Remember chemistry’s lectures? It’s ok if you were sleeping in the class. Because China was not. China has remained the world’s cheapest manufacturing factory for decades. And no wonder it has developed a strong vertical integration. China is ensuring an uninterrupted supply of energy and raw material.
Neither China’s tussle with Russia in the Central Asian Region for energy security is hidden and nor its constant battle in the South China Sea. The red dragon’s efforts to escalate its economic growth are facing several challenges. Still, the country has maintained a humble pace.
Amid to Sino-US trade wrestling, China has signaled a triumph card and America recognizes the card really well. And that card is “Rare earth minerals.” Here it is important to mention that these minerals are not rare at all. And China has 35% of the total world’s reserves. And it processes 80% of them by importing them from across the globe. The only problem with minerals is safe and environment-friendly mining. And compromising almost both the conditions, for now, China has expertise in this area.
Why are Rare Earth Minerals (REM) so important?
Well, the majority of the manufacturing is dependent on these basic 17 elements. Since REMs are good conductors, they are the perfect material for high-tech devices. REMs are crucial for the proper functioning of some industries such as automotive, Defense (a reason why America is so worried), and clean energy, etc. Defense instruments such as Lasers, Radars, Sonar, Missiles, engines, and even night vision systems are made up of microchips installed with rare earth minerals.
China’s stronghold on the supply of such important material gives the country exception upon its rivals. And in response to the USA’s constant itch, China has hinted to shorten the supply for the USA. This is not the first time China has used this card before with Japan. When both the countries were having serious friction in the South China Sea over the Sankaku Islands, China shut Japans supply.
Knowing USA’s hunger for electronics, China has pulled out the triumph card. And now, we are waiting for USA’s response. USA imports REMs worth of $180 million annually and 80% of these imports come from China.