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Rare-earth elements between the United States and China

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The “rare-earth elements”, also called rare-earth metals or rare-earth oxides, or lanthanides are a set of 17 white soft heavy metals.

The uses, applications and demand for rare-earth elements have expanded over the years. Globally, most rare-earth elements are used for catalysts and magnets in traditional and low-carbon technologies. Other important uses of rare-earth elements are applicable to the production of alloys, glass and high-performance electronics, such as for petroleum refining and diesel additives. The rare-earth elements in this category are used in hybrid and electric vehicle engines, generators in wind turbines, hard disks, portable electronics, mobile phones, microphones, loudspeakers, etc.

This is another area, which also pertains to clean and environmentally friendly energies, in which the United States and China are playing an important game.

At a Summit between the United States, Japan, India and Australia held not long ago, strengthening cooperation on rare-earth elements between the four countries became a key topic. The United States has always hoped to reduce its dependence on rare-earth elements and minerals from other countries. But the US government’s review of key minerals and rare-earth supply chains says that even with radical changes, it will still take at least ten years for the United States to become self-sufficient.

Indeed, over the past three years, the US Administration’s attention to rare-earth issues has increased. Rare-earth elements have become a key test for some US politicians to prove that “China threatens US security”, and have also become an important motivation for the White House to reformulate its rare-earth policy. Indeed, over-politicising the rare-earth issue and even linking it to national security will do more harm than good to both People’s Republic of China and the USA itself.

Firstly, the United States has no clear understanding of the current situation of the rare-earth mining industry. Currently, the vast majority of rare-earth products are manufactured in China, and this is because China’s low-cost mining has led to the closure of rare-earth mines in other countries. Therefore, the model of rare-earth elements as chains of the processing industries gradually developing in China is not the result of China’s monopoly, nor of rare-earth extraction in the People’s Republic of China.

Currently, China’s rare-earth reserves have fallen from over 70% of world production to about 30%, thus making China the world’s largest importer of rare-earth elements. In fact, many countries have rare-earth mines and rare-earth reserves outside China can be used by everyone for hundreds of years.

From today’s perspective, the advantage that Chinese industry derives from rare-earth elements is gradually shifting from the scale of extraction to that of their processing. Rare-earth processing is crucial for China, as most of the major patents in rare-earth production are still controlled by Western countries.

Firstly, the focus of future global competition is the ability and capacity for technological innovation. The key pathway for improving China’s industry thanks to the possession of rare-earth elements lies in technological innovation, rather than in expanding the market share of rare earth extraction and processing.

Although China has tightened up its control over the rare-earth industry in recent years, this has not been done simply through an export ban, but primarily through improved environmental protection and technological processing requirements to promote industry improvement. Although these measures have stimulated price increases in rare-earth products, they are far from threatening the US national security.

Secondly, the US actions have increased its financial burden. During President Trump’s Administration, the White House linked the supply of rare-earth elements to national security and joined Australia and other countries in calling for the exclusion of Chinese rare-earth products in the defence sector.

Nevertheless, as the human and environmental costs of rare-earth mines in Western countries are much higher than those in developing countries, it is absolutely unlikely that the minerals they extract will be competitive in the marketplace, and Western governments are paying for this.

Just for the imaginary Chinese threat, the US Department of Defence is investing huge amounts of capital, which will further increase the burden on citizens due to the country’s high fiscal deficit.

Moreover, the rare-earth processing industry hardly exists in the United States any longer. Rare-earth elements extracted

there have to be transported to China for processing. This so-called “getting rid of dependence on Chinese rare-earth elements” is actually self-deception. If the United States wants to rebuild its entire chain of rare-earth processing plants, it will not survive relying solely on the arms industry (as in the case of Afghanistan in 2001-2021), unless the US administration convinces Congress that it can use taxpayers’ money to subsidise these military installations anywhere in the world indefinitely.

Before Congress decides on any steps in any sector, entrepreneurs rarely venture to invest in building factories dedicated to rare-earth elements, as in this case. Therefore, the White House’s expectation of “ten years of self-sufficiency” is actually an overly optimistic and unrealistic assessment.

As long as China does not fully implement its ban on rare-earth exports, it will be difficult for the USA to rebuild its rare-earth industry. This was President Trump’s hope to bring manufacturing back to the USA through the imposition of tariffs and duties.

Thirdly, the weakening of mutual trust in Sino-US cooperation can easily lead to strategic misjudgements. In the current complex international economic and political situation, China and the United States are both competitors and partners. The competition between China and the United States is not a fight to the death between opponents who cannot stand each other, but requires healthy competition and cooperation on the basis of mutual trust. For a long period of time, competition between the two countries will mainly focus on the economic and technological sectors, especially the high-tech sectors, which will determine the future of both countries and also of the entire world.

Some politicians and interest groups in the United States have spread the generic “Chinese threat theory” for their own interests. The “rare-earth threat theory”, in particular, obviously bears the shadow of the US military industry group and mine owners.

When policies are subservient to interest groups, if the proliferation of conspiracy theories and threats is not contained, they will weaken mutual trust in cooperation between countries, and even increase the risk of strategic miscalculation between the two major powers. This is detrimental to global peaceful development.

China also needs to be straightforward and not immersed in the context of cheaply sold rare-earth raw materials and/or monopolistic reserves of these minerals. The aim pursued by the People’s Republic of China is the transformation from a country of rare-earth extraction into a country of rare-earth processing and production. This is occurring since large amounts of funding have been invested in rare-earth science and technology – projects that are advancing with great strides.

In short, the US policy of rare-earth independence is just wishful thinking and has no practical meaning for the USA itself.

Regardless of what others may think, as long as the People’s Republic of China continues to adhere to a pragmatic policy in the rare-earth industry, and it maintains open cooperation on development concepts – oriented toward innovation and ongoing improvement of the scientific and technological level of the rare-earth industry – it can become a strong pillar of national development, but it will also present itself as a business card that shows the level of its industrial technology, as well as its political credit at the international level.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Biden’s Department of Justice: parents as domestic terrorists

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In recent developments in the United States, US Attorney General, Merrick Garland, and the FBI have put under the FBI radar parents as potential domestic terrorists. You heard it right. This is now a new formal legal policy contained in memos of the Department of Justice trying to reign in parents discussions on Biden’s new school curricula. They are not going after potential outbursts but outright terrorism. 

This is an attack on freedom of speech in the sense that parents have the right to discuss and disagree with the new Biden school curricula. This is where the issue originated: parts of Biden’s new school curricula are not accepted by many parents and if they disagree, the FBI treats them now as potential domestic terrorists as a matter of policy. Apart from a First Amendment case, this is also a case for international human rights law and I reported the development to the UN Special Rapporteur on freedom of speech this week hoping to get a statement.

The Department of Justice is referring to some constitutional provision on “intimidation of views” to override and take down one of the most firmly established rights, the right to freedom of speech, in quite frankly a ridiculous interpretation. Those parents that dare to speak up against controversial parts in the new text books could be investigated for domestic terrorism. This is the most incompetent interpretation on limitations of freedom of speech I have seen in awhile. 

Garland and the FBI have totally lost their marbles. The woke discussion is not funny to me anymore. It increasingly looks like a woke tyranny that has nothing to do with rights and equality anymore but simply serves as a vehicle to empower the FBI to run wild against regular people. This lunacy needs to be stopped.

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Iran poll contains different messages for Biden and Raisi

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“It’s the economy, stupid.” That is the message of a just-published survey of Iranian public opinion.

However, the substance of the message differs for newly elected hardline Iranian President Ebrahim Raisi and the Biden administration as Mr. Raisi toughens his negotiating position and the United States grapples with alternative ways of curbing the Islamic republic’s nuclear programme should the parties fail to agree on terms for the revival of the 2015 international agreement.

Iranians surveyed last month by Iran Poll and the University of Maryland’s Center for International and Security Studies were telling Mr. Raisi that they are looking to him to alleviate Iran’s economic and other problems and have little hope that a revived nuclear agreement will make the difference, given lack of trust in US and European compliance with any agreement reached.

The Iranians polled seemed in majority to endorse some form of Supreme Leader Ayatollah Ali Khamenei’s notion of a “resistance economy” as a way of blunting the impact of the US sanctions imposed by former President Donald J. Trump after he walked away from the nuclear agreement in 2018. Some 65 per cent of the responders said they favoured a self-sufficient economy; 54.2 per cent expected the economy to at least improve somewhat in the next three years.

A large number expressed confidence that Mr. Raisi would significantly lower inflation and unemployment, increase Iran’s trade with other countries, control the pandemic and root out corruption.

Meanwhile, 63 per cent suggested that Iran’s economic situation would be the same, if not better, if there were no return to the agreement and the government continued to pursue a civil nuclear programme. The figure seemed at odds with the 80 per cent who said Iran’s economic situation would improve if Iran and the United States returned to the agreement and both fulfilled their obligations under the deal.

The divergence may be a function of the fact that the poll, unsurprisingly, indicated that Iranians (64.7 per cent) had little trust in the United States living up to its commitments even though they expected the Biden administration to return to the deal (57.9 per cent). As a result, 73.1 per cent of those surveyed said Iran should not make concessions given that world powers would not live up to commitments they make in return.

At the same time, 63 per cent blamed the troubled state of the economy on domestic mismanagement rather than US sanctions. Only 34.4 per cent believed that the sanctions were the main cause of their economic difficulty. Iranians pointing the finger at the government rather than external forces was also reflected in the 60.5 per cent of those polled blaming Iran’s water shortages on mismanagement and bad policies.

The poll suggested that by emphasising domestic mismanagement, Iranians were going to judge Mr. Raisi on his success or failure in countering the debilitating effect of the sanctions even though 77.5 per cent of those surveyed said that the sanctions had a negative or somewhat negative impact on the economy.

Implicitly, Iranians were holding former Iranian President Hassan Rouhani responsible for the mismanagement given that Mr. Raisi only took office in August. Rated very favourable by 61.2 per cent of Iranians surveyed in 2015, Mr. Rouhani’s favorability dropped to 4.6 per cent in the most recent poll. By contrast, the favourable views of Mr. Raisi soared from 38.3 per cent in 2014 to 77 per cent last month. IranPoll and the Center have been conducting annual of surveys since 2014.

Mr. Raisi may have taken pleasure from that but more importantly, the poll implicitly suggested that he does not have much time to produce results before his significant public support starts to wane.

Of those polled, 66.7 per cent expected Mr. Raisi to improve Iran’s international standing, 55.7 per cent said he would be in a better position to negotiate with world powers, and 45.2 per cent predicted that he would enhance Iran’s security. Those expectations may have been to some degree validated in the public’s mind by last month’s acceptance of Iran’s application for membership in the Shanghai Cooperation Organization (SCO) that groups China, Russia, India, Pakistan and several Central Asian states.

The survey results seemed to suggest that ordinary Iranians were framing their message to the United States differently from the assessment of prominent scholars and analysts. The divergence may well be one primarily of timing but nonetheless has implications for policymaking in Washington. The message of the respondents to the poll was one of immediate impact while analysts and scholars appear to be looking at the middle term.

Without referring to the poll, Vienna-based economist and strategic consultant Bijan Khajehpour argued this week, seemingly contrary to the poll, that “mismanagement and the Covid-19 pandemic have both contributed to Iran’s poor economic performance in recent years, but it remains that US sanctions…will be the key factor in determining Iran’s future prospects.”

Mr. Khajehpour went on to say that “high inflation, capital flight and the erosion of household purchasing power alongside mismanagement of resources and the deterioration of the country’s infrastructure have the potential to spark more protests and further undermine the already faltering legitimacy of the Islamic Republic in the eyes of the public.”

No doubt, the jury is out on how Iranians respond if and when Mr. Raisi fails to live up to their expectations. If the past is any indication, Iranians have repeatedly taken to the streets at often substantial risk to liberty and life to make their discontent with government performance evident as they did with the low turnout in this year’s election that brought Mr. Raisi to power.

The risk of renewed protests was reflected in the fact that responses to various questions regarding the electoral system, the limited number of presidential candidates (because many were barred from running), and the public health system showed that it was often a slim majority at best that expressed confidence in the system.

Add to that the fact that 68 per cent of respondents to the poll said that the objectives of past protests had been a demand that officials pay greater attention to people’s problems.

Yet, at the same time, they were telling the United States that its efforts to generate pressure on Iranian leaders to moderate their nuclear and regional policies by imposing harsh sanctions had for now backfired. Iranians were backing a tougher negotiating position by the Raisi government.

Ultimately that could be a double-edged sword for Mr. Raisi. He has to prove that he can be tough on the United States and simultaneously improve the lives of ordinary Iranians. Failure to do so could have in Mr. Khajehpour’s words “unpredictable consequences.”

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Gallup: World’s Approval of U.S. Govt. Restored to Obama’s Record High

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President Joseph R. Biden Jr. of the United States of America addresses the general debate of the UN General Assembly’s 76th session. UN Photo/Cia Pak

On October 19th, Gallup issued their “2021 Rating World Leaders” report and finds that “Six months into the first year of Joe Biden’s presidency, the image of U.S. leadership is largely restored in the world’s eyes. As of early August 2021, across 46 countries and territories, median approval of US leadership stood at 49%, matching the record high rating when former President Barack Obama first took office in 2009.”

Their year-by-year graph is shown of the global approval-ratings of the Governments of Germany, U.S., China, and Russia, by the populations of 44 countries, and of 2 territories (Hong Kong and Taiwan were included in their surveys because the U.S. Government wants to conquer both of those Chinese provinces, so as to weaken China). That chart clearly displays the following fact: thus far (six months into Biden’s Administration), the world viewed Biden as favorably as Obama, and far more favorably than Trump (even though Biden has been continuing almost all of Trump’s foreign policies). Apparently, the global public views Biden as being like Obama because his Party is the same as Obama’s, and his rhetoric also is similar. Though Trump’s international policies have been continued with little (if any) significant change under Biden, the world still has been viewing Biden as being like Obama (whom the world still views as having been the best world-leader during his Presidency), instead of like Trump (whom the world still views as having been the worst world-leader during his Presidency). Obama is still viewed far better than Trump, though (for example) two U.S-and-allied-banned news-sites had published, two days earlier, on the 17th, with full documentation, the major (but banned) news-report titled “First of over 200 bodies being exhumed from Lugansk mass grave. One of Obama’s atrocities.” It had been submitted to 200 news-media, and only those two published it.

Perhaps the world’s population is more swayed by rhetoric, and by Party-labels, than by a national leader’s actual policies (which, perhaps, they’ve not even known about — after all, how many know about those mass-graves?).

The Gallup surveys were done actually in 106 countries and in those two Chinese provinces that the U.S. Government wants to control, but “U.S. Leadership Approval” has, as-of yet, been calculated by Gallup only in these 46. Of the 108 total lands, 23 were in Africa, 38 in Europe (including Europe’s largest and most populous country, Russia), 30 in Asia, and 17 in “The Americas” (not including U.S., whose Government these surveys by Gallup have actually been designed to serve).

Remarkably, “While Germany and the U.S. had previously been vying for the top spot in the Americas, Germany’s leadership safely led the other countries in 2020, with a median approval rating of 50% in 2020. Russia earned higher approval ratings than China or the U.S., with a median approval rating of 41%. The U.S. and China earned similar, and far lower, approval ratings, of 34% and 32% respectively.”

Also: “Germany’s leadership continued to be the most popular in Europe, with a record-high median approval of 62% in 2020. China, Russia and the U.S. have all lost favor in Europe in recent years, and in 2020 they were all on equal footing, with approval ratings of around 20%.”

Furthermore, in Asia: “U.S. Leadership Image Still Mired at Record Lows” and these are lows that previously had been shown during the G.W. Bush and Trump Administrations; so, the U.S. Government’s rhetoric under Biden does not, at least yet, seem to be persuading Asians as much as was the case under Obama. Perhaps the Biden Administration will need to employ less-blatantly-hostile rhetoric against China than it has been using, in order to be able to get much support from Asians against China.

And, regarding Africa, “Ratings are not yet available” that are sufficient to determine whether or not, as has been shown since 2007, “the U.S. remained strongest worldwide in Africa,”or else changed up or down.

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