The exit from this seemingly illogical trade [lending money to America to buy Chinese goods] will leave China sitting atop a pile of devalued assets, but also, possessed of a world-class industrial infrastructure and having gone a long way towards hollowing out and undermining the economy of its sole strategic competitor.
They go on to note that not only has China now built a world class infrastructure, and cornered the market for numerous important commodities (in particular Earth Metals), they also have the fate of their largest competitor in their own hands – they are the arbitrators of Dollar value, at a time when the USA is dependent on borrowing or printing money. And about those Earth Metals – they are crucial materials used in the manufacture of many cutting edge hi-tech products including modern lasers, hard drives, iPods, wind turbines, navigation systems, air defence systems, filtering bacteria from water, anti-nerve gas treatments and more. According to the Telegraph China mines over 95% of the world’s rare Earth Metals, and now they’re considering placing a total ban on exports.
A draft report by Chinas Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs.
China is running away with the green technology prize. It has conquered a third of the world market for solar cells and is on a breakneck course to build 100 gigawatts of wind turbines by 2020, doubling again the global capacity for wind power across vast stretches of Inner Mongolia and Xinjiang.
A glimpse of the New World Order perhaps? East Asia rising, dollar hegemony smashed, Western productive capacity hollowed out, and economic (and physical) wars over limited resources as global demand surges.