There are reports out today of China either planning to reduce its exports of rare earths by 30 percent or ending its exports entirely. I am betting it is the former, but either way, this should come as no surprise to regular readers of this blog.

For way back a year ago, in “China U.S. Dispute Over Raw Materials. Rare Earths Are Key,” we wrote of China’s plan to reduce its exports of rare earths and of how that might impact various industries:

This [WTO] complaint highlights a major issue for world trade down the road. Modern industry relies on certain metals that are actually quite rare. If export of those metals is disrupted, it will cause severe dislocations in many high tech and other businesses. For China, the big issue is actually not the metals listed above. The big issue is rare earths. China is currently overwhelmingly the largest supplier of rare earths in the world, with well over 90% market share. Rare earths are essential to produce the magnets required for motors for electric cars and for certain components used in wind power turbine manufacture. China recently imposed restrictions on the export of rare earths. It is clearly China policy to gradually force all manufacturing using China rare earths to occur in China. Without the location of an alternative supply, China is in a position to dominate electric car production market for many years. This no doubt helps explain why Warren Buffet’s Berkshire Hathaway chose to buy into BYD Company, a China based battery and electric car company. [Full Disclosure: Dan has been an investor in Berkshire Hathaway almost ever since Buffet-directed investments made his alma mater, Grinnell College, the “richest liberal arts college” in the World]

As part of a similar strategy, China is seeking to control the market for other key minerals by strategic purchases outside of China. Some of the target minerals are platinum, chromium and silica sand. Like it or not, China’s approach seems much more likely to succeed than the filing of disputes with the WTO.

Who was listening?

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Photo of Dan Harris Dan Harris

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network. 

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

He was named as one of only three Washington State Amazing Lawyers in International Law, is AV rated by Martindale-Hubbell Law Directory (its highest rating), is rated 10.0 by AVVO.com (also its highest rating), and is a recognized SuperLawyer.

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.