China is the new superpower by showing excellence in several economic sectors, such as foreign exchange reserves and export value. In 2012, both of these sectors became the largest in the world and one of the biggest export commodities rare-earth. China became the dominant manufacturer, user, and exporter of rare earth since 1978, also since 1990, China produced 27 percent of the world's rare earth, and it keeps going up every year.
In 1927 China's scientists discovered rare earth in Bayan Obo, and since 1957, China started the production of these elements. After more eight decades, limited earth resources have found in 21 of China's Provinces and Autonomous Regions-Fujian, Gansu, Guangdong, Guangxi, Guizhou, Hainan, Henan, Hubei, Hunan, Jiangxi, Jilin, Liaoning, Nei Mongol, Qinghai, Shaanxi, Shandong, Shanxi, Sichuan, Xinjiang, Yunnan, and Zhejiang. China is the largest supplier of rare earth metals in the world, and almost 95% of limited earth metal supplies controlled by China (Tse 2011).
Before 1965 the demand for elements from rare earth was minimal. At that time, the most massive quantity came from India and Brazil, which was produced by Depocito placer. In South Africa, in the 1950s, it was a leading rare earth producer that stored monazite deposits. The Mountain Pass mine in California at that time produced a small amount of rare earth oxide from Precambrian carbonatite.
In the mid-1960s, the demand for elements from rare earth increased very rapidly when color television sets first entered the market. One of the unique earth
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elements, europium, became an essential material in producing color images on television. An American-owned mine, Pass Mountain began producing emporium from bastnasite, which contained about 0.1% europium.
In turn, put the Mountain Pass Mine into a company with rare earth production in the world and placed the United States as a leading producer.
The United States does not forever hold the title of the world's largest producer of rare-earth. In the early 1980s, China began producing several rare piles of earth and made it replace the U.S. position as the largest manufacturer in the world. From the 1990s to the early 2000s, China continued to strengthen its power in the world market with its rare earth production.
China sold its limited earth products by providing low price rates on the market. It made the U.S. companies in Mountain Pass unable to compete and forced to halt operations of its company, as well as other countries around the world, could not rival the production of China.
At the same time, the demand of the world for rare earth metals jumped. Various products require precious earth metals such as defense, industrial, aviation, and consumer electronics products. With the success of the production of rare earth metals in large numbers, it has made the developments of technology in China rapidly growing to be able to compete with others. The high dependence on rare earth supplies from China has felt by the market in 2010.
China had cut the rare earth export quotas to Japan and is allowed by the heated diplomatic relations between the two countries. China also sees that many companies need limited earth supplies such as premium gadget
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manufacturers, Apple Inc. The iPhone manufacturer uses rare earth metal in speakers, cameras, and to make the phone vibrate. Therefore China uses the power of rare earth to influence other countries and make other countries dependent on it; then, China made a policy that benefited the country.
On September 7th, 2010, the Japanese coast guard vessels seized a Chinese fishing trawler near the Senkaku Islands, the disputed islands in the East China Sea. This action turned out to make Beijing decide to temporarily stopping exports of the rare earth elements to Japan. Japan imported almost 90 percent of the unique earth elements to produce its various high-techs. Because of it, many of Japan's manufacturers became panic and pushing up the rare earth prices in global markets. By temporarily stopping the export of the unique earth elements to Japan, China emphasized the Japanese government so that a few days later, the Chinese sailors were released by the authorities Japan.
As a controlling country rare earth, this is certainly not easy for China was in connection with the joining of China in the WTO in 2001 indirectly China is required to follow the regulations that apply in the WTO. China thought that there was nothing wrong with this quota limitation. It has done to protect rare earth reserves, which are getting thinner. Rare earth is not the renewable element, and in its processing, this element leaves a lot of radioactive waste results from the separation of items from the mineral core that it uses a lot of acids. By doing restrictions, indirectly, they could protect the environment. But this reason is not just accepted by the United States, Japan, and European Union member states.
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They assume that it used as an excuse for China to gain profits from producers domestic. As a result of these American demands, the WTO declared that the restriction of quotas violates the rules of global trade. Based on those things, China demanded to stop the quota limitation done.