Deregulating the Rare Earth Industry
The principle thing that China is doing with the rare earth industry is regulate it. In fact, the country is attempting to regulate this industry in much the same way that regulatory agencies for other industries, such as healthcare or finance, are striving to regulate the activities of various organizations that work within it. The principle difference, of course, is that China has a near monopoly in this industry. The vast majority of the world's 17 essential substances that are comprised by the rather broad term of rare earths are mined by China -- in many instances, that mining takes place in Asia itself (No author, 2012). By offering subsidies to Chinese companies that are involved in this industry, China is attempting to regulate their productivity to keep pace with demand and to possibly fuel the laws of supply and demand that benefit the country. Additionally, the Chinese government is seeking to control the flow of these materials to the outside world, and to ensure that they are not overly-mined and produce any shortages.
The problem, of course, is that these substances are too valuable and play integral roles in the operation of a number of different devices from communication...
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