China
Global cooperation needed on rare earths
Author: Julie Klinger, Boston University
Today, as in 2010, the international discussion surrounding China’s dominance of the rare earth sector is partial and problematic. It is neither in China’s nor the international community’s interest for China to be responsible for supplying the majority of global demand for rare earth elements. In fact, in 2016, China released a Rare Earth Development Plan to protect domestic rare earth reserves while growing the domestic rare earth industry.
The point of this plan — and previous policy measures — is to change China’s position in the global division of toxic labour. For decades, China’s hinterlands and labourers bore the brunt of mining most rare earths for global consumption. After watching their crops fail, their livestock die, and their relatives succumb to cancer and bone diseases, people demanded better. Government responses have included consolidating the mining industry while incentivising research and development (R&D) in high-tech applications for rare earths.
In these times, China doesn’t want to mine rare earths for the rest of the world. And if recent news coverage is any indication, the rest of the world does not want to rely on China for the global rare earth supply.
Diversifying global rare earth supply chains is therefore a point of common interest between China and other major economies. But policymakers and investors in other rare earth-rich countries are instead fixated on geopolitically-charged rhetoric rather than the realities of the sector.
Rare earth elements are not rare, but they are crucial to our contemporary economy. They are expensive to produce, and refining them generates all manner of hazardous waste. In light of this, policymakers in Australia, the United States, Japan and other China-dependent economies must be straightforward about meeting these challenges. This requires careful regulation — not less, as some argue — and investments in multiple aspects of the rare earth supply chain.
Recent proposals to simply open more mines in different parts of the world may help ease the burden on China’s environmentally-exhausted mining regions. But it will do little to diversify the global supply chain if all raw materials are still routed through China for value-added processing.
The challenge is that downstream industries that produce rare earth-bearing technological components for critical information, energy and military technologies are struggling to beat the so-called ‘China price’. This has historically been low because it excluded the environmental costs of rare earth production — something the Chinese government now estimates amounts to several billion dollars in key mining areas. Without government support, firms outside China tried cutting costs in order to ‘beat China’, sometimes resulting in environmental and safety violations.
Abundant experience has already shown that such tactics do not provide lasting solutions. Companies that opened in Australia, Malaysia and the United States after 2010 struggled to address public fears of environmental mismanagement, and also failed to capture a significant market share from China. Private investment capital was there to help, but government policy was not. Despite an explosion of investment in the rare earth sector from 2011 to 2014, governments failed to provide a policy context to support the long-term sustainable growth of mining, refining, and value-added processing facilities outside China.
The missing ingredients were market certainty and environmentally-responsible practices. Without market certainty, companies are hard-pressed to invest in environmentally superior practices because the rules of the global free trade game mean that the cheapest producer wins. When China attempted to account for the environmental cost of rare earth production by increasing the price of exports, this actually created a global market more conducive to global supply chain diversification.
But China was sanctioned by the World Trade Organization and forced to remove all quotas and price adjustments in 2014. The subsequently lowered prices spelled disaster for almost all companies outside of China. If the international business community has learned nothing else in the last 30 years, it is that in the race to the bottom, China’s economy tends to win — albeit often at the expense of its workers.
Now, with the benefit of hindsight, policymakers can do things differently than they did post-2010 and perhaps this time actually solve the problems presented by China’s control over…
Business
Gordonstoun Severs Connections with Business Led by Individual Accused of Espionage for China
Gordonstoun school severed ties with Hampton Group over espionage allegations against chairman Yang Tengbo. He denies involvement and claims to be a victim of political tensions between the UK and China.
Allegations Lead to School’s Decision
Gordonstoun School in Moray has cut ties with Hampton Group International after serious allegations surfaced regarding its chairman, Yang Tengbo, who is accused of being a spy for the Chinese government. Known by the alias "H6," Mr. Tengbo was involved in a deal that aimed to establish five new schools in China affiliated with Gordonstoun. However, the recent allegations compelled the school to terminate their agreement.
Public Denial and Legal Action
In response to the spying claims, Mr. Tengbo publicly revealed his identity, asserting that he has committed no wrongdoing. A close associate of Prince Andrew and a former Gordonstoun student himself, Mr. Tengbo has strenuously denied the accusations, stating that he is a target of the escalating tensions between the UK and China. He has claimed that his mistreatment is politically motivated.
Immigration Challenges and Legal Responses
Yang Tengbo, also known as Chris Yang, has faced additional challenges regarding his immigration status in the UK. After losing an appeal against a ban enacted last year, he reiterated his innocence, condemning media speculation while emphasizing his commitment to clear his name. Gordonstoun, on its part, stated its inability to divulge further details due to legal constraints.
Source : Gordonstoun cuts ties with business chaired by man accused of spying for China
Business
China Dismantles Prominent Uyghur Business Landmark in Xinjiang – Shia Waves
The Chinese government demolished the Rebiya Kadeer Trade Center in Xinjiang, affecting Uyghur culture and commerce, prompting criticism from activists amid concerns over cultural erasure and human rights violations.
Demolition of a Cultural Landmark
The Chinese government recently demolished the Rebiya Kadeer Trade Center in Urumqi, Xinjiang, a vital hub for Uyghur culture and commerce, as reported by VOA. This center, once inhabited by more than 800 predominantly Uyghur-owned businesses, has been deserted since 2009. Authorities forcibly ordered local business owners to vacate the premises before proceeding with the demolition, which took place without any public notice.
Condemnation from Activists
Uyghur rights activists have condemned this demolition, perceiving it as part of China’s broader strategy to undermine Uyghur identity and heritage. The event has sparked heightened international concern regarding China’s policies in Xinjiang, which have been characterized by allegations of mass detentions and cultural suppression, prompting claims of crimes against humanity.
Rebiya Kadeer’s Response
Rebiya Kadeer, the center’s namesake and a notable Uyghur rights advocate, criticized the demolition as a deliberate attempt to erase her legacy. Kadeer, who has been living in exile in the U.S. since her release from imprisonment in 2005, continues to advocate for Uyghur rights. She has expressed that her family members have suffered persecution due to her activism, while the Chinese government has yet to comment on the legal ramifications of the demolition.
Source : China Demolishes Uyghur Business Landmark in Xinjiang – Shia Waves
China
China Expands Nationwide Private Pension Scheme After Two-Year Pilot Program
China’s private pension scheme, previously piloted in 36 cities, will roll out nationwide on December 15, 2024, enabling workers to open tax-deferred accounts. The initiative aims to enhance retirement savings, address aging population challenges, and stimulate financial sector growth.
After a two-year pilot program, China has officially expanded its private pension scheme nationwide. Starting December 15, 2024, workers covered by urban employee basic pension insurance or urban-rural resident basic pension insurance across the country can participate in this supplementary pension scheme. This nationwide rollout represents a significant milestone in China’s efforts to build a comprehensive pension system, addressing the challenges of a rapidly aging population.
On December 12, 2024, the Ministry of Human Resources and Social Security, together with four other departments including the Ministry of Finance, the State Taxation Administration, the Financial Regulatory Administration, and the China Securities Regulatory Commission, announced the nationwide implementation of China’s private pension scheme effective December 15, 2024. The initiative extends eligibility to all workers enrolled in urban employee basic pension insurance or urban-rural resident basic pension insurance.
A notable development is the expansion of tax incentives for private pensions, previously limited to pilot cities, to a national scale. Participants can now enjoy these benefits across China, with government agencies collaborating to ensure seamless implementation and to encourage broad participation through these enhanced incentives.
China first introduced its private pension scheme in November 2022 as a pilot program covering 36 cities and regions, including major hubs like Beijing, Shanghai, Guangzhou, Xi’an, and Chengdu. Under the program, individuals were allowed to open tax-deferred private pension accounts, contributing up to RMB 12,000 (approximately $1,654) annually to invest in a range of retirement products such as bank deposits, mutual funds, commercial pension insurance, and wealth management products.
Read more about China’s private pension pilot program launched two years ago: China Officially Launches New Private Pension Scheme – Who Can Take Part?
The nationwide implementation underscores the Chinese government’s commitment to addressing demographic challenges and promoting economic resilience. By providing tax advantages and expanding access, the scheme aims to incentivize long-term savings and foster greater participation in personal retirement planning.
The reform is expected to catalyze growth in China’s financial and insurance sectors while offering individuals a reliable mechanism to enhance their retirement security.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
Read the rest of the original article.
- Gordonstoun Severs Connections with Business Led by Individual Accused of Espionage for China
- China Dismantles Prominent Uyghur Business Landmark in Xinjiang – Shia Waves
- China Expands Nationwide Private Pension Scheme After Two-Year Pilot Program
- How a scandal over sanitary pads is shaping feminist activism in China
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