Is China turning nasty?

Trollbait, I don't see how that works when the price-controlling country has no control over the level of external demand.

 

In a free-market Adam Smith neo classical economy, the consumer/buyer ( unless otherwise restricted) will buy at a commodity item ( like rice) at its lowest price, so a supplier needs only to sell at a price just slightly lower than the competition to secure a sale. If the lowest price commodity supplier has enough to meet over 80% of the market demand at any given time then that supplier can effectively grab/control 80% of the market value leaving the more expensive competitors with less than 20% of the market demand. For example, if that commodity market has a value of $100 dollars per month, then lowest price supplier gets $80 dollars per month and the higher price supplier get about $20 dollar per month maybe plus or minus a dollar or two. To take this concept into the real world, replace the word "Supplier" to "Chinese Rare Earth Raw Ore Suppliers/Exporters" and the word "consumer/buyer" with "Global importer and processors of Rare Earth Raw Ore." The cap on Chinese RE raw ore should raise the overall price of RE raw ore and make non-Chinese RE mining operations viable (e.g. Peru might re open its old Lithium mines). However, because China's RE are so big there would still be a risk that if China eliminates the caps then those non-Chinese RE mining operations will be priced out of the market again. All this reminds me of an old (Scottish?) saying.. "fool me once shame on you - fool me twice shame on me" I heard on Star Trek...

Chinese Rare Earth mining operations are for the most part surface strip mining operations ( you don't dig unsafe tunnels to get to them - instead the mining operations just remove to first 5 or 20 feet of ground and sift through the dirt and rubble for the ore deposits) - Strangely enough - my readings indicate that the underwater volcanic deposits of RE must be sequestered/extracted in much the same way as their above ground operations except it is underwater at some kind of lung crushing depth. IIRC RE raw ores like lithium is priced like coal in its raw form (yeah RE raw ore is cheap stuff) but doesn't have the safety problems of subterrean excavation that coal mining does. My guess is that if its not done right underwater RE mining operation could or will cause pollution and damage the regional eco system - hence there is some risk of harming regional fishing harvest in the area and wrecking the regional economies. The big money made is not in the extraction of ores/oil/gas but in speculation of future contracts to these commodities. This dispute isnot about easy money found on wall street futures markets but on market dominance and control. IMHO the entire Asian Pacific and Indian Ocean Region should be looking at the safety and environmental impact of these off shore and deep sea Mineral Sequestration/Mining operations very carefully - especially those that are operating where the ground that is underneath you is really not all that stable.