What if rare earths enter the trade war - Arthur Kroeber

Arthur Kroeber

China has been checking its weaponry for the ongoing trade war and stopping the export of rare earths has been one of them. But China will have to be very selective in using this weapon, otherwise it might hurt itself more than the US, says economist Arthur Kroeber, according to CBS.

CBS:

If China does clamp down, they are likely to be selective in which elements to target because the country wants to be seen as playing by World Trade Organization rules, said Arthur Kroeber, head of research at Gavekal Economics and editor-in-chief of China Economic Quarterly, on a call with clients this week. China's goal is to paint the U.S. as a "lawless actor" that disrupts economic growth, he said. 

"I really think that they have a problem [in] that none of the options are very good and all of them involve very significant costs to China," Kroeber said. "So if they're going to do any of them they have to do them extremely carefully, and I think quite selectively."

More at CBS.

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Rare earth is not that rare - Arthur Kroeber

Arthur Kroeber by Fantake via Flickr

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.

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Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.

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