tag:blogger.com,1999:blog-5235419263414453422.post7977225046570560029..comments2024-02-23T01:30:06.101-08:00Comments on Early Warning: Rare Earths AgainStuart Stanifordhttp://www.blogger.com/profile/07182839827506265860noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-5235419263414453422.post-83433525354360092562010-10-20T08:11:23.241-07:002010-10-20T08:11:23.241-07:00This is an interesting story primarily because it ...This is an interesting story primarily because it is China and they operate under a different set of rules.<br /><br />China (and to some degree the FSU) have the benefit (in this instance) of strong central government that can move quickly to adjust to changing circumstances. China has the added "benefit" of cheap labor and the need to keep it employed.<br /><br />For China, maintaining the rare earth monopoly is a jobs program, albeit one with nice economic and geopolitical benefits. Why wouldn't they throw money and labor at production of RE and flood the market, making it uneconomical for market-based producers to emerge?<br /><br />The FSU could conceivably compete, but its labor costs are higher. Free market sources like the US and Australia are going to have real trouble without serious government subsidies.<br /><br />What is the US really going to do if the Chinese flood the market with cheap RE? Almost any response ends up hurting Americans more than the Chinese. How does this end with the US having an economically viable industry?Anonymousnoreply@blogger.com