This is a brief peek under the skirts of the reason behind President Obama’s China trip. The gassy TV pundits have all pontificated as to why Obama decided to schedule his Asia tour at this time. Of course they all zeroed in on the trillion dollar debt that China is holding and most decided that Obama had to go and personally assure the Chinese that the treasuries that they are holding are still a solid investment. Some even speculated that the Chinese were concerned about the upcoming Health Reform legislation and its financial impact on the American Treasury. All of this is pure bull and I will explain why.
While many Americans are aware that the Chinese have financed our government’s debt to the tune of a trillion dollars. However, I doubt many Americans are aware that China is the world’s exclusive supplier of precious minerals that are needed industrially across the globe. These commodities are Lithium for batteries and rare earth metals cerium, thulium and samarium which are used to make magnets for motors. Several recent actions by China have caused great concern in Washington. First, China has signed a “Super Asia” contract with Toyota of Japan to supply both Lithium and rare earth metals for the projected expanded sale of the Toyota Prius hybred automobile throughout Asia. (Lithium for the batteries and Rare earth metals for the magnets used in the electric motor of the Prius.) The second issue is that China has decided to reserve a significant portion of these commodities for its own future manufacturing needs, thereby removing a significant supply from the current world marketplace.
The Pentagon accordingly has recently started reviewing its future equipment needs in terms of deciding its dependence on Chinese supplies. All of this is the real reason why the President needed to make this trip, without giving the appearance of urgency. I should also point out that these rare earth magnets are a key component of computer disk drives, so just imagine how the cost of computers would skyrocket if China reduced the supply of these metals available to manufacturers around the world. Just imagine….. Forget the trillion dollars, this is the real problem facing America.
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From having been a major producer (and consumer) of REM (from the Mountain Pass mine in the Mojave Desert, Calif.) until the mid-80s, the U.S. now no longer mines any REM. The world’s major producer is China (particularly from its Bayan Obo mining operation in Inner Mongolia), with considerably lesser amounts coming from Brazil, India and Russia.
"But I will not let myself be reduced to silence."
It was recently reported by a blog that one of the largest American developers of wind turbines had given an exclusive manufacturing contract to the Chinese for building these turbines. The American company had received a large contact for the development of wind turbines under the Stimulus Package which was supposed to provide jobs for Americans. The blogger expressed outrage that under this new contract American tax dollars would be providing 2000 new manufacturing jobs for the Chinese. This recent news about China’s substantial tightening up of their Rare Earth Metals export begins to make clear why the wind turbines had to be built over in China. Essentially the Chinese have a strangle hold on the expansion of further technological development in the west for those thousands of electromechanical products that need to incorporate REM magnets,i.e. rotary motors, stepping motors, linear motors, etc.
Years ago when the U.S. had responsible, less ideological government in Washington, they would have seen a situation like this developing and the Pentagon would have had DARPA spread some research money around to fund some R&D to find a means to build electric motors using other metals beside REM. But over the years Washington dropped the ball and now we are in a serious bind. Particularly, in respect to implementing all those new projects planned for the “Green Revolution” in America.
They won’t be built in China. Or not all of them.
The blogger (and others) forced 1000 of those jobs to stay in the US. It’s just unfortunate that it’s Texas.
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A-Power Energy Generation Systems won one aspect of the clean energy race and made history, as it will become the first Chinese manufacturer to export wind turbines to the United States. A-Power Energy Generation Systems and a consortium of Chinese and American companies — U.S. Renewable Energy Group, Cielo Wind Power, and the Shenyang Power Group — are planning to build a 600-megawatt wind farm in West Texas.
The project, which could power as many as 180,000 homes, will require 240 2.5-megawatt turbines and the farm will occupy 36,000 acres of land in West Texas. Nearly shovel ready, the construction effort is projected to create about 30 permanent jobs and 300 temporary ones. Ground-breaking on the wind farm is slated for March of 2010.
Financing will largely be sourced from Chinese banks with the U.S. government contributing loan guarantees and cash grants. In total, the wind farm is estimated to cost $1.5 billion.
"But I will not let myself be reduced to silence."
Victory! Texas Windfarm Companies to Create US Factory.
Dated 18 days after your link.
Thanks for this important update….