China has recently introduced policies to restrict the export of rare resources

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According to media outlets such as the British Financial Times, following China’s recent introduction of policies restricting the export of rare resources, Japan has begun to plan countermeasures in shock. 　　 Attempting to put pressure on China through South Korea. However, analyses suggest that China would rather temporarily seal away its rare resources than succumb to \"technical extortion\" by Japan and South Korea. 　　 In recent months, China’s National Development and Reform Commission, Ministry of Land and Resources, and Ministry of Commerce have jointly introduced measures to severely restrict the export of rare earths through a series of policies such as reducing export quotas and imposing higher export tariffs. In the newly released list of rare earth export enterprises, there are 20 companies on the list, a decrease of 19 compared to 2008. 　　 Kyodo News claims that China’s move will trigger a \"industrial tsunami\" in Japan. Because Japan is seeking breakthroughs in advanced application technologies, developing new superconducting materials and microelectronic materials. Photonics materials, information materials, and related products. Japan hopes to turn these technological advantages into economic advantages to withstand economic downturns. The production of the aforementioned materials relies on rare earths, an important resource, and almost all of the rare earths needed by Japan are imported from China. 　　 Kazuyuki Hamada, an expert at the Japan Institute of International Future Science, said that China holds 88% of the world’s total reserves of rare resources. If China reduces its exports, it is equivalent to choking Japan. 　　 Without rare earths, Japan cannot manufacture precision instruments and electronic devices. "Yōichi Sato, head of the Rare Earths department at Japan’s Mitsubishi Corporation, said that China is engaged in a complex game with Japan, and by restricting the export of rare earths it aims to force Japanese companies to move their high-tech factories and R&D centers to China. 　　 However, according to the British Financial Times, only about one-third of the rare resources that Japan imports from China are used in industrial production, while the remaining two-thirds are stored by Japan as strategic reserves. From this perspective, China’s tightening of exports of rare resources is driven by strategic considerations—preventing Japan from encroaching on China’s strategic resources. 　　 According to Japan’s Sankei Shimbun, China’s tightening of exports of rare earth elements has deprived Japan’s high-tech industry of an important source of raw materials, forcing Japan to use \"trade leverage\" to reverse this disadvantage. 　　 In fact, what Japanese experts call the “trade leverage” is nothing but a trade war launched against China. According to Singapore’s magazine Competitiveness, in mid-March this year, Japan’s Ministry of Economy, Trade and Industry asked domestic companies to reduce imports of Chinese textiles and light industrial products in order to \"support related industries in the country.\" The outside world believes that Japan’s move is related to China’s restrictions on exports of rare resources to Japan. 　　 In addition, Japan has resorted to an even more drastic measure: it has restricted the export to China of industrial products that require rare Chinese materials as raw materials. Previously, China and Japan had cooperative relationships in many product manufacturing fields: China provided rare resources, while Japan utilized its technical advantages for production, after which China imported these products from Japan at lower prices. Now, Japan claims it will tighten exports of these products to China as a retaliation for China’s “cut-off of resources.” 　　 The Sankei Shimbun listed several products whose exports to China are set to be halted: the latest pocket digital cameras from Japanese companies. Previously, the price for exporting to China was only half of the international market price; it will withdraw from the Chinese market starting in April this year. The industrial sewing machines produced by the Yoshida Industrial Group were previously exported in large quantities to China at low prices, and going forward they will be directed toward the Thai and Vietnamese markets. Home refrigerators developed and produced by Hitachi for China and Southeast Asia will no longer be sold in the Chinese market. 　　 The sport utility vehicles developed by Dafa Industrial Company for the Chinese market will be directed toward the Indonesian market. The lightweight motorcycles that Honda originally planned to sell in China will be directed to the African market instead. 　　 The Sankei Shimbun also noted that South Korea and Japan are roughly equal in terms of industrial product capabilities, and China might import substitute products from South Korea. Therefore, Japan must bring South Korea on board to restrict exports to China in order to achieve a \"sanctioning\" effect. South Korea has also expressed dissatisfaction recently with China’s tightened restrictions on the export of rare earths; therefore, Japan believes that there is \"room for cooperation\" between South Korea and Japan on this issue. 　　 In fact, Japan’s approach is nothing short of \"technical extortion.\" According to the British Financial Times, in the past China lagged behind Japan and South Korea in high-tech fields, which led to the awkward situation of having rare resources but being unable to use them. Japan’s intentions are clear: unless China allows Japan access to rare elements, it won’t be able to obtain the relevant products. Furthermore, since rare earth resources cannot be utilized, there will be an overcapacity in China’s rare earth mining industry, which could lead to a large number of companies going bankrupt. 　　 The British Financial Times analyzes that a few years ago, this tactic might have worked in Japan, as China’s industrial technology was underdeveloped at that time, and it needed to rely on resources and cooperation with Japan and South Korea to produce high-end industrial products. But it remains uncertain whether Japan and South Korea can bear the losses resulting from reduced exports to China, especially since China already possesses a certain capacity for independent research and development and production. Japan’s attempt to use its technological advantages to force China to lift restrictions on resource exports is unlikely to succeed. While China’s restrictions on the export of rare minerals have indeed put some small and medium-sized mining enterprises in a situation of overcapacity, China **has already started taking measures. Recently, 1.8 billion yuan in funding was allocated in Ganzhou City, Jiangxi Province in China – known as the \"Kingdom of Rare Elements\" – to launch a program for the acquisition of rare elements, involving the purchase of around 10,000 tons of raw rare element minerals at once. 　　 This led to the resumption of operations at 88 mines that extract rare earths. It is reported that China will also implement similar plans in other rare mineral production areas, in order to help rare mineral mining enterprises across the country restore their funding streams and resume production. The Financial Times believes that China’s **launch** of the purchase program provides reassurance to mining companies – the rare resources extracted will surely find buyers. 　　 On the other hand, China has begun to improve the reserve system for strategic resources such as rare earths. Resources that cannot be utilized at present due to technical limitations can be stored for future use once the technical conditions are ripe, allowing them to be put into industrial production then. 　　 It is reported that China has begun establishing rare earth resource storage bases in cities such as Ganzhou and Baotou, where the refined rare earths are stored in large warehouses. These resins can be put into industrial production after simple processing. The Financial Times points out that at China’s current pace of technological development, it will be able to overcome technical barriers soon and use its reserved rare resources to produce the industrial products needed. 　 This post was last edited by yutr on 2009-4-2 17:01]