The Chinese must have taught Walmart – they have been doing the same to US manufacturers for a long time, where the cost of safety, pensions, and environmental protection are not included in their prices.

They have also been doing the same in many other industries, for ex, Vitamin C production, as well as supply of magnesia and bauxite for steel and aluminum production.

When are we going to wake up and start charging an environmental tarif on all their goods, etc.

It would be nice if there was an easy way to e-mail these articles to other people!

I’m always listening for a canary singing in the coal mine. And your song sounds “sweet”. Thank you for that.

Not sure about your suggestion that China embarked on “predatory” pricing.

I guess it is all in how you define “costs”.

Perhaps a fairer assessment of the Chinese position is in your other words? … ie. that without the burden of environmental compliance costs carried by Western or first world producers that China had a decisive cost advantage. As awareness grows of the true costs of the environmental damage, in this, as with so many other cases, the opportunity for “ecological or environmental arbitrage” between first and third world producers is removed. The efforts of people such as yourself and the PBS airing of that brave Brit journalists’ story about Chinese environmental degradation are critical to this discussion.

And a loud thank you for your Western market economy comments. As Krugman in the NY Times keeps reminding people, China is a mercantilist economy – that means they play a different game to ours – but one with its own rule book nevertheless. And one mercantilist strategy for advancing exports and minimising imports, is to defer the costs of environmental remediation into the future while creating jobs now and racing to gain share in extraction and downstream processing. Once you have dominant market share and pricing power, you can take care of the remediation costs. … and as you point out, our market economy with it’s short term investment horizon and obsession with 1/4 ly reporting, is ill equipped to the task of serving Western society’s broader strategic interests.

To be fair, China have always been very open about the fact that they have a different system. And as you say, their domestic appetites are growing rapidly.

As you point out, it is our own “system” that has been “asleep at the switch”.

Keep singing your sweet song – and perhaps we will see some intelligent policy decisions supporting viable extraction and downstream processing in the “West” in the not to distant future.

And with that will no doubt come some great investment opportunities. Look forward to reading your views on those as they emerge. And also interested to hear your views on the likely lead times for extraction and downstream processing capacity to come on line outside China.

Thanks.

Karl Mattingly

I have been in and out of A-Power Generation Systems (APWR) several times. APWR is a maker of windmills; has teamed up with GE in building a wind turbine plant in China, and recently announced plans to build a plant in southwest USA.

APWR’s shares prices have recently dropped significantly. I would like to get back in at current prices. The problem preventing me from reinvesting in APWR is I wonder where the heavy magnets are going to come from? Certainly, their Chinese plant will be provided for, but I wonder now if their upcoming USA plant will have access to said REEs.

Following APWR over the next many months may prove to be a signal as to how well China can, and is willing to supply out of the country concerns such as APWR’s.