The real or imaginary boycott on rare earth export to Japan has kept many politicians, diplomats and media busy. But according to economic analyst Arthur Kroeber the issue is not what it seems, he tells Marktplace at Public Radio. China cannot win that battle, says Kroeber:
Economist Arthur Kroeber doesn’t buy the rumor that China will further cut rare earth exports. Why? Despite their name, there are plenty of rare earth reserves outside of China, they will be developed, and China knows this.
KROEBER: “The more China attempts to use its present monopoly position as leverage in international disputes, the more certain they make it that that monopoly position will be destroyed.”
China’s monopoly on these minerals may be short-lived. One big customer, Japan, is reportedly looking to Mongolia and Canada in an effort to reduce its dependence on Chinese rare earth metals.