China is well within its rights, legally and morally, to limit rare earth exports, argued an article in Chinese state media on Thursday, days after the World Trade Organization ruled against China on its curbs of raw materials exports.
The People's Daily, the mouthpiece of China's ruling Communist Party, said claims by countries that China's export curbs on the minerals threatened their economic and national security were "groundless".
"It's not that other countries don't have their own supplies, it is just that they have hidden them away," it said.
"China's handling [of rare earths] does not violate international rules and is not contrary to its WTO accession promises," the paper said....MOREIt's not so much that other countries have them hidden away, it's that mining and refining became uneconomic when China made the decision to crush all competition by flooding the market with supply.
It worked. The Mountain Pass mine, once the world's largest producer, was forced to shut down.
Now the Chinese' 2001 accession to the World Trade Organization is coming back around to bite them in the butt. If they play by the rules the price of rare earths comes down. If they don't, they get kicked out of the WTO.
Unfortunately for the MCP's and AVL's of the world, China is very skilled at playing the talk-talk game and will get to have it both ways for a couple years.