Welcome to Foreign Policy’s China Brief.
The highlights this week: China agrees to rare-earth deal with the United States, the Dalai Lama prepares to announce succession plans, and a new video game strikes a nerve among Chinese men.
China, U.S. Agree to Rare-Earth Deal
Last Friday, China signaled that it would approve a new deal allowing the export of its rare earths to the United States, marking a breakthrough following earlier U.S.-China talks in Geneva and London.
U.S. manufacturers need rare earths for a wide range of products, from computer screens to lasers. And China produces roughly 60 percent and processes more than 90 percent of the global rare-earth supply. Beijing’s decision to exercise this leverage over Washington in recent months has paid off, as China analyst Scott Kennedy writes in Foreign Policy.
But will Beijing’s pressure give it a permanent hold over Washington, or will it finally prompt the United States to rebuild a long-neglected supply chain at home?
China’s dominance of the rare-earth sector is not a result of geological fortune but of economic advantage. Rare earths, despite the name, are abundant worldwide. But following China’s opening up and modernization in 1978, Chinese rare-earth firms soon became the cheapest and most popular option. From 1978 to 1995, China’s production of rare earths grew by roughly 40 percent each year.
Early on, this growth was mostly bottom-up, but it was later encouraged by the government. Chinese scientists filed for their first international rare-earth patent in 1983, and by the mid-1990s, Chinese technology was competing with cutting-edge products in the United States.
Chinese firms acquired foreign assets, such as the U.S. firm Magnequench in 1995. Meanwhile, the spread of personal computing and then the mobile phone created massive demand for rare earths from the 1990s onward.
The United States has long been aware of the problems posed by Chinese preeminence in the sector. After China temporarily slowed the export of rare earths to Japan in 2010, it prompted the reopening of California’s Mountain Pass rare-earth mine to provide an alternative to Chinese companies amid rising demands.
For more than a decade, pundits and strategists have called to revive the U.S. rare-earth industry to reduce reliance on China. But such a large-scale project will be difficult to pull off. In 2010, the U.S. Government Accountability Office estimated that it would take up to 15 years to rebuild a domestic rare-earth supply chain.
In the 15 years since then, Mountain Pass—whose previous owners went bankrupt in 2015—is still the only facility producing and refining rare earths in the entire country. U.S. President Donald Trump’s past efforts to rebuild the industry flopped, and in his second term the president seems more committed to dismantling his predecessor’s energy legacy than rebuilding anything.
Though China doesn’t have to fear a restoration of U.S. rare-earth production anytime soon, it’s not taking any risks. A key part of any industry is personnel, and China has leveraged its lack of political freedoms to maintain its dominance in this respect.
As the Wall Street Journal reported last week, Chinese rare-earth experts are being tracked and monitored closely. Some are having their passports confiscated and held by their employers—an increasingly common practice in China today.
What We’re Following
Thai political crisis. China has expressed a desire for “stability” in Thailand after the Thai Constitutional Court suspended Prime Minister Paetongtarn Shinawatra on Tuesday. The court accused Paetongtarn of an ethics breach when she called former Cambodian leader (and family friend) Hun Sen during a recent border crisis, promising to do whatever he needed. Hun Sen later released the tape and publicly disparaged Paetongtarn, but this move was likely driven by domestic political needs rather than geopolitical demands.
Thailand is close to the United States but increasingly leans toward China. Paetongtarn’s family—a political dynasty that has played a major role in Thai politics since the 2000s—are of Chinese descent.
Paetongtarn herself has attempted to improve ties with China by supporting largely unsuccessful crackdowns on online organized crime rings operating along the Thai-Myanmar border that are known for kidnapping and scamming Chinese citizens. Her suspension will prompt some concern in Beijing, but anyone who succeeds her is unlikely to make any radical changes.
Dalai Lama announcement. The Dalai Lama is expected to formally address plans for his succession this week, ahead of his 90th birthday on Sunday. The Dalai Lama is the spiritual and, historically, secular leader of Tibet, and his position is famously transferred via reincarnation. China, which claims to have historical ownership of Tibet, views the Dalai Lama as a separatist and says it will choose his successor.
Beijing’s claim has its roots in the Qing empire, which ruled over China, Manchuria, Mongolia, parts of modern Central Asia, and Tibet from 1644 to 1911. Though Qing control of Tibet was always weak, the Qing asserted the right to control the Dalai Lama’s reincarnation using the “Golden Urn,” where the names of potential successors are put into a jar and drawn at random.
The Dalai Lama, meanwhile, has said his successor will be born outside China and urged his followers to reject the successor chosen by Beijing.
FP’s Most Read This Week
- Iran Is on Course for a Bomb After U.S. Strikes Fail to Destroy Facilities by Jeffrey Lewis
- Trump’s Iran Deal Withdrawal Comes Back to Haunt Him by Keith Johnson
- Why Russia Is Sitting Out This Round of the Israel-Iran Conflict by Dimitar Bechev
Tech and Business
COVID-19 report. Last Friday, the World Health Organization (WHO) released a new report on the origins of the COVID-19 pandemic. The report is ultimately inconclusive but leans heavily toward the hypothesis that the virus was transmitted via the wildlife trade. However, it does not dismiss the possibility of a laboratory leak, a theory the Trump administration has pushed.
China will likely take issue with the report’s dismissal of the hypothesis that the virus entered the country via cold storage, a popular theory that displaces Chinese blame for the outbreak. WHO also emphasized that it received effectively no cooperation from China in its investigation, heightening a break that began when Beijing stymied the agency’s earlier investigations.
After the outbreak of the first SARS epidemic in 2002, China promised to close key live-animal markets but failed to enforce its own regulations, making the likely outbreak of the pandemic at a Wuhan wet market very embarrassing.
Misogynistic video game. A new video game has rocketed to the top of China’s charts and struck a nerve among Chinese men. Revenge on Gold Diggers follows a male protagonist seeking revenge against women whom the game portrays as taking advantage of vulnerable men online to drain them of their assets.
The game is a reflection of broader themes circulating the Chinese internet. These online spaces are dominated by female influencers who try to sell sexually charged content without drawing the ire of censors. These women have huge followings and generous supporters online, but they have also generated anger among Chinese men, well chronicled in Hao Wu’s documentary People’s Republic of Desire.
The rise of organized crime cartels that target Chinese men for online scams has contributed to that anger but also produced cases in which women have been targeted after being falsely accused of acting as gold diggers.
The post China’s Rare-Earth Leverage Is Paying Off appeared first on Foreign Policy.
