China Radio: Rare Earth Dispute at WTO
This Monday, I was on China Radio International (CRI)’s “Today” program, talking about the latest case brought to the WTO by the U.S., E.U., and Japan challenging China’s export restrictions on rare earth minerals. The discussion — with Xiang Songcuo, chief economist at the Agricultural Bank of China (AgBank) and Mike Bastin, a researcher at the University of Nottingham’s School of Contemporary Chinese Studies — made for a lively debate. You can listen to the program here or download it here.
For further background on the topic, you can check out my earlier posts on China’s 2010 cut-off of supplies to Japan and its immediate fall-out, as well as a similar WTO case that China recently lost and efforts to circumvent China’s near-monopoly. There’s also this research report by the U.S. Geological Survey (USGS) which provides some useful data on China’s estimated reserves as well as production, export, and policy trends. And here is a Wall Street Journal article on China’s efforts to build a strategic stockpile of rare earth minerals, one of the things I mentioned on the air.
Patrick Chovanec 
What do you think, Patrick? Is it not yet another game the US plays to get China?
http://www.atimes.com/atimes/China/NC24Ad01.html
Interesting debate. Mr. Xiang says that China is restricting to domestic as well as international customers, but it sounds like that’s simply untrue. How are they able to justify that selling to Chinese companies (or stockpiling) isn’t bad for the environment, but selling to foreigners is environmentally damaging? His little aside about the US using rare earths to build weapons to contain China was amusing. True motives revealed?
Mr. Bastin’s opinions are very odd. He says that US mines getting undercut by Chinese miners is somehow the US government’s fault? I don’t think it’s the US government’s responsibility to prop up noncompetitive industry, so I don’t understand that point at all. Also, Mr. Bastin’s excuse that the world has to wait while China learns WTO rules was pretty hilarious. I’m glad he got slam dunked on by the host. I also don’t see how Chinese rare earth is an election issue either…wouldn’t reopening the US mines create more jobs in the US anyway?
This was an interesting debate, but it seems that the only real dispute is whether domestic buyers are also facing quotas. This is a question of fact rather than a disagreement over legal interpretation. This is good news in that it makes the case quite simple, but bad news because it brings an element of distrust to the issue: are the Chinese “hiding” domestic sales? This sentiment is reinforced by the nature in which restrictions were placed on exports to Japan in 2010, apparently voluntarily by producing firms.
A few of things stuck out to me in the show. First, the “slam-dunking” of Mr. Bastin by the host was pretty unprofessional even if it was somewhat justified; second, and perhaps related to the first point, is Mr. Bastin’s bizarre antagonism towards the United States; and third, I found it strange that the hosts asked a panel of economists and area studies experts their opinions regarding environmental degradation—were no geologists or environmental scientists available?
analytice ..chines situation ..
you are smart..but noone now spend with out be sure ..is good when global economic situation is really in trouble ..the word WAITING have very importance..if i have capital i dont use …just watch..fast move is risk ..IS EASY TO LOSE BUT DEFFICULT TO MAKE..
professor chine is ready in downroad…anyway ..is one opinion personal .i am not expert..
thank you and i am with you for everything you said ..liberal +conser=comunist
i have problem with red color ..I LIKE ..
The West will have to get its hands dirty at mining again,so be it.