to the prohibition of international trade in elephant ivory in 1990. In recent years, 60 tonnes of mammoth tusks have been exported annually from Russia, mostly to Hong Kong for carving in mainland China. Additionally, there are local carving industries in several areas of Russia, but most of the objects emerging from these locales are sold within the country. Many thousands of recently-made mammoth ivory items are for sale in Asia, Europe and North America. People wishing to buy an elephant ivory object may purchase a similar one crafted from mammoth ivory that is legal and free of cumbersome paperwork. Mammoth ivory items are not for sale in Africa. If mammoth objects were to be offered in Africa, they could serve as cover for elephant ivory items. There are pros and cons for supporting a mammoth ivory trade in respect to elephant conservation. At the moment, however, there is no evidence that the worldwide mammoth ivory trade is adversely affecting the African or Asian elephant. For this reason, and because the species is extinct and large quantities of tusks are still available in Siberia, the commerce in mammoth ivory should not be banned.

The Telegraph reports:

It is a phenomenon that has Russia’s businessmen rubbing their hands together as mammoth ivory can command a much higher price than elephant ivory and sells for as much as £330 per kilogram. Elephant conservationists are hoping that the guilt-free mammoth ivory trade continues to flourish and eventually squeezes out the illegal trade in elephant tusks altogether.

“The large quantities of mammoth tusks imported into Hong Kong, which are mostly sent to the Chinese mainland for carving, probably reduce demand for elephant ivory from Africa,” the report, in a specialist journal called Pachyderm, concluded. “This may in the long run lower elephant ivory prices and reduce incentives to poach elephants.”

Size comparison

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