This story first appeared in China Report, MIT Expertise Evaluate’s e-newsletter about expertise developments in China. Join to obtain it in your inbox each Tuesday.
When China introduced again in July that it was proscribing exports of germanium and gallium, it was a reminder of the leverage that China holds within the international provide chain for vital minerals, a bunch of 50 supplies decided by the US authorities to be of excessive strategic significance.
These minerals are utilized in pc chips and precision weapons, however they’re additionally necessary in clear tech, the applied sciences that can assist the world transition to renewable power to fight local weather change. I lately talked to Seaver Wang, co-director of the local weather and power workforce on the Breakthrough Institute, a California-based environmental assume tank that funds power coverage analysis, to grasp extra concerning the function vital minerals play.
Listed below are 5 huge questions I requested Wang about China’s insurance policies on vital minerals. The dialog has been evenly edited for size and readability.
Does China depend upon the worldwide provide chain for vital minerals?
Wang: Once we discuss China’s dominance of vital minerals, it’s actually usually on the processing stage. However China is importing uncooked ore to be processed.
Crucial, attention-grabbing minerals from a clean-tech perspective are platinum group metals [that are used in technologies that turn hydrogen into power]. So metals like iridium, platinum, palladium, [and] zirconium are utilized in varied gas cell applied sciences and within the electrolyzers themselves. An enormous quantity of that manufacturing really comes from South Africa.
After which cobalt—75% comes from the DRC [Democratic Republic of Congo]. Excessive-purity quartz [which is used across the solar manufacturing sector and also for computer chips]—most of it comes from the US. An attention-grabbing one is definitely thorium for nuclear [power plants], as a result of China is experimenting with thorium-fueled quick reactors as a part of the nuclear demonstration initiatives. And nickel—a heavy quantity of it comes from Indonesia.
Does the Chinese language authorities think about the actual fact it has to import numerous minerals a vulnerability?
Wang: China’s lead in growing novel battery applied sciences like sodium-ion batteries is due to efforts to make sure provide chain resiliency. A sodium-ion battery insulates you from the lithium provide chain uncertainty and from [that of] nickel and cobalt. A whole lot of the R&D efforts have been closely supported as a result of they’ve provide chain benefits.
[Ultra-pure quartz] is definitely one instance the place there’ve been plenty of joint public-private efforts to develop extra ultra-pure quartz capability in China. They’re investing in home manufacturing as a result of that’s one sector the place North America dominates present manufacturing. [Two American companies in North Carolina] produce like 180,000 tons of ultra-pure quartz a 12 months; [Jiangsu Pacific Quartz Products, a Chinese company] is scaling up [its capacity] this 12 months from 5,000 to 20,000 tons; and that’s principally the entire international manufacturing.
And apparently, the US has no export restrictions on ultra-pure quartz to China, [but] China really has an import tariff of 16% on US ultra-pure quartz as a result of they need to encourage extra home reliance.
Does China need to construct a self-sufficient home clean-tech provide chain?
Wang: Whether or not it’s for the US or China, despite the fact that each are giant international locations, any fantasy of full self-sufficiency is clearly only a fantasy.
I feel the good policymakers in each international locations are extra considering round being ready for some decoupling or commerce conflict, however they’re not making an attempt to design industrial coverage round a whole rupture. They’re making an attempt to [have] some home know-how, capability, and different sources of provide in order that if there was an export restriction on one thing, there would nonetheless be a worth spike, and that trade would possibly nonetheless undergo some arduous instances however it could survive.
However the US and China are nonetheless recurrently speaking about learn how to collaborate on local weather. Isn’t that inconsistent with the planning for decoupling?
Wang: Local weather advocates and activists might have a barely unrealistic expectation that each side can pursue the Hollywood ending, the place all of us work collectively to combat the worldwide problem of local weather change.
That’s most likely a bit unrealistic as a result of the US and China simply genuinely, genuinely have so many coverage areas the place there are sturdy disagreements. And so I feel we’ve got to quite conform to disagree, and the most effective path ahead can be to set good guardrails on competitors.
I feel many US policymakers are reluctant to be too muscular on clear tech, no less than on the Democratic facet, as a result of they see US local weather targets as being very tied to imports of Chinese language clear tech they usually don’t need to jeopardize these imports. And I do marvel if on the Chinese language facet, there’s some reluctance to be too aggressive as a result of these are literally very profitable export industries for China. It blew my thoughts after I realized this, however photo voltaic PV [photovoltaic] merchandise really account for a surprisingly giant share—7%—of China’s commerce surplus.
Apart from the US and China, what are different international locations’ roles within the international clean-tech provide chain?
Wang: One factor to bear in mind is the poor and middle-income international locations that at present export plenty of ore however don’t profit from any of the value-added downstream industries.
Zimbabwe instituted some export restrictions on unrefined ore. They needed to encourage worldwide monetary funding into refineries within the nation to export refined merchandise to profit their folks extra. And Indonesia did the identical factor for nickel.
There’s an enormous quantity of starvation in rising economies to enter these industrial sectors and hop on to the clean-energy transition and profit economically. You see this in India, Indonesia, Zambia, DRC, and Zimbabwe. A part of me wonders typically whether or not even in simply 5 or 10 years we’ll look again on this US-China provide chain debate, anxiousness, paranoia, or no matter and it’ll all simply appear foolish, as a result of provide chains will look utterly totally different.
Do you assume clear tech will grow to be as politicized because the semiconductor trade is correct now? Let me know your ideas at firstname.lastname@example.org.
Meet up with China
1. A 12 months after the “CRISPR child” scientist He Jiankui was launched from jail, he’s quietly getting again to tutorial roles. In the meantime, gene-editing applied sciences within the West have advanced past what He did, prompting new questions. (New Yorker $)
- My colleague Antonio Regalado first broke the story of He Jiankui’s experiment on gene-edited infants again in 2018. (MIT Expertise Evaluate)
2. On the huge auto present in Munich final week, German manufacturers like Volkswagen have been feeling the competitors from Chinese language electric-car firms. (Bloomberg $)
- The EV trade has changed shopper web to grow to be the brand new investor’s darling in China. (Wall Avenue Journal $)
3. Chinese language government-linked social media operations are utilizing image-making AIs to create visible content material, based on a Microsoft report. (Washington Put up $)
4. Beijing has ordered central authorities officers to cease utilizing iPhones and different international smartphones at work with a purpose to lower the nation’s dependence on international applied sciences. (Wall Avenue Journal $)
5. The Chinese language authorities is constructing a nationwide park for the conservation of large pandas. There’s one downside: tens of hundreds of individuals already stay there. (Sixth Tone)
6. Bear in mind the liquor-infused latte that took China by storm final week? Right here’s the backstory on how the Chinese language model Luckin overtook Starbucks to grow to be the most important espresso chain within the nation. (CNBC)
Misplaced in translation
Li Jiaqi, one of many greatest Chinese language livestream e-commerce influencers recurrently watched by hundreds of thousands each evening, is going through one other profession disaster after getting back from a mysterious silence final 12 months. On September 10, throughout a livestream the place Li was promoting a 79 RMB ($12) eyebrow pencil, a viewer commented that the costs have been getting larger. This remark triggered an emotional outburst from Li, who responded by suggesting it was as a result of the viewer didn’t work arduous sufficient to get wage will increase. The sarcastic remark, in opposition to the backdrop of China’s common financial slowdown, led to a big backlash from Li’s followers, with over 660,000 followers unfollowing him on social media.
Because the Chinese language publication Huxiu reported, the controversy is rooted within the wider change occurring within the livestream trade. Stars like Li shot to fame not solely due to their personalities, but additionally as a result of they have been in a position to negotiate the “lowest costs on the web” from manufacturers. However because the trade panorama shifted, manufacturers began to show from big-name influencers to area of interest and mid-tier ones. As the highest influencers’ negotiating energy wanes, they discover it arduous to maintain up with their lowest-price guarantees, and followers begin to flip in opposition to them. As this trade pattern continues, there will likely be fewer family names like Li sooner or later.
Yet another factor
Do you know that in some font viewer software program immediately, the pattern textual content line for Chinese language fonts is a ridiculous sentence that means “I can eat glass, it doesn’t harm me”? Chosen as an absurdist instance of a fancy sentence, this precise line was translated into over 150 languages in a crowdsourced linguistic challenge within the early 2000s. Now it lives on the web perpetually within the type of memes and font pattern texts.