394) US worried by Chinese dominance over minerals - CNN

China mineral dominance concerns U.S.
By Laurie Ure
CNN, April 16, 2010

STORY HIGHLIGHTS
* China has secured 97 percent of the production of rare earth minerals, GAO says
* GAO report describes China as a a "rapidly rising military and economic power"
* United States has a rare earth mineral mine in southern California
* GAO estimates rebuilding the U.S. rare earth industry could take up to 15 years

Washington (CNN) -- China's dominant position in the production of rare earth minerals has long-reaching implications for the U.S. Department of Defense, according to a recent government report.

The report from the Government Accountability Office was commissioned by Congress amid growing concerns that China's potential reduction on the supply of much-needed rare earth minerals could impact critical military uses.

China has secured 97 percent of the production of these minerals, which are used in nearly every electronic device, cell phones, computer hard drives and guided missiles.

"The longer we neglect this, the longer we don't take steps to counter this, the more it becomes a pressing problem," said Dean Chang, Research fellow at the Heritage Foundation's Center for Asian Studies.

The minerals include ores, oxides, metals, alloys and semi-finished rare earth products and cannot be reproduced artificially. "It's not like the DOD can just say, 'OK, we won't use them,'" said Chang.

There is widespread use of rare earth materials in defense systems, including precision-guided munitions, lasers, communication systems, radar systems, avionics, night vision equipment, satellites and more, according to the GAO.

China has decreased output and increased export taxes on all its rare earth materials to a range of 15 to 25 percent, according to the report.
It's not like the DOD can just say, 'OK, we won't use them'
--Dean Chang, research fellow, Heritage Foundation's Center for Asian Studies

The defense industry's heavy reliance on these minerals has prompted Congress and Pentagon and to examine ways to mitigate should China continue to reduce its exports.

House Armed Services Committee Chairman Ike Skelton, a Missouri Democrat, said he's planning a hearing to discuss the GAO report.

Defense Department spokesman Dave Lapan said the Pentagon has been monitoring this issue for years, and is "looking at options to increase domestic availability of rare earth elements though developing new domestic sources, re-energizing previous domestic sources and transforming the national stockpile to include rare earth materials."

The United States has a rare earth mineral mine in southern California, which is the largest non-Chinese mine in the world, but the GAO says the mine currently lacks the facilities to process the rare earth ore into finished components such as permanent magnets.

Andrew Lubin spent 30 years importing and exporting Chinese metals and taught economics and export-import operations at the online American Military University. He said Chinese in-country demand has increased greatly in the last ten years.

"They have a huge middle class that didn't exist 20 years ago," said Lubin. "It's not that they're trying to screw us. They need it for themselves."

But Chang said, "The big step back for this is that the Chinese are taking a very broad-minded view of their national security and national influence. It's not just the number of their submarines or missiles, or even broad economic power. In this case China is using all of these things as tools to influence everybody, including us."

But Chang said the GAO report is not all doom and gloom.

"The GAO is not saying all is lost," he said. "You could re-establish a domestic industry, from mining through processing, but that's expensive and also that takes time."

Rebuilding the U.S. rare earth industry could take up to 15 years, according to GAO estimates.

RELATED TOPICS
* China
* Science and Technology
* Earth Science

380) China and USA: Friends or Foes - David Shambaug

The US and China are parties to the world’s most important bilateral relationship, and this two-part series analyzes the challenges and opportunities confronting two world powers. In the first article, China scholar David Shambaugh presents a litany of issues that bedevil their relations. From President Bush’s perspective, three points of contention most likely to take center stage: First is China’s reluctance, viewed as a roadblock to UN Security Council action, to condemn Iran’s uranium-enrichment program and ambitions for nuclear-weapons capability. The second is China’s “hands-off” approach to North Korea’s nuclear program. Third is China’s push to lock-up global energy supplies, which according to the Bush administration, hikes up prices and intensifies the scramble for resources. On the other hand, China questions motives for amassing US troops in Asia, Bush’s nuclear deal with India, and the US not urging Japan to admit atrocities from World War II. And then there is a long list of economic issues. At past Sino-US summits, leaders often engaged in abstract ruminations on the value of the relationship. But there’s a new sense of urgency, which according to Shambaugh, could lead to “a real working summit” and real progress for world stability. – YaleGlobal

The US and China: Friends or Foes? – Part I
David Shambaugh
YaleGlobal, 18 April 2006

Confronting a long list of major issues, the presidents might go beyond cant at Washington summit

WASHINGTON: Chinese President Hu Jintao’s meeting with President George W. Bush at the White House on April 20 will be an opportunity for the two leaders to grapple with the complexities of the world’s most important bilateral relationship. While no major agreement may emerge for the two leaders, the opportunity to listen directly to each other’s perspectives and coordinate their respective positions on a range of sensitive global and bilateral issues could be an investment in strategic stability and each nation’s interests.

The Sino-American summit comes at a propitious moment because the agenda of issues of concern to the two governments has grown much more complicated in recent months. Strategic suspicions of the other’s actions and motives grow in each capital. For Washington, in particular, frustrations have recently risen over three issues:

First, the US is frustrated by Beijing’s and Russia’s foot-dragging in the UN Security Council to condemn Iran’s enrichment of uranium and suspected nuclear weapons development program. Condemnation by the five permanent members of the Security Council is the first step towards likely sanctions and other punitive measures – moves resisted by Beijing.

Second, Beijing’s refusal to pressure Pyongyang to abandon its declared nuclear weapons program has also frustrated Washington.

Third, the Bush administration perceives an attempt by China to “lock up” global energy supplies as contributing to escalating prices and competition for worldwide resources. The administration is particularly troubled when China signs contracts with countries that Washington views as “rogue” or troublesome states—such as Iran, Myanmar, Nigeria, Sudan, Venezuela and Zimbabwe. In return, China has sold arms to these states and generally shields them from international condemnation

Such moves have not only concerned Washington, but run counter to the administration’s desire, as articulated by Deputy Secretary of State Robert Zoellick, for China to become a “responsible stakeholder” in world affairs and global governance. Zoellick argues that China is a full member of the international community, but tends to “free ride,” shying away from its appropriate responsibilities as a major power.

In addition to these nettlesome issues on the US-China agenda, the two leaders must tackle other issues as well.

China questions US strategic intentions and military deployments in Asia – viewed by a number of Chinese analysts as an attempt to strategically encircle China. The characterizations of China as a potential adversary in the Defense Department’s recently released “Quadrennial Defense Review” and other Pentagon reports fuel this perception in Beijing. President Hu Jintao will likely seek clarification of American intentions on this issue.

China, like other countries, is also concerned about the recent US-India nuclear agreement. While China has accepted India as a declared nuclear weapons state and welcomes its entry into the non-proliferation community of nations, Beijing joins other countries expressing concern about the double-standard precedent set by the US-India agreement. More broadly and not surprisingly, Beijing is wary of US attempts to enlist India in a strategic encirclement of China.

China would also like Washington to do more to encourage Japan to confront the “history issue.” Sino-Japanese relations have atrophied badly over this and other issues, and the rift does not serve US interests or East Asian stability. Awaiting Prime Minister Koizumi’s successor in September, Beijing would appreciate greater American pressure on Koizumi and his successors to cease their visits to the Yasukuni Shrine and engage in a range of initiatives to deal with other elements of the history issue, such as removing the remains of Class A war criminals from Yasukuni, establishing Truth and Reconciliation Commissions, and revising textbooks.

China and other Asian states view the US, with its official silence on these issues, as complicit in Japanese obstinacy. China is also concerned by the tightening of the US-Japan alliance and US encouragement of a greater regional and global security role for Japan.

President Hu will also raise the Taiwan issue. While the two sides have cooperated well since Premier Wen Jiabao’s visit to the White House in December 2003 to keep the lid on the potential for Taiwan independence, the Chen Shui-bian government on Taiwan continues an incremental push of its independence agenda. The latest provocative step was the March 2006 announcement that the National Reunification Council and its guidelines had “ceased to function.”

President Bush will likely reiterate the US commitment to maintaining the “status quo” across the Taiwan Strait, with no unilateral actions on either side to disrupt stability. The president will also likely reiterate the standard mantra of US commitment to the three joint communiqués, as well as the Taiwan Relations Act, the One China Policy, and its desire for the governments in China and on Taiwan to enter into direct dialogue with each other.

While the Taiwan issue has always been the most sensitive issue in the relationship, Beijing and Washington have managed it well in recent years. But regular high-level communication is a necessary condition to successful management, and this meeting offers another chance for both sides to coordinate strategy.

For his part, President Bush is also likely to raise three other issues of great concern in Washington: the trade deficit, intellectual property rights and human rights. The trade deficit reached $203 billion in 2005, as core industries across the country have hollowed out and gone under in the face of outsourcing of production to China. Accordingly, the trade deficit and job loss issue combined have gained great traction in a Congressional election year. Congressional calls for a full floatation of the Chinese currency, and legislative threats to invoke across-the-board 27 percent tariffs on Chinese goods have added fuel to the fire.

The Chinese have tried, in advance of the Hu visit, to reduce the pressure by sending a large commercial delegation on an US buying spree, estimated at $16.2 billion – signing contracts for a range of goods, including 80 Boeing aircraft. In fact, China is now America’s fastest growing export market, but this is little noticed as long as the trade deficit with that nation remains America’s greatest.

Continuing Chinese infringement on intellectual property rights (IPR) is a closely related issue. On the eve of President Hu’s visit, the Joint Committee on Commerce and Trade, a bilateral US-China body, reached agreement on a range of new Chinese actions aimed at stemming and stamping out copyright piracy. The new agreement, like previous agreements, is promising, but it remains to be seen if the Chinese government will actually enforce it.

Human rights in China remain contentious. The last two US State Department annual reports on human rights in China have asserted retrogression, while China now issues its own assessment of US human rights infringements.

Given all that is on their plate, President Bush and President Hu will be lucky to touch briefly on all of these topics. In some past Sino-American summits, the two leaders have been content to engage in a more philosophical exchange about the value of their relationship. They may do so again this time, and that too would be useful, but given the pressing importance of the issues at hand, it is likely to be a real working summit.

That the two presidents can have such a businesslike meeting is a testimony to the maturation of the relationship. President Bush likes to characterize Sino-American relations as “candid, constructive, cooperative, and complex” – this summit is likely to validate his description.

David Shambaugh is professor and director of the China Policy Program at George Washington University, and nonresident senior fellow in the Foreign Policy Studies Program at the Brookings Institution.

374) China and its national interests - Orville Schnell (Yale)

Seeking reciprocity: Chinese President Hu Jintao with President Barack Obama

China has shown increasing intransigence towards the world in the defense of what it considers its core interest. This two-part series analyzes how China’s hard line policy may not have helped its best interest. Recent developments in the US-China relationship – both in politics, with the rocky start between presidents Barack Obama and Hu Jintao, and in business with Google’s partial retreat from the Chinese market are examples of this tough approach. In the first article, China historian Orville Schell notes that the Obama administration has taken heat from critics on the right and left for extending a series of friendly gestures to the nation with little to show in the way of tangible policy initiatives. If anything, some US observers noted that China became more aggressive with its demands. Some patience may be in order, as the US and China adjust to roles as collaborators rather than mere competitors and China rediscovers valuable lessons from its tradition. Schell explains that the notion of reciprocity, or “shu,” is a fundamental tenet of Confucian teachings. Rather than mark weakness, Schell contends that concessions and good intentions can serve as a catalyst to encourage reciprocity and move negotiations and relationships toward a higher level in resolving global problems, thus strengthening both nations. –
Yale Global

China: Defending its Core Interest in the World – Part I
Principle of reciprocity enshrined in China’s Confucian tradition could make it a winner
Orville Schell
Yale Global online, 5 April 2010

BEIJING: After speculation to the contrary, President Hu Jintao confirmed that he’s coming to Washington for upcoming nuclear proliferation talks. Not long after, Washington announced a delay in announcing any decision on whether China has been judged a “currency manipulator,” a dictum Congress requires that the US make on each country by April 15th.

What’s more, Hu’s recent hour-long phone conversation with President Barack Obama on April 1 leading to these announcements could signal a much-needed thaw in US-China relations. It’s about time. Here in Beijing, in the wake of the Dalai Lama’s recent visit to the White House, the Taiwan arms sales and Google’s retreat to Hong Kong, one can’t help escape a growing chill towards America. And in Washington, fair or not, many have come to view US conciliatory gestures over the past year as having failed to elicit equal response from Beijing.

The Obama administration has
bent over backwards to signal its desire for friendlier relations with China.

Indeed, since coming to office, the Obama administration has bent over backwards to signal its desire for friendlier relations with China. Secretary of State Hillary Clinton and Obama both displayed an unusual solicitude towards their hosts on their respective trips to China. Among other concessions, Clinton promised that human rights issues could not stand in the way of the two countries tackling global problems like the economic crisis or climate change, and Obama even postponed his October meeting with the Dalai Lama in hopes of smoothing the way to a successful November summit. In Washington’s view, Beijing responded in a most unreciprocal fashion in Copenhagen and then harped on issues like Tibet, Taiwan and currency exchange, chilling promise for more collaboration.

Then came the Google furor, which deeply unsettled Chinese officialdom. After all, here was the most dynamic, iconic company in the world suddenly walking away from part of its business in the most rapidly growing market in the world. Chinese blogs and chat rooms have been ablaze with defensive rebuttals to the company’s departure and its implicit critique of Communist Party’s ground rules for foreign IT companies operating in the China market. Many insist that internet “filtering” – it’s rarely referred to as “censorship” here – is simply part of China’s quotidian rules and regulations for doing business.

Given China’s new militancy, even truculence, many in Washington began to wonder if the Chinese really do want friendlier relations? And if they do, don’t they understand the concept of reciprocity?

Many in Washington wonder if the Chinese really want friendlier relations. If so, don’t they understand the concept of reciprocity?

The truth is that Beijing does want better relations, but often this aspiration gets lost in clumsy political bluster. Curiously, the notion of reciprocity is not alien to China. In fact, the idea is deeply rooted in its own Confucian tradition.

The Analects, or "Lunyu", the classic of Confucian political philosophy that sinologist Simon Leys described as being “to Confucius what the Gospels are to Jesus,” provides a virtual roadmap for creating and maintaining mutually reinforcing relationships. In The Analects, written around 500 BCE, the Sage tells one of his disciples that his doctrine has only “one single thread running through it.” What is it? “Loyalty and reciprocity, and that’s all,” he replies.

Another disciple asks, “Is there any single word that should guide one’s entire life?” and Confucius replies, “Should it not be reciprocity? What you do not wish for yourself, do not do to others.”

In classical Chinese, the character used for the idea of “reciprocity” is shu, which carries a broader resonance of “tolerance,” “generosity” and even willingness to “excuse,” “forgive” and “show mercy.” It also implies that one’s actions towards others – or by implication between countries – invariably conditions their responses, and vice-versa, in an endless dialectic chain of cause and effect.

In the Confucian universe of shu, concessions made as a demonstration of good intention should not simply be accepted by the recipient as something “won.”

In the Confucian universe of "shu", a concession made as a demonstration of good intention should not simply be accepted by the recipient as something “won,” but should serve as a catalytic gesture which then presents an opportunity, even an obligation, for the counterpart to reciprocate with a comparable gesture.

So, what has prevented Beijing from re-embracing this Confucian notion? Aside from the fact that Confucianism was savagely attacked and denied by Chinese revolutionaries during the past century, a fear that manifesting an abundance of shu might make China appear too conciliatory, thus weak, has also served as an impediment. President Obama learned something himself about appearing too weak when he was criticized at home for his seemingly supine deportment in Beijing. The Chinese explanation for their own posture is that issues like Tibet, social stability, Taiwan arms sales, are all “hexinli,” or, “core interests,” which brook no compromise.

As State Councilor Dai Bingguo, who oversees China’s foreign policy, explains, “China’s number one core interest is to maintain its fundamental system and state security; next is state sovereignty and territorial integrity; and third is the continued stable development of the economy and society.” But, with so many interests coming under the rigid rubric “core,” only a narrow margin of territory remains for Chinese diplomats to maneuver and actually negotiate.

The Obama-Hu conversation has created a new, unexpected thaw in an increasingly frozen relationship, but the moment could pass.

Over the past century and a half, the Chinese have come to view international relations as a ruthless competition in which the interests of weak nations like China were almost always trumped by the more powerful. But given its recent rise and new economic power, the idea of China as a victim or a world unto itself as in the Mao era, in a universe where one nation’s gain is always another’s loss, is increasingly outmoded and counterproductive. After all, China has become an ever more prominent member of the global community. As a member of the WTO, it has benefited enormously from the transnational web of connectivity arising around the advance of globalization. Thus, it is somewhat disingenuous for its leaders to imagine that they can irrevocably corral off whole hemispheres of activity as lying completely outside the sphere of common interest. Simply put, with the benefits of global citizenship come new obligations of global responsibility

One way that the US can help China’s leaders feel more comfortable with these new responsibilities and adopt a more reciprocal posture in negotiating them is to ensure that friendly gestures are embraced in a way that allows China to see how such interactions can convey a new self-confidence and magnanimity rather than weakness.

There’s little time to waste. The Obama-Hu conversation has created a new, unexpected moment of thaw in an increasingly frozen relationship, but the moment could pass. After all, it’s still possible that the US-China relations could become derailed in American acrimony over the loss of jobs to China, the US imbalance of payments, the vagaries of currency exchange, or over leadership disagreements or civil unrest in China.

Many issues still divide the two countries. But, Chinese leaders should not fail to appreciate that Obama and Clinton have extended a new hand of friendship. If China’s leaders truly want better relations, now is the time to recognize that these intentions are genuine and find their own ways to respond in kind.

If China’s future increasingly depends on Beijing being more flexible and reciprocal, then there’s no better place to look than its own traditions.

Orville Schell is director of the Center for US-China Relations at the Asia Society and founder of “The Initiative for US-China Cooperation on Energy and Climate Change."
Rights:Copyright © 2010 Yale Center for the Study of Globalization
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7 April 2010
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It is not so much the US-China relationship that is frozen, but the Chinese leadership. In the past they have discovered, with some creativity, ways to cling to power while accepting change. They have switched to become the vanguard of the capitalist class, instead of the working class. The left of the party have been reduced to trying to mitigate the effects of rampant capitalism on the peasants and urban poor, somewhat like the left parties in Europe.
Unfortunately history shows that an autocratic regime can subvert the market to its own ends (Nazi Germany being the obvious example). Although capitalism perhaps thrives best in an open society, it doesn't really need it. To a large extent the Chinese Communist Party controls the capitalists.
The leadership of the CCP are concentrating on keeping 'core interests' frozen. They understand that any change that they don't have full control of is a threat to their power. The US administration can not hope to melt their position. Heat from the people of China will do that. We will see if the CCP can show enough flexibility in the face of popular discontent to ride this out.
-Andy Macdonald , Maine, USA