Seems China is shutting down rare earth exports to Europe and the U.S. as well. Could be used as a means to help bolster China's high-tech industry and kill off competition in other countries. I think this is the first step in a major trade war. I hope Japan, the U.S., and Europe show some resolve and respond by closing off all high tech gear containing rare earths from China and perhaps wider sanctions. http://www.nytimes.com/2010/10/25/business/global/25rare.html?hp
But that's the point, the US can, and it already does this. A few threads below this Geithner is telling other countries to stop devaluing their currencies... while the US devalues their own dollar.
The U.S. has had to ease monetary policy because of the economic conditions here and because of what China and other nations are doing to try to devalue their own currency. Since China is overvaluing the dollar, the U.S. is forced to devalue it's own currency. That's the extent of the whole problem. China by manipulating it's own currency is creating this problem. So the U.S. has to print dollars in response to prevent deflation and further economic hardship.
If China were to shut down rare earth shipments to Europe, you can expect the Dutch to preserve its windmill industry by force. It wouldn't be the first time the Dutch went with force to preserve its economic prosperity.
You might want to put a "winkie" after a post like that. Some folks are going to think you were serious.
Folks, let's get some basic stuff straight first. Monetary policy and foreign exchange policy is two sides of the same coin. "Manipulating" money supply is the same as "manipulating currency". I've never understood all these populist arguments about who is manipulating what.
China is attempting to blackmail the United States and other highly developed nations into handed them high technology that they did not develop themselves. If the US and the other countries being blackmailed acquiesce to this coercion for the short term gain of getting rare earth now, rare earth that is likely being parked in warehouses, they will be handing China a huge advantage, an advantage they hold now, and that they spent billions of dollars and years of research creating. China would then simply build the products themselves, forcing even more businesses to build factories in China, or find something else to do, like go out of business. That would be an absolutely insane thing to do. The only action that makes sense to me is to declare an emergency, get government help and funding from the countries that are the victims of this Chinese blackmail, and bite the bullet while alternative sources of rare earth are brought (again) online. Better that then to submit to blackmail and toss to China what tooks years of research and billions to create. In short, tell them to get ****ed.
Exactly! The Fed artificially intervenes in "monetary policy" all the time, but when other countries do it, it is "manipulating currency". While it's no secret that China wants more high tech industries, I think the biggest motivation behind reduced exports is to get more bang for buck (whether it be higher prices or tech transfer) from what is a finite resource. Given the environmental/health costs, rare earth is probably under priced atm. Either way, it would be good for the rest of the world if other countries increase their rare earth production (yay for cheaper rare earth and products!), so I do hope it happens.
In my opinion, that's a convenient excuse for China's actions, not the reality. It is blackmail. There are other ways they could get increased prices.
To be quite honest, it's not that China lacks technology. European countries have no animosity towards China and sell them plenty of high-tech machinery. The only reason why China wants US to sell them these same stuff is because they have gazillion USDs and want a place to use them. But if all the US can export to China is stuff China don't want, then obviously there's no discussion on the matter. To put it in NBA terms, it's like the Lakers willing to part with Fisher or Odom, while the Rockets would only want Gasol or Kobe from them. But that doesn't preclude the Rockets from trying to trade for Melo or CP3 from another team. China-US trade relations doesn't operate in a vaccum.
What the US should do from a national security point of view is obvious wrt to rare earth metals is obvious. However we have the corporate elite, who are easily manipulated by the Chinese elite who they wish to please. The corporate elite have virtually no loyalty to the USA and wish to keep having access to the near Chinese near-slave labor, unrepresented by unions, to keep making stuff to send back to the US consumers so they can make super profits. The elites of both countries love the present system. Not so good for the average Chinese or American. Meh and MFW are elitists and therefore complete defenders of the system.
It is reality. If mining companies in the US were exporting rare earth at cheap prices to manufacturers overseas, but at great environmental cost, and rare earth reserves were depleting, wouldn't you want the US govt to slow down exports too? When I read comments from US posters here, I sometimes get the feeling that you guys don't realize that the rest of the world wants exactly the same things that you guys want. More jobs, higher wages, less environmental/health dmg, cheaper consumption goods, trade surplus not trade deficit, etc. I don't know if you've read some of the environmental problems China is having (search"cancer villages"). At some point, the cost to society (pollution, health problems, etc) outweigh the benefits of the jobs created. Or in the words of Daxi Li, "they don't want to do the crappy job." <table style='font:11px arial; color:#333; background-color:#f5f5f5' cellpadding='0' cellspacing='0' width='360' height='353'><tbody><tr style='background-color:#e5e5e5' valign='middle'><td style='padding:2px 1px 0px 5px;'><a target='_blank' style='color:#333; text-decoration:none; font-weight:bold;' href='http://www.thedailyshow.com'>The Daily Show With Jon Stewart</a></td><td style='padding:2px 5px 0px 5px; text-align:right; font-weight:bold;'>Mon - Thurs 11p / 10c</td></tr><tr style='height:14px;' valign='middle'><td style='padding:2px 1px 0px 5px;' colspan='2'><a target='_blank' style='color:#333; text-decoration:none; font-weight:bold;' href='http://www.thedailyshow.com/watch/thu-april-22-2010/wham-o-moves-to-america'>Wham-O Moves to America</a></td></tr><tr style='height:14px; background-color:#353535' valign='middle'><td colspan='2' style='padding:2px 5px 0px 5px; width:360px; overflow:hidden; text-align:right'><a target='_blank' style='color:#96deff; text-decoration:none; font-weight:bold;' href='http://www.thedailyshow.com/'>www.thedailyshow.com</a></td></tr><tr valign='middle'><td style='padding:0px;' colspan='2'><embed style='display:block' src='http://media.mtvnservices.com/mgid:cms:item:comedycentral.com:281722' width='360' height='301' type='application/x-shockwave-flash' wmode='window' allowFullscreen='true' flashvars='autoPlay=false' allowscriptaccess='always' allownetworking='all' bgcolor='#000000'></embed></td></tr><tr style='height:18px;' valign='middle'><td style='padding:0px;' colspan='2'><table style='margin:0px; text-align:center' cellpadding='0' cellspacing='0' width='100%' height='100%'><tr valign='middle'><td style='padding:3px; width:33%;'><a target='_blank' style='font:10px arial; color:#333; text-decoration:none;' href='http://www.thedailyshow.com/full-episodes/'>Daily Show Full Episodes</a></td><td style='padding:3px; width:33%;'><a target='_blank' style='font:10px arial; color:#333; text-decoration:none;' href='http://www.indecisionforever.com/'>Political Humor</a></td><td style='padding:3px; width:33%;'><a target='_blank' style='font:10px arial; color:#333; text-decoration:none;' href='http://www.thedailyshow.com/videos/tag/Rally%20to%20Restore%20Sanity'>Rally to Restore Sanity</a></td></tr></table></td></tr></tbody></table>
Not sure whether Krugman is average American or elitist, by your definition. Obviously he loves the present system - Chinese keep producing rare earth metals, at the cost of poor working condition for AVERAGE or BELOW AVERAGE Chinese workers, damaging environment, exhausting natural resource, and selling them at an extremely cheap price. He sees China as a dangerous country if they want to change the "present system" around rate earth metals production.
When America does it, it's "teach them a lesson", or "make a stand", or "show them who's the daddy" etc etc. When China does it, it's blackmail, it's ignoring "rules" etc etc. When Chinese company wanted to buy a share from American companies in natural resource or telecommunication, it's an outcry for Congress that National Security is at risk. So it's blocked. If American companies want to buy a stake from some Chinese company, and gets blocked, it's Chinese violating free trade rules or protectionism. When some stupid Chinese company wanted to buy garbage from Morgan Stanley or Blackstone, as long as those shares don't have voting power, it's free trade and capitalism again. When America keeps printing money and spending more than they have, and as a result, to devalue the Dollar. It's market economy. If other countries devalue their currency, it's currency manipulation. It also reminds of a celebrated article after a S.K ship was sunk. Everyone was so sure that N.K did it. Instead of bombing the N.K, US and S.K went on a military exercise, according to the general "to Teach CHINA a lesson". Some people just love the self-created world filled with words at own will. The list goes on and on. But semantics never holds any weight, except for maybe it makes the person plays with it feel a little bit better. What matters is action and the result of action, not the self-claimed noble motives, nor second-guessed intentions you labeled on others.
I am tired of China playing the victim here. This ain't the opium wars. We aren't shoving anything down China's throat. If China won't open her markets to fair competition, why should we open ours to hers? China puts tariffs and restrictions on imports and exports, so fine, we should do the same. I say, ban all high-tech goods containing rare-earths from China. That'll even the score.
