Thursday, September 30, 2010

China ends ban on rare earth exports to Japan but damage is already done

In line with many of its other recent foreign policy foibles that have served only to irritate its neighbors and drive them into a closer embrace with the US, China's rare earth export ban directed at Japan was just plain dumb.  It served to heighten everyone's concerns about relying on China so now everyone will look for alternative rare earth suppliers.  On top of that, it heightens the alarm already felt about China's perceived increasing willingness to use its economic leverage to squeeze its trading partners.  And it puts the spotlight on how opaque China's descionmaking process is as there were rumors but no official confirmation of the ban for days.  Lifting the ban (link on lifting here) does not undue this damage.