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China will not be bullied into submission

China Daily Global | Updated: 2019-05-30 07:26

In a thinly veiled warning that Beijing will not rule out using rare earths as a weapon to counter US attacks against Chinese high-tech companies such as Huawei, an official from the National Development and Reform Commission, China's top economic planner, said in an interview on Tuesday that "if any country wants to use products made of China's rare earth exports to contain China's development, the Chinese people would not be happy with that".

China possesses only 37 percent of the total global deposits of rare earths - a group of 17 metallic chemical elements that are widely used in everything from satellites and missiles to nuclear reactors and smartphones. Yet it accounts for more than 90 percent of global production as it controls almost all of the world's processing facilities.

"China could shut down nearly every automobile, computer, smartphone and aircraft assembly line outside of China if they chose to embargo these materials," James Kennedy, president of ThREE Consulting, wrote in the US publication National Defense last week, as Agence France-Presse reported.

Some may criticize China for violating World Trade Organization rules if it takes such an extreme step. But it would be simply following in the footsteps of the United States, which has already broken the rules by bypassing the WTO's dispute settlement mechanism and taking unilateral measures to impose protectionist tariffs on Chinese imports. It has also blacklisted Huawei while threatening bans on US companies supplying other major Chinese technology companies in an attempt to strangle China's high-tech development.

Some may brush aside China's warning as having no substance as there are plenty of other sources of rare earth minerals, so the ramifications of China's possible export restrictions would be manageable. After all, mining companies in the United States and several other countries are capable of producing rare earth minerals of their own.

But aside from the environmental impacts - the production process is heavily polluting - setting up the requisite metallurgical capabilities would take time.

And it would be naive to think that China does not have other countermeasures apart from rare earths to hand. As Chinese officials have reiterated, they have a "tool box" large enough to fix any problem that may arise as trade tensions escalate, and they are ready to fight back "at any cost".

Like it or not, a fierce battle has already been imposed on China, whose outcome may effect the country's development. Therefore, any countermeasures that China can take to safeguard its national interests are necessary and justified.

(China Daily Global 05/30/2019 page11)

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