This is a very brief summary of the my analysis of recent Chinese domestic activity intended to consolidate the Chinese rare earth metals production industry. I intend for the following to summarize the consolidation of the Chinese rare earth industry, which itself is a prelude, I believe to the restructuring of the entire global metals prodcution industry so as to insure for China its secuirty of supply of all metals for its domestic economy.
As I have said before, this marks the end of both western owned or operated metals production hegemony and of western metals supply hegemony.
In analyzing China's recent actions to consolidate its production of all of its domestic metallic and mineral natural resources under the aegis of its largest producers of base metals with each one of the three chosen allocated a geographic and political, not a geological, region I noticed a pattern that in of itself explains these actions as a process to ensure Chinese security of supply of its domestic demand for metals in general and of the technology metals in particular at least as far as China’s domestically produced natural resources are concerned.
The successful failure of the western business model to provide long term security of supply of technology metals for the American industrial manufacturing economy at any level seems imminent. I mean that America has been successful through the operation of market capitalism in securing supplies of critically needed technology metals for the mass manufacturing of technology-based consumer products at the lowest cost for the American domestic market. But the very movements required to accomplish this short term goal have now resulted in both the production of the technology metals and the mass production of the products critically dependent upon them moving out of the United States and into a region where the domestic consumer economy is growing so rapidly that it has become economically impossible to return to the status quo ever again.
America, in order to achieve the lowest prices for consumer goods, has simply been priced out of both the natural resources production and supply economy and the consumer products production economy of the southeast Asian market. It seems to me to be only a matter of time before the American consumer products market is subjected to pricing pressures that will end its built-in obsolescence (otherwise known as waste) model once and for all.
For Southeast Asian manufacturers to give priority to export markets in the future it will be necessary for those markets to be much larger revenue generators than they are today. Thus rising prices for imported goods in, for example, the USA will now be the norm. This includes the components for green technologies. Such components can no longer be made in the USA without imported technology metals and those imports are becoming increasingly harder to acquire as China gathers to itself the ownership and control of the majority of the world’s natural resources of not only technology metals but of all metals.
For China this means the ascendancy of its version of capitalism in one country as the foundation for its growth into the world’s pre-eminent industrial manufacturing economy by, at the latest, another generation.
China’s cornering of the supply chain for those technology metals known as the rare earths over the last 25 years has been, in my opinion, an introduction to the world metals production and demand economy of 2035.
By that year, at the very latest, global corporations, most likely Chinese owned and operated, will be focused on producing the useful forms of those metals in the specific places where they can be used most economically. China’s long term planners intend that place to be the manufacturing centers of the PRC. That is the explanation for all of their planning in the short term.
Disclosure: None
