China takes a “rare” swipe at the US

China takes a “rare” swipe at the US

China now controls more than 80 percent of the world's supply of something that surrounds you all day, every day. And, according to the Financial Times [paywall], Beijing is threatening to cut the supply of that thing to the US. What are we talking about? Rare earths metals.


What are rare earth metals and why should you care about them? Rare earth metals are critical for manufacturing just about every electronic device that you, and all of the world's modern militaries, use every day. They're essential for making screens, hard drives, and precision glass.

Without rare earths, you can't use a cell phone, save a document, watch a Netflix series, drive a new car, take a digital photograph, fly a drone, target a missile, or build a fighter jet. You wouldn't even be able to read Signal — though we promise to make hard copies available if it comes to that.

It just so happens that China has a near-monopoly on the business of refining these metals for use in manufacturing. Since the 1990s, when environmental regulations in the US made it cheaper to refine rare earths in China, Beijing's share of the industry has risen from about 30 percent to more than 80 percent today. With that kind of market power, China can throw its weight around, and the US-China rivalry over technology creates a powerful incentive to do just that.

What is China threatening? According to the Financial Times scoop, China is conducting a fresh study to determine whether cutting off rare earths exports to the US would cripple the US defense industry, which relies on the stuff to make all of its key weapons systems. A single F-35 fighter jet, for example, contains close to 1,000 pounds of rare earths metals, according to a US congressional report.

The Pentagon knows all this, right? Of course. For years, Pentagon planners have been looking for ways to secure more access to rare earths mines, in particular by making inroads in southern African countries that are rich in reserves. And the Trump administration last year issued an emergency order to boost rare earths production in the US.

But the challenge isn't so much in finding rare earths — which are, despite their name, present all over the world, including in the US. It's extracting them and then refining them that costs and pollutes a lot. Private investors haven't been able to make it profitable under US rules, so US agencies and lawmakers have explored subsidizing production or making regulatory changes that make more rare earths available for refining.

But for a Biden administration that has put environmental protection at the center of its agenda, this could mean a tough tradeoff: protect the defense industry and Silicon Valley, or protect the environment.

Would China really do this? Cutting off rare earth supplies to the US would be a huge blow to the US defense industry, and could also complicate things for Silicon Valley, which relies on Chinese rare earths as well — though less so because so much of their manufacturing is actually in China at the moment.

Washington would almost certainly respond with severe sanctions or export limitations of its own. The US has already moved to limit China's ability to buy semiconductors, an area where China is almost entirely dependent on the outside world, in particular on Taiwan.

But there's another consideration for China — don't rock your own boat. By threatening to cut rare earths supply, the Chinese government adds to other countries' sense of urgency about developing their own mining and refining. While that obviously won't happen overnight, the threat of losing access to 80-90 percent of the world's rare earths supply would accelerate things significantly.

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The European Union is, for better or worse, the most ambitious experiment in human history in institutionalized multinational cooperation. Its success depends on the willingness of its members to abide by its rules.

In recent years, the populist-nationalist governments of former Communist bloc members Hungary and Poland have flouted some of those rules in order to boost their own popularity with citizens suspicious of the EU's liberal values on issues like immigration and minority rights. In response, the EU has scolded these "illiberal" governments and threatened forceful action – so far without much effect.

The fight between EU institutions and Poland and Hungary has escalated.

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Some of the worst sectarian clashes since Lebanon's 15-year civil war (1975-1990) broke out in Beirut this week between supporters of Hezbollah and Amal, both Shiite political parties, and Christian, far-right Lebanese Forces. Shiite protesters were rallying against the state probe into the Beirut port blast, which occurred last year. They say authorities were singling out Shiite politicians for questioning and blame. Below is our original piece on the Beirut port explosions published on August 5, 2020.


The twin explosions at Beirut's port on Tuesday were so powerful that the aftershocks reverberated as far as the Eastern Mediterranean island of Cyprus, 150 miles away. The specter of fire and smoke was such that many suggested on social media that Beirut had experienced a nuclear blast.

In the days ahead, more details will come to light about why a deadly cache of materials was haphazardly stashed at a port warehouse, and why Lebanon's government failed to secure the site. So, what comes next for crisis-ridden Lebanon?

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Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:

What does it actually mean to cut $1 trillion from the Democrats' $3.5 trillion social spending bill?

President Biden has proposed one of the most ambitious expansions of federal spending in recent memory. If he gets everything he wants, it would probably be the largest expansion of government since the Great Society, but he's not going to get everything he wants. Democrats have basically said they cannot do all $3.5 trillion in spending. They're probably going to end up around $2 trillion. So what gets cut? Well, we don't know yet. There's kind of two ways to go about this. They could either cut the number of programs that have been proposed, doing fewer things with more money on a permanent basis, or they could try to do more things, each program getting less money and potentially doing them on a temporary basis. So, a future Congress would have to extend it. What does this mean for you? Well, a lot of the money in here is designed to go directly to families, either in the form of cash payments, through the tax code, the Child Tax Credit and the Earned Income Tax Credit, or subsidies for things like child care, early childhood education, and community college. And if you cut these things back, it means less money is going to go out the door to the American people. It also means less tax increases to finance it. So the implications of what's being proposed could actually end up being a big deal for a lot of Americans who would qualify for benefits under these new programs.

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How will artificial intelligence change the world and especially the job market by 2041? AI scientist Kai-fu Lee just wrote a book about precisely that, and he predicts it'll shake up almost every major industry. AI, he explains, will be most disruptive to many so-called "routine" occupations, but the damage may be reduced by shifting "empathetic" workers to jobs that require human empathy. Watch his interview on GZERO World with Ian Bremmer.

Watch this episode of GZERO World with Ian Bremmer: Is a robot coming for your job? Kai-fu Lee explains AI

The Atlantic CEO Nick Thompson believes in tech firms doing business in China because connecting with people there is a huge social good for the world. But in demanding LinkedIn de-platform certain people, he says, the Chinese government crossed a line, and "you can't justify that."

Watch Ian Bremmer's interview with Nicholas Thompson in an upcoming episode of GZERO World, airing on US public television.

Sectarian clashes in Lebanon: As Lebanese supporters of Hezbollah and Amal, both Shiite political parties, were on their way to a protest in Beirut Thursday, gunfire broke out, evidently between Hezbollah militants and those of the Christian, far-right Lebanese Forces. The protesters were rallying against the ongoing state probe into last year's devastating twin blasts at a Beirut port, saying that state authorities were singling out Shiite politicians for questioning and blame. They have called for the dismissal of Judge Tarek Bitar — who is leading the probe and on Monday issued an arrest warrant for a prominent Shiite parliamentarian linked to Amal. Each side has blamed the other for starting the violence Thursday, which killed at least six people, injured dozens more, and threw the entire city into a panic. In a grim omen, the clashes, which are among the worst in recent years, erupted along one of the old front lines (dividing Muslim and Christian neighborhoods) of the 15-year sectarian civil war that devastated the country up until 1990. With the country mired in economic and political crises, the people of Lebanon can't seem to catch a break: just last week the country was plunged into complete darkness when its decrepit power grid ran out of fuel. Meanwhile, Najib Mikati, who became prime minister designate in July after months of political deadlock, declared a "day of mourning," but civil strife continues.

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35.4: The US has overtaken China as the country with the largest share of the world's Bitcoin mining networks, now accounting for 35.4 of the global mining presence. This comes after the Chinese government banned domestic cryptocurrency mining operations to promote its own digital yuan that would track every single transaction.

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