Source: BBC News
Rare earth metals are vital ingredients in a wide range of high tech product lines important to global trade. Speaking on BBC News, Carnegie's Yukon Huang explained that China's monopoly on these metals is a big concern for the West. At least in theory, the United States, the EU, and Japan have legitimate grounds to file a case against China at the WTO because China has levied export quotas in such a way that prices for Chinese producers are lower than prices for foreign producers, Huang said.
Huang explained that China only has one third of global reserves of these minerals; the bulk lies in the United States, Canada, and Australia. Several years ago, China warned that growth in the extraction of rare earth metals would not be sufficient to meet global demand so quotas would have to be levied. Over the last two to three years, Huang concluded, western producers have faced a dwindling supply that is not sufficient to meet their needs.