Ten years of drinking ice, hard to cool hot blood, China's rare earth defense war, who is carrying the burden for us to move forward?

Tech 2023-07-08 21:32:59 Source: Network

On July 3rd, the Ministry of Commerce and the General Administration of Customs of China jointly issued a notice to implement export controls on two rare technologies, gallium and germanium.After the news spread, countries such as the United States and Japan, which had previously held high spirits in the semiconductor industry and vowed to block China's chip industry, became nervous one after another

On July 3rd, the Ministry of Commerce and the General Administration of Customs of China jointly issued a notice to implement export controls on two rare technologies, gallium and germanium.

After the news spread, countries such as the United States and Japan, which had previously held high spirits in the semiconductor industry and vowed to block China's chip industry, became nervous one after another.

The Western media also began to report many times, telling how unshakable China's position in the field of rare earth, a key raw material for the Semiconductor industry.

Indeed, today's Chinese rare earth industry has become a key trump card in the hands of the state, playing an extraordinary role in supporting the development of its own industry, as well as in combating sanctions and technological blockades imposed by countries such as the United States and Japan.

But what is little-known is that just 10 years ago, this resource, which should have been the bottom line of China's strategy, became an ugly scar on the Republic, and even made us the object of Western ridicule.

So, what exactly happened 10 years ago? How did China overcome difficulties and firmly grasp the dominance of rare earth, a key raw material, during these 10 years?

Let's start with a small mountain village at the border of Guangdong and Jiangxi.

1. Holding a golden rice bowl to beg for food

In August 2009, in Longpo Village, Changtang Town, Heping County, at the junction of Guangdong and Jiangxi, two 11 year old pupils drowned accidentally while playing near the village.

The passing of two young lives has become a wound that their respective families will never be able to heal. But this matter is not just the sorrow of two small families.

Because it was the trauma of the Republic that took away these two young lives - the mines left by illegal mining of rare earths across the Guangdong Jiangxi border.

Rare earth is a general term for more than ten rare metals, including samarium, neodymium, lanthanum, gallium and germanium. It is known as "industrial vitamin" and is widely used in aerospace consumables, semiconductor chips, even high explosive explosives, Rocket propellant and other fields.

Its strategic importance is self-evident.

Fortunately, China holds an absolute advantage in the global proven reserves of rare earths, and there was even a rumor that 'there is oil in the Middle East, and China has rare earths'.

Unfortunately, since the late 1980s and early 1990s, with the introduction of the Reagan Mineral Act, the United States has sealed off its own rare earth mining industry and publicly stated its intention to "stop mining its own rare earths and instead purchase and store them in large quantities from China." This important strategic asset that can almost determine the future of the country and nation was heavily stolen and sold to the West at a low price under the manipulation of Western capital.

The illegal mining of rare earths in China reached its peak around 2000 to 2010. At that time, almost every place where rare earth mines were discovered, from Jiangxi to Guangdong, and from Inner Mongolia to Hainan, there was a widespread act of illegal mining of rare earths.

Taking Guangdong as an example, around 2010, Guangdong Province approved a quota of about 2000 tons of legal rare earth mining, but the actual mining output was up to 40000 tons.

Behind the gap of nearly 20 times is a large number of national strategic assets that have been stolen and sold at a low price. What is even more despicable is that these illegal businessmen who illegally mine rare earth resources collude with Western capital and companies, fighting for a different place without considering the permanent damage to the local environment.

The drowning cases of two 11 year old elementary school students mentioned at the beginning were caused by illegal mining of rare earths, leaving behind mines.

But this raises a question, why does the country ignore such severe strategic resource losses and environmental damage?

2. The Gluttonous Feast of Capital

In fact, since 2004, the National Mineral Resources Management Working Committee has issued a notice, deciding to carry out protective mining of key mineral resources such as rare earths, implement total quantity control for specific minerals and advantageous minerals, and suspend the approval of new mineral development projects.

Its purpose is to protect national strategic resources.

At the same time, various provinces, especially Jiangxi, Guangdong, Inner Mongolia and other provinces with abundant rare earth mineral reserves, have increased their efforts to crack down on illegal mining of rare earths. But this central level of regulation and crackdown on rare earth resources at the provincial government level have not changed the current situation of rampant illegal mining.

Why is this happening? The reason is simple, there is a monster called Western capital standing on the opposite side of China's protection of key mineral deposits.

Simply put, before the 1990s, the United States was the most developed and exported country in the global rare earth industry. They not only control capital, but also the advantageous technology of the entire rare earth industry chain, and are also in the hands of Western countries in the United States.

The United States has begun to realize the value of rare earth mines and has implemented nuclear weapon level regulations on its own rare earth mining. After that, a large number of rare earth mining and processing enterprises from Western countries are unable to survive in the United States and have come to invest in China.

At that time, China faced two difficulties.

Firstly, the development of the national economy is relatively backward, or simply too poor.

The huge profits brought about by the illegal mining of rare earths have encouraged some unscrupulous domestic merchants to try the law and collude with American and Western capital to illegally mine China's rare earth deposits.

The logic behind this is not difficult to understand, just as the United States is powerless to deal with the problem of drug proliferation today, demand generates production. As long as there are a large number of drug addicts who are willing to purchase drugs at high prices, it will be difficult for you to fundamentally ban drug smuggling.

Similarly, as long as Western countries in the United States purchase rare earths at a "high price" and do not inquire about their sources, it will be very difficult to completely ban the illegal mining of rare earths.

Secondly, although China had rare earth raw materials at that time, mature smelting and extraction processes were in the hands of Western companies, so China could only engage in the lowest level of raw material supply work and had no say in the entire rare earth industry chain.

On the one hand, the West manipulates the rare earth industry chain, resulting in extremely rare rare earth resources that cannot be sold at high prices and domestic mining is not cost-effective. On the other hand, foreign capital lures illegal domestic merchants to engage in destructive mining for profit.

These two issues complement each other, resulting in the implementation of protective measures for rare earth resources by the country at multiple levels, but the results achieved are limited.

So, what measures did China take to change the current situation of begging for a living with a golden rice bowl and gain dominance over the rare earth industry chain?

In the final analysis, before 2010, the chaos in China's rare earth industry chain was actually caused by China's lack of control over relevant industries.

To put it bluntly, under the conditions of a market-oriented economy, capital is profit oriented. If Western countries are richer than us, they can naturally use market laws to manipulate the rare earth industry chain that affects the world.

Moreover, the global Scarcity of rare earth materials at that time was not as serious as it is now, and the whole rare earth industry chain belonged to the buyer's market. We need to make money and accumulate capital, and the United States and Western countries are the largest markets.

Specifically, the United States can delay the production plan for F22 by two years due to the shortage of rare earth raw materials, but China cannot miss the development opportunity of two years.

This unequal situation has led to serious internal friction in the domestic rare earth industry chain, with our own people fighting price wars with each other, but leaving the cheap to companies without Western countries.

However, after 2010, this situation has greatly improved, mainly due to two reasons.

First, the latest quenching technology developed by Xu Guangxian, China's "father of rare earths", has been widely promoted. Chinese enterprises have not only mastered raw materials in the production chain of rare earths, but also mastered more advanced quenching technology than the West.

The advancement of technology has brought about a reduction in costs, allowing China to win the rare earth industry chain dominance war with Western companies with less consumption.

Secondly, the national level has begun to consciously integrate domestic rare earth enterprises. Simply put, it means letting the "national team" appear and shoulder the banner of competing with Western countries in the United States for dominance in the rare earth industry chain.

As mentioned earlier, after the United States implemented its own rare earth mineral storage strategy, their country's rare earth enterprises have come to China to invest and mine China's rare earth resources.

Due to their technological and capital advantages, Chinese rare earth enterprises have become suppliers to others through market-oriented competition, always relying on others to survive, which naturally prevents them from gaining a say.

But after the "national team" entered the field, it was different. The simplest logic is that the national team is "not afraid of losses". For various "national" and "central" enterprises, entering the rare earth industry chain and making money is one thing, while helping China compete for the dominant position in the relevant industry chain is another matter.

If these two goals can be achieved simultaneously, naturally it is best; If it cannot be achieved simultaneously in the short term, then the importance of the latter goal is greater than that of the first goal.

Enterprises in European and American countries are powerful, but they rely on their strong capital and technological advantages. However, as scientists such as Xu Guangxian broke through the refining technology, the "national team" with more capital than them entered the arena to fight.

Gradually, these Western companies that originally dominated the industrial chain were unable to sustain themselves and gradually lost their former position.

For example, one of the most famous American companies in the global rare earth industry chain, the absolute industry giant McGonagall Magnetic, was acquired by China National Science and Technology Third Ring and China National Nonferrous Metals Corporation.

There are many similar examples, but the trend is the same. With the entry of the national team, China has gradually regained the dominance of the rare earth industry chain from these American companies, relying on its own developed quenching technology and huge resource reserves.

At this time, the main global companies for smelting and producing rare earths are all located in China. Illegal merchants stealing also lose its significance. After you steal, you still have to send them to Chinese state-owned enterprises for processing. How will these raw materials come from then on? Isn't it a matter of investigation?

Epilogue

No one's success is achieved by chance, nor is the country.

Nowadays, China can use rare earths to counter the US technological blockade in the semiconductor field. Of course, part of the reason is that times have changed. Who made China's rare earths essential resources for semiconductors, new energy, and even some advanced military equipment?

The more advanced technology, the more prominent the importance of rare earths, which is a benefit of the times for China.

However, if there was no national layout 10 years ago, and the efforts of scientists like Xu Guangxian 20 years or even 30 years ago, we could master technology and regain the dominance of the industrial chain, I'm afraid that today's global rare earth industry is still a buyer's market where the United States the final say.

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