In a Fortnight STRATEGIC IMPLICATIONS OF CHINA'S CONSOLIDATION OF RARE EARTH INDUSTRIES By L.C. Russell Hsiao

The Chinese government is stepping up control over the country's rare earth supply, key elements needed to develop advanced military technology. In early September, Beijing released guidelines to help facilitate mergers and acquisitions of the rare earth sector and enhance the consolidation of this strategic industry under Chinese state-owned enterprises (www.gov.cn; No. 27 [2010]). Chinese leaders have long emphasized the strategic importance of "rare earths." As the late Chinese patriarch Deng Xiaoping famously stated, "The Middle East has oil, and China has rare earths." China currently supplies approximately 97 percent of the world's consumption of "rare earths," which includes 17 elements such as cerium cerium, neodymium lathanum, yttrium and dysprosium, to name a few. Rare earth elements (REEs) have become essential components in high-tech commercial as well as military applications. REEs are used in magnets, lasers, fiber optic cables, computer monitors, cell phones, stainless steel and a number of green technologies. Moreover, REEs have extensive uses in missiles, smart weapons, jet engines, navigation instruments and other advanced military technology. 

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