China Got the Geopolitical Shaft With a Big Discovery
The motherlode of rare-earth metals has been found on an island under Japanese control.
It’s a safe bet that not even 1% of Americans could point out Marcus Island on a map. Its notoriety is most recently based on being a target of one of Admiral William F. Halsey’s early raids on Japanese installations in the months after the attack on Pearl Harbor. Well, Marcus Island now has a new claim to notoriety: Giving the People’s Republic of China the geopolitical shaft.
According to an April 19, 2018 report by Fox News, this small atoll, about 1,200 miles from Tokyo and about 1,400 miles from Wake Island, is sitting on a motherlode of rare-earth metals. As in, enough to supply world demand for them for at least the next four to eight centuries.
You might be asking, “What’s the big deal about rare-earth metals? And why nine months later?” Well, for starters, if you want to know why it matters, just look at the cell phone you may well be reading this article on. Rare-earth metals make that smartphone possible. Without rare-earths, it’s just not possible to keep our economy going.
And China, for now, has about 95% of the world’s rare-earth metal production. This has been used by China as a bit of a “stick” when there have been tensions. Cut off the rare-earth metals, watch countries and companies who depend on those metals for high-tech devices become much more amenable to Chinese demands.
The key words are, “for now.” With Japan developing access to these metals, well, the situation has drastically changed. The position of Marcus Island is such that China has to come out into the middle of the Pacific — and while its navy is growing, it’s not growing fast enough to make that challenge successfully, especially given that India still would warrant China’s attention.
China is facing a bind much similar to what Russia is dealing with vis-à-vis natural gas. It used to have virtually all of the proverbial pie, could charge a higher price for what it exported, and had the ability to leverage the product. The Marcus Island mother lode changes that. Now, China is finding that not only does it not have a near-monopoly on rare-earth metals, but also that the pie is smaller. Beijing’s leverage has decreased greatly as a result.
Just as Russia is losing its geopolitical kompromat over Germany and Eastern Europe thanks to American exports of natural gas, China has lost its leverage over the United States and its allies. Japan can now provide the rare-earth metals indefinitely to the United States, meaning the U.S. can apply more pressure to China over trade, its aggression in the South China Sea, and on human rights. And as a result, Japan is laughing all the way to the bank as it reaps the reward for providing this technological lifeblood.
The geopolitical ramifications of the Marcus Island mother lode will be good news for the United States of America, especially as China now faces the double whammy of lost leverage and lost money. That good news is also going to emerge in a more concrete way for individual Americans as well, in the form of lower prices for electronic devices, thanks to the increased supply from a friendlier and more convenient source. It’s not every day when consumers win, America wins, and the butchers of Beijing lose. The best part of all is that no shots were fired.