20 ms·

What if China corners the cobalt market?

94 points by devy 9y ago

baybal2 9y ago
When it comes to trade war topic these days, most Western commentators completely miss that a trade war is what China was preparing intensively for the last quarter of a century. They well expected an economic pressure on a scale even bigger than what the West puts on North Korea and banana republics. They totally understood that the West will not play nice with them forever. There is zero questions about China's economic policy being very strategic, and deliberate. Chinese state conglomerates may look to just littering around the world with money, but analyze it more, and you see a pattern, one that is very much like a game of Go - victory by limiting enemy moves. They buy ally countries, strategically - they buy resource supplying countries, often with major holds on markets of vital commodities. Their tech purchases - mostly underappreciated market leaders with industry wide influence. Kuka - the only company you can say to be Tier 1 in robotics, all other competitors combined will not be an equivalent for it. I has almost complete dominance over major heavy industries. Lattice Semi - the one and only FPGA company that can threaten the Xilinx-Altera duopoly. And so on and on and on. Their domestic tech development - even more so. People talk about China dominating consumer goods manufacturing without realisation that it has even bigger hold of manufacturing machinery industry - manufacturing can't really leave China with Chinese made manufacturing equipment being locked down. The whole industry you can call "Manufacturing machinery 2.0" is a domestic Chinese development. Biotech - China quietly ate the market for genetic engineering reagents, as well as much for complex organic chemistry. There are megatons of biotech startups in the West, but they all feel that they will eventually have to move to China to have any chance to scale - effectively they are already a Chinese property. Military allies - well, there things are even more obvious. Major trade agreements - same. Their idea is to bind any major developing market niche to Chinese economy before the West even realizes its emergence. Their idea - to make it so that if somebody wants to do anything any much big being impossible without involving a Chinese company or state institution at some part of the process - to make it "You can't do that without China"
- isrsal 9y ago
  Can you elaborate?
  - ggg9990 9y ago
    China has been developing its manufacturing expertise at the highest levels (they built the Bay Bridge) and their control of industrial resources (they have bought a big percentage of Africa). China is to the rest of the world as Apple is to the rest of the electronics industry.
    - seanmcdirmid 9y ago
      Neither of those claims are completely true: they definitely built some of the bay bridge, but definitely not all of it. They have invested in Africa, but don’t own a big percentage of Africa (if owning a continent was even sensical). China does not have overwhelming positions outside of manufacturing, which is fairly fungible.
      - GauntletWizard 9y ago
        They're rhetorically true, and we're having a rhetorical argument. China didn't build all of the bay bridge, no. They won several large parts of the contracts and subcontracted many more. The exact percentage is meaningless, the important point for argument is that they had a large hand in it and both demonstrated and grew their engineering prowess by being involved.
- coldtea 9y ago
  So, it sounds like what the US was also actively pursuing (to say the least) for the past century or so, right? Or any other superpower when and where it could afford it, for that matter.
  - adventured 9y ago
    That's obviously incorrect. The US has extremely low tariffs and protectionism against foreign participation in its economy. That includes, particularly, in agriculture, where most of the world has extremely high tariffs by comparison (and the US is the world's largest agricultural exporter, so it tends to suffer more than anyone from those foreign agriculture tariffs). Toyota gets to set up plants in the US, and own its Toyota US subsidiary. Nintendo gets to the do the same thing, owning Nintendo of America. BMW gets to do the same. Bayer is allowed to buy Monsanto; InBev is allowed to buy Anheuser Busch; Roche is allowed to buy Genentech; Novartis gets to buy Alcon; Sanofi gets to buy Genzyme; etc. None of them require forced partners to do so as in China, they can just freely go about their business and retain a 100% ownership position. The US is among the least protectionist major economies and has among the lowest tariffs of any large economy. The exact opposite of what you're claiming is in fact true. Check out the US agriculture tariffs versus the rest of the world: https://i.imgur.com/F7NZXRz.jpg https://i.imgur.com/F7NZXRz.jpg
RobertRoberts 9y ago
A similar thing happened to rubber during WWII when natural rubber resources were compromised. (If anyone is in doubt about the nature of the US relationship with China, consider this news story. [1]) >"When the natural rubber supply from Southeast Asia was cut off at the beginning of World War II, the United States and its allies faced the loss of a strategic material. With U.S. government sponsorship, a consortium of companies involved in rubber research and production united in a unique spirit of technical cooperation and dedication to produce a general purpose synthetic rubber, GR-S (Government Rubber-Styrene), on a commercial scale." [0] It seems that tech companies and the governments of the world just need to either find more resources and control them. Or find new ways to make batteries with different tech/chemistry. (The second option seems the smartest long term, just like rubber tech) [0] https://www.acs.org/content/acs/en/education/whatischemistry/landmarks/syntheticrubber.html https://www.acs.org/content/acs/en/education/whatischemistry... [1] https://www.washingtonexaminer.com/policy/defense-national-security/fcc-wants-chinese-tech-out-of-us-phones-routers https://www.washingtonexaminer.com/policy/defense-national-s... Edit: Years ago a client of mine made software for satellites for an unnamed massive defence contractor. They were control systems for satellites that killed other satellites. He was doing this work in the 90s. Late 90s he said the US's biggest enemy was China.
- mikepurvis 9y ago
  Interesting stuff— there's a small note about it on Wikipedia as well, here: https://en.wikipedia.org/wiki/Styrene-butadiene#History https://en.wikipedia.org/wiki/Styrene-butadiene#History
- coldtea 9y ago
  >Late 90s he said the US's biggest enemy was China. Well, biggest competitor. For enemy it should have also actually done something, and until now it's mostly been western nations doing things to China (https://en.wikipedia.org/wiki/Century_of_humiliation https://en.wikipedia.org/wiki/Century_of_humiliation). Besides, who else would have he said at the late 90s? Russia was a faltering non-entity under Yeltsin, and China was emerging and a billion+ strong.
  - 9y ago
the_trapper 9y ago
I'm afraid we are just beginning to learn how badly we have arrogantly underestimated China.
- robotrout 9y ago
  Thankfully, we are finally seeing how vulnerable we have left ourselves. Just like the best time to plant a tree. The best time to address strategic resource vulnerabilities is 20 years ago. The second best time is now. We've been too complacent for too long, but now this issue has now been pushed into the public conversation.
  - crdoconnor 9y ago
    The resource vulnerabilities are nothing compared to US reliance on China's industrial ecosystem. At this point if the the US and China halted trade, China would lose soybeans and corn (easily replaceable) while half the US manufacturing supply chains would be severed leading to truly eye watering inflation. China will almost certainly threaten to use this leverage in the next 5 years to discipline the US. Which is weird, because this is basically how the US has behaved toward developing nations which didn't follow its dictates.
    - question_that 9y ago
      I've never understood why during my lifetime my government has allowed our economy to come to depend on a communist country which is now effectively a dictatorship.
      - StreamBright 9y ago
        Because your government represent corporate interests much more than it represents you. (See Princeton study for more)
      - mistermann 9y ago
        Me too.....I also don't understand why our club is such a tiny one, while other clubs worrying about comparatively minor risks (scary Russian Hackers!) are so popular.
exabrial 9y ago
We should probably exploit local resources, anyway. Mines in some Asian and third world countries have terrible human rights records.
- RobertRoberts 9y ago
  The US had horrible human rights records in the early 1900s, but this was fixed with prosperity and a population that demanded their government protect them. Rights the US should be helping to motivate other countries to employ, not playing grab-ass with China over property rights and resources.
  - wil421 9y ago
    Comparing something that happened 100 years ago is not an equal comparison. The reason we have changed since the 1900s is because of horrible working conditions. The US also significantly changed in the 1970s in regards to pollution, Ohio river fire[1]. The point is we can’t allow someone to make questionable choices just because we did it 100 years ago. Especially when it’s changing the environment, it’s up to Western companies and China to make a change. [1]https://en.m.wikipedia.org/wiki/Cuyahoga_River https://en.m.wikipedia.org/wiki/Cuyahoga_River
    - RobertRoberts 9y ago
      >...we can’t allow someone to make questionable choices just because we did it 100 years ago. I didn't even remotely suggest that, I said the opposite. That the real solution is to get the countries on their feet so they can run things themselves, be their own people and control their own resources. Then they can control their pollution and human rights. Until a country can stand on it's own two feet, it will be a pawn between global power brokers.
- gfarah 9y ago
  Small nitpick, the usage of the term "third world countries" is a bit outdated. A more recent and nicer term is "developing countries" [1]. [1] https://en.wikipedia.org/wiki/Third_World https://en.wikipedia.org/wiki/Third_World
jseliger 9y ago
The same thing that happened when China "cornered" the rare earth metals market: other mines were opened and a temporary advantage mostly disappeared. The same will happen here. In addition, cobalt can be recycled from existing batteries, but it is currently not economical to do so. When you can trade existing batteries to Best Buy for a couple bucks, you'll know the price of cobalt (or nickel, or lithium) is genuinely high. People interested should read Junkyard Planet: https://www.amazon.co.uk/Junkyard-Planet-Travels-Billion-Dollar-Trash/dp/160819793X https://www.amazon.co.uk/Junkyard-Planet-Travels-Billion-Dol...
- devy 9y ago
  Yep. The author actually summarized it pretty well in the last paragraph: In theory, the best way to ensure sufficient supplies of both nickel and cobalt would be for prices to rise enough to make mining them together more profitable.
  - kazinator 9y ago
    Of course, that works because "sufficient supplies" is defined as "sufficient at price X to those who are willing to pay X" not "sufficient for those who only wanted to pay the original price". The principle works for anything at any price, nearly vacuously. For instance, there are sufficient supplies of Lamborghini automobiles, ensured by the price being high enough that making them is profitable.
    - OrganicMSG 9y ago
      Yep, but it is a useful concept with certain minerals and products. For instance, the vast majority of the cost of producing a lithium battery is the big oven to dry them out before sealing them, the price of the lithium itself is way down the list and could effectively double before it massively affected battery costs. However if the price does double, suddenly lithium is economically available pretty much everywhere.
      - kazinator 9y ago
classicsnoot 9y ago
I have rewritten, in my head, the comment I am about to make 2 or 3 times, and it kept getting more obfuscated by me trying to portray it in a way that gets me an answer and not get my karma obliterated. So I will just go with the blurt method: Was Trump right about China? Additionally, was it a mistake to be so helpful to the Chinese 1970s- now?
- burkaman 9y ago
  Can you be more specific? Trump makes very few consistent concrete statements about anything. Are you asking if his general attitude of "China is our competitor and we should be careful" is correct, or if his strategy of abandoning international trade, organizations, and agreements is the right response?
  - classicsnoot 9y ago
    Both, but the former is what I originally intended. He is so helter skelter in his delivery, but I think he may go down in history as one of the most consistent presidents in terms of campaign promises and in-office actions. I am in no way implying that this is necessarily good or bad.
    - burkaman 9y ago
      Ok, the former is a pretty obvious observation that I doubt anyone disagreed with. One of Trump's media strategies is to constantly hammer home some obvious point without offering any specific solutions, so that other people take the blame if their ideas fail, but he can take credit if something works. So yes, Trump was right about China. I don't think a trade war will help the situation, but if it fails he can just say all his idiot predecessors dug a hole too deep for anyone to get out of. I don't agree that he's being particularly consistent, I think you're just forgetting a lot of his unfulfilled promises because he made so many vague and sometimes contradictory ones. Not sure how up-to-date it is, but try this site for some examples: https://trumptracker.github.io/ https://trumptracker.github.io/ Even a lot of promises from his uncharacteristically specific Contract with the American Voter are unfulfilled: https://assets.donaldjtrump.com/_landings/contract/O-TRU-102316-Contractv02.pdf https://assets.donaldjtrump.com/_landings/contract/O-TRU-102...
ksk 9y ago
Which country doesn't want to corner supply markets? How is this different from if any other country would have done it?
- RobertRoberts 9y ago
  The difference is that other countries don't combine their businesses with their government, thus creating an unholy alliance where the government can manipulate the value of their currency and empower their businesses to out compete on the global markets unfairly.
  - ksk 9y ago
    >The difference is that other countries don't combine their businesses with their government, The US government has export embargoes, and has blocked the foreign purchase of US tech firms, citing "national security". The NSA has used US tech firms to spy on foreign citizens/governments. >where the government can manipulate the value of their currency and empower their businesses to out compete on the global markets unfairly. Every government tries to make exports cheaper. How many billions of dollars has the US treasury printed during quantitative easing? Also, for e.g., the US defense only accepts payment in USD for weapons purchases or defense services (to korea, japan, etc) - in part - helping keep the demand for the USD high. Calling it currency manipulation doesn't make it evil when China does it. Its just a game that all countries play and each tries to brush their own motivations under carpets with different words written on top. To me, while it's not a wash, with every country being "equally bad", its a little hypocritical to see countries adopt a "do as i say, not as I did" policy.
    - mrkstu 9y ago
      What I think is happening is people are identifying machiavellian actions. Chinese actions aren't 'bad' per se- they are self-interested though- and often in a zero-sum context. The US, despite many deplorable actions by its government over the years, consistently also supported good government initiatives, development initiatives, and generally bi-lateral open markets. This has allowed well run countries access to a large export base with minimal barriers- hence the rise of countries like S. Korea, Japan, China, Taiwan and Germany post WWII, all of which could have been foreclosed by the hyperpower of the US if it so wished. China is completely strategic in leveraging its money and industrial base into more military and political power. It has no problem in leveraging corrupt governments like Venezuela to secure more strategic influence, much like the US did during the Cold War, which at least had the goal and virtue of halting the spread of totalitarian Communism. If a nation is going to act completely self-interested, rather than contribute to the greater good and trust that growing the market ensures more for everyone, it then behooves other countries to act in defense of their self interest in return and potentially act in a coordinated manner to constrain that power. The US, despite its errors, delivers value to its partners. S. Korea, Japan, Germany have all directly benefitted from sheltering in the embrace of American military might. And as the Philippines has shown, the US is more than willing to withdraw from any country (other than Cuba, for historic reasons) that wants it gone.
gonvaled 9y ago
What a load of rubbish I see in the comments. The US has been using all the tricks in the book, for decades, to further its economic dominance, including shaping international law in its own interest (copyright & IP law) and other niceties like invading countries, corrupting democracies, supporting dictators, and lying in the security council. All while polluting and laying to waste the planet. And now you are complaining because China is, adhering to international trading agreements, improving the quality of living of their citizens, and winning in some areas? Whiners! What a fitting president you have ... It would be good for you to realize that the planet is not only populated by americans, that other people have the same right as you have to improve their quality of life, and that you do not have any divine entitlement to affluence.
- deft 9y ago
  What do you expect from HN? US economic policy is pillage and plunder, yet the second another nation state does it we're supposed to care? Quite frankly I don't care whose exploiting the planet and robbing from us all. US or China, equally bad. This article and these comments seem to say "It was great when we had control..."
- ggg9990 9y ago
  The thing is that the US could have taken actions starting 25 years ago so that all of the advantage captured by China today would have been captured by us and added even more to our privileges.
- tdb7893 9y ago
  I think most of the issue is that they were let into international trade markets on the assumption that it would be a free market but they have stolen a lot of IP and not been a particularly open or free market in some areas. I hope the international community calls out the US on a lot of toxic practices but doesn't mean we need to ignore the poor Chinese trade practices
  - gonvaled 9y ago
    Have you even, for a fraction of a second, considered what it meant, for example, to invade Irak and kill thousands / millions of civilians, while destabilizing one of the most dangerous areas of the planet? And you are worried that, in a playing field tilted by and towards the US, China has found a way, maybe playing the system, to improve their economic well-being? I for one hope that they keep on finding ways to force the system to "trickle down", as your right-wing capitalists like to describe your dysfunctional one-percenter system. According to you, now is the time to call the unfair Chinese trade practices, and yes, you know, we will even maybe take a look at what the US has been doing for decades, yes maybe we will take a look now, but of course the important thing is to make sure that the Chinese do not play the system to their advantage. Once we make sure, then we can forget about the wrongdoings of the US. After all, the US are the good ones, so who cares if you kill one million here, one million there. It is for the greater good. Rubbish.
dredmorbius 9y ago
There's a fascinating, if little-known term, the "Harbord List". Better known via a successor concept, the Strategic Minerals Reserve, now DLA Strategic Materials. Which serves both military and commercial interests. https://books.google.com/books?id=oy4rAAAAYAAJ&pg=PA10&lpg=PA10&dq="harbord+list"&source=bl&ots=5TOUbFEjd0&sig=LJF0SfMWqgsWv3AbHv5H0x-I658&hl=en&sa=X&ved=2ahUKEwiy7qG3wo3aAhVl9IMKHe0xB0gQ6AEwAXoECAYQAQ#v=onepage&q=%22harbord%20list%22&f=false https://books.google.com/books?id=oy4rAAAAYAAJ&pg=PA10&lpg=P... https://books.google.com/books?id=OqNawWS7iHsC&pg=PA221&lpg=PA221&dq="harbord+list"&source=bl&ots=IUUj3jYWDU&sig=I3m-Oty9HAQEquZCJ9T8uqlR1sE&hl=en&sa=X&ved=2ahUKEwiy7qG3wo3aAhVl9IMKHe0xB0gQ6AEwAHoECAcQAQ#v=onepage&q=%22harbord%20list%22&f=false https://books.google.com/books?id=OqNawWS7iHsC&pg=PA221&lpg=... https://www.globalsecurity.org/military/agency/dod/dnsc.htm https://www.globalsecurity.org/military/agency/dod/dnsc.htm
joshe 9y ago
A 2017 Tesla battery has 4.8 kilograms of cobalt [1]. At $100/kg the Tesla uses $480 worth of cobalt. Two years ago at $25/kg it used $120 worth of cobalt. So $360 or 1.2% more for a $30,000 car. This is important to a some people at Tesla who will try to reduce cobalt usage, to battery recyclers, and to cobalt mine owners. It is only interesting to everyone else (us). This is not China winning or beating the US or anything like that. China has pricey cobalt too. And the best way to minimize the effect of very minor supply disruptions like this is more free trade so that when the price goes up someone opens a mine in Australia and it can be bought there. The historic shortages mentioned in these comments were in the era of protectionism. That is why economists are afraid of Trump's trade war ideas, these little problems will add up and cost the US in higher prices. [1] https://www.bloomberg.com/gadfly/articles/2017-09-28/cobalt-s-chemistry-experiment https://www.bloomberg.com/gadfly/articles/2017-09-28/cobalt-...

94 points by devy 9y ago

When it comes to trade war topic these days, most Western commentators completely miss that a trade war is what China was preparing intensively for the last quarter of a century. They well expected an economic pressure on a scale even bigger than what the West puts on North Korea and banana republics. They totally understood that the West will not play nice with them forever. There is zero questions about China's economic policy being very strategic, and deliberate. Chinese state conglomerates may look to just littering around the world with money, but analyze it more, and you see a pattern, one that is very much like a game of Go - victory by limiting enemy moves. They buy ally countries, strategically - they buy resource supplying countries, often with major holds on markets of vital commodities. Their tech purchases - mostly underappreciated market leaders with industry wide influence. Kuka - the only company you can say to be Tier 1 in robotics, all other competitors combined will not be an equivalent for it. I has almost complete dominance over major heavy industries. Lattice Semi - the one and only FPGA company that can threaten the Xilinx-Altera duopoly. And so on and on and on. Their domestic tech development - even more so. People talk about China dominating consumer goods manufacturing without realisation that it has even bigger hold of manufacturing machinery industry - manufacturing can't really leave China with Chinese made manufacturing equipment being locked down. The whole industry you can call "Manufacturing machinery 2.0" is a domestic Chinese development. Biotech - China quietly ate the market for genetic engineering reagents, as well as much for complex organic chemistry. There are megatons of biotech startups in the West, but they all feel that they will eventually have to move to China to have any chance to scale - effectively they are already a Chinese property. Military allies - well, there things are even more obvious. Major trade agreements - same. Their idea is to bind any major developing market niche to Chinese economy before the West even realizes its emergence. Their idea - to make it so that if somebody wants to do anything any much big being impossible without involving a Chinese company or state institution at some part of the process - to make it "You can't do that without China"

isrsal 9y ago
Can you elaborate?
- ggg9990 9y ago
  China has been developing its manufacturing expertise at the highest levels (they built the Bay Bridge) and their control of industrial resources (they have bought a big percentage of Africa). China is to the rest of the world as Apple is to the rest of the electronics industry.
  - seanmcdirmid 9y ago
    Neither of those claims are completely true: they definitely built some of the bay bridge, but definitely not all of it. They have invested in Africa, but don’t own a big percentage of Africa (if owning a continent was even sensical). China does not have overwhelming positions outside of manufacturing, which is fairly fungible.
    - GauntletWizard 9y ago
      They're rhetorically true, and we're having a rhetorical argument. China didn't build all of the bay bridge, no. They won several large parts of the contracts and subcontracted many more. The exact percentage is meaningless, the important point for argument is that they had a large hand in it and both demonstrated and grew their engineering prowess by being involved.
coldtea 9y ago
So, it sounds like what the US was also actively pursuing (to say the least) for the past century or so, right? Or any other superpower when and where it could afford it, for that matter.
- adventured 9y ago
  That's obviously incorrect. The US has extremely low tariffs and protectionism against foreign participation in its economy. That includes, particularly, in agriculture, where most of the world has extremely high tariffs by comparison (and the US is the world's largest agricultural exporter, so it tends to suffer more than anyone from those foreign agriculture tariffs). Toyota gets to set up plants in the US, and own its Toyota US subsidiary. Nintendo gets to the do the same thing, owning Nintendo of America. BMW gets to do the same. Bayer is allowed to buy Monsanto; InBev is allowed to buy Anheuser Busch; Roche is allowed to buy Genentech; Novartis gets to buy Alcon; Sanofi gets to buy Genzyme; etc. None of them require forced partners to do so as in China, they can just freely go about their business and retain a 100% ownership position. The US is among the least protectionist major economies and has among the lowest tariffs of any large economy. The exact opposite of what you're claiming is in fact true. Check out the US agriculture tariffs versus the rest of the world: https://i.imgur.com/F7NZXRz.jpg https://i.imgur.com/F7NZXRz.jpg

RobertRoberts 9y ago

A similar thing happened to rubber during WWII when natural rubber resources were compromised. (If anyone is in doubt about the nature of the US relationship with China, consider this news story. [1]) >"When the natural rubber supply from Southeast Asia was cut off at the beginning of World War II, the United States and its allies faced the loss of a strategic material. With U.S. government sponsorship, a consortium of companies involved in rubber research and production united in a unique spirit of technical cooperation and dedication to produce a general purpose synthetic rubber, GR-S (Government Rubber-Styrene), on a commercial scale." [0] It seems that tech companies and the governments of the world just need to either find more resources and control them. Or find new ways to make batteries with different tech/chemistry. (The second option seems the smartest long term, just like rubber tech) [0] https://www.acs.org/content/acs/en/education/whatischemistry/landmarks/syntheticrubber.html https://www.acs.org/content/acs/en/education/whatischemistry... [1] https://www.washingtonexaminer.com/policy/defense-national-security/fcc-wants-chinese-tech-out-of-us-phones-routers https://www.washingtonexaminer.com/policy/defense-national-s... Edit: Years ago a client of mine made software for satellites for an unnamed massive defence contractor. They were control systems for satellites that killed other satellites. He was doing this work in the 90s. Late 90s he said the US's biggest enemy was China.

mikepurvis 9y ago
Interesting stuff— there's a small note about it on Wikipedia as well, here: https://en.wikipedia.org/wiki/Styrene-butadiene#History https://en.wikipedia.org/wiki/Styrene-butadiene#History
coldtea 9y ago
>Late 90s he said the US's biggest enemy was China. Well, biggest competitor. For enemy it should have also actually done something, and until now it's mostly been western nations doing things to China (https://en.wikipedia.org/wiki/Century_of_humiliation https://en.wikipedia.org/wiki/Century_of_humiliation). Besides, who else would have he said at the late 90s? Russia was a faltering non-entity under Yeltsin, and China was emerging and a billion+ strong.
- 9y ago

the_trapper 9y ago

I'm afraid we are just beginning to learn how badly we have arrogantly underestimated China.

robotrout 9y ago
Thankfully, we are finally seeing how vulnerable we have left ourselves. Just like the best time to plant a tree. The best time to address strategic resource vulnerabilities is 20 years ago. The second best time is now. We've been too complacent for too long, but now this issue has now been pushed into the public conversation.
- crdoconnor 9y ago
  The resource vulnerabilities are nothing compared to US reliance on China's industrial ecosystem. At this point if the the US and China halted trade, China would lose soybeans and corn (easily replaceable) while half the US manufacturing supply chains would be severed leading to truly eye watering inflation. China will almost certainly threaten to use this leverage in the next 5 years to discipline the US. Which is weird, because this is basically how the US has behaved toward developing nations which didn't follow its dictates.
  - question_that 9y ago
    I've never understood why during my lifetime my government has allowed our economy to come to depend on a communist country which is now effectively a dictatorship.
    - StreamBright 9y ago
      Because your government represent corporate interests much more than it represents you. (See Princeton study for more)
    - mistermann 9y ago
      Me too.....I also don't understand why our club is such a tiny one, while other clubs worrying about comparatively minor risks (scary Russian Hackers!) are so popular.

exabrial 9y ago

We should probably exploit local resources, anyway. Mines in some Asian and third world countries have terrible human rights records.

RobertRoberts 9y ago
The US had horrible human rights records in the early 1900s, but this was fixed with prosperity and a population that demanded their government protect them. Rights the US should be helping to motivate other countries to employ, not playing grab-ass with China over property rights and resources.
- wil421 9y ago
  Comparing something that happened 100 years ago is not an equal comparison. The reason we have changed since the 1900s is because of horrible working conditions. The US also significantly changed in the 1970s in regards to pollution, Ohio river fire[1]. The point is we can’t allow someone to make questionable choices just because we did it 100 years ago. Especially when it’s changing the environment, it’s up to Western companies and China to make a change. [1]https://en.m.wikipedia.org/wiki/Cuyahoga_River https://en.m.wikipedia.org/wiki/Cuyahoga_River
  - RobertRoberts 9y ago
    >...we can’t allow someone to make questionable choices just because we did it 100 years ago. I didn't even remotely suggest that, I said the opposite. That the real solution is to get the countries on their feet so they can run things themselves, be their own people and control their own resources. Then they can control their pollution and human rights. Until a country can stand on it's own two feet, it will be a pawn between global power brokers.
gfarah 9y ago
Small nitpick, the usage of the term "third world countries" is a bit outdated. A more recent and nicer term is "developing countries" [1]. [1] https://en.wikipedia.org/wiki/Third_World https://en.wikipedia.org/wiki/Third_World

jseliger 9y ago

The same thing that happened when China "cornered" the rare earth metals market: other mines were opened and a temporary advantage mostly disappeared. The same will happen here. In addition, cobalt can be recycled from existing batteries, but it is currently not economical to do so. When you can trade existing batteries to Best Buy for a couple bucks, you'll know the price of cobalt (or nickel, or lithium) is genuinely high. People interested should read Junkyard Planet: https://www.amazon.co.uk/Junkyard-Planet-Travels-Billion-Dollar-Trash/dp/160819793X https://www.amazon.co.uk/Junkyard-Planet-Travels-Billion-Dol...

devy 9y ago
Yep. The author actually summarized it pretty well in the last paragraph: In theory, the best way to ensure sufficient supplies of both nickel and cobalt would be for prices to rise enough to make mining them together more profitable.
- kazinator 9y ago
  Of course, that works because "sufficient supplies" is defined as "sufficient at price X to those who are willing to pay X" not "sufficient for those who only wanted to pay the original price". The principle works for anything at any price, nearly vacuously. For instance, there are sufficient supplies of Lamborghini automobiles, ensured by the price being high enough that making them is profitable.
  - OrganicMSG 9y ago
    Yep, but it is a useful concept with certain minerals and products. For instance, the vast majority of the cost of producing a lithium battery is the big oven to dry them out before sealing them, the price of the lithium itself is way down the list and could effectively double before it massively affected battery costs. However if the price does double, suddenly lithium is economically available pretty much everywhere.
    - kazinator 9y ago

classicsnoot 9y ago

I have rewritten, in my head, the comment I am about to make 2 or 3 times, and it kept getting more obfuscated by me trying to portray it in a way that gets me an answer and not get my karma obliterated. So I will just go with the blurt method: Was Trump right about China? Additionally, was it a mistake to be so helpful to the Chinese 1970s- now?

burkaman 9y ago
Can you be more specific? Trump makes very few consistent concrete statements about anything. Are you asking if his general attitude of "China is our competitor and we should be careful" is correct, or if his strategy of abandoning international trade, organizations, and agreements is the right response?
- classicsnoot 9y ago
  Both, but the former is what I originally intended. He is so helter skelter in his delivery, but I think he may go down in history as one of the most consistent presidents in terms of campaign promises and in-office actions. I am in no way implying that this is necessarily good or bad.
  - burkaman 9y ago
    Ok, the former is a pretty obvious observation that I doubt anyone disagreed with. One of Trump's media strategies is to constantly hammer home some obvious point without offering any specific solutions, so that other people take the blame if their ideas fail, but he can take credit if something works. So yes, Trump was right about China. I don't think a trade war will help the situation, but if it fails he can just say all his idiot predecessors dug a hole too deep for anyone to get out of. I don't agree that he's being particularly consistent, I think you're just forgetting a lot of his unfulfilled promises because he made so many vague and sometimes contradictory ones. Not sure how up-to-date it is, but try this site for some examples: https://trumptracker.github.io/ https://trumptracker.github.io/ Even a lot of promises from his uncharacteristically specific Contract with the American Voter are unfulfilled: https://assets.donaldjtrump.com/_landings/contract/O-TRU-102316-Contractv02.pdf https://assets.donaldjtrump.com/_landings/contract/O-TRU-102...

ksk 9y ago

Which country doesn't want to corner supply markets? How is this different from if any other country would have done it?

RobertRoberts 9y ago
The difference is that other countries don't combine their businesses with their government, thus creating an unholy alliance where the government can manipulate the value of their currency and empower their businesses to out compete on the global markets unfairly.
- ksk 9y ago
  >The difference is that other countries don't combine their businesses with their government, The US government has export embargoes, and has blocked the foreign purchase of US tech firms, citing "national security". The NSA has used US tech firms to spy on foreign citizens/governments. >where the government can manipulate the value of their currency and empower their businesses to out compete on the global markets unfairly. Every government tries to make exports cheaper. How many billions of dollars has the US treasury printed during quantitative easing? Also, for e.g., the US defense only accepts payment in USD for weapons purchases or defense services (to korea, japan, etc) - in part - helping keep the demand for the USD high. Calling it currency manipulation doesn't make it evil when China does it. Its just a game that all countries play and each tries to brush their own motivations under carpets with different words written on top. To me, while it's not a wash, with every country being "equally bad", its a little hypocritical to see countries adopt a "do as i say, not as I did" policy.
  - mrkstu 9y ago
    What I think is happening is people are identifying machiavellian actions. Chinese actions aren't 'bad' per se- they are self-interested though- and often in a zero-sum context. The US, despite many deplorable actions by its government over the years, consistently also supported good government initiatives, development initiatives, and generally bi-lateral open markets. This has allowed well run countries access to a large export base with minimal barriers- hence the rise of countries like S. Korea, Japan, China, Taiwan and Germany post WWII, all of which could have been foreclosed by the hyperpower of the US if it so wished. China is completely strategic in leveraging its money and industrial base into more military and political power. It has no problem in leveraging corrupt governments like Venezuela to secure more strategic influence, much like the US did during the Cold War, which at least had the goal and virtue of halting the spread of totalitarian Communism. If a nation is going to act completely self-interested, rather than contribute to the greater good and trust that growing the market ensures more for everyone, it then behooves other countries to act in defense of their self interest in return and potentially act in a coordinated manner to constrain that power. The US, despite its errors, delivers value to its partners. S. Korea, Japan, Germany have all directly benefitted from sheltering in the embrace of American military might. And as the Philippines has shown, the US is more than willing to withdraw from any country (other than Cuba, for historic reasons) that wants it gone.

gonvaled 9y ago

What a load of rubbish I see in the comments. The US has been using all the tricks in the book, for decades, to further its economic dominance, including shaping international law in its own interest (copyright & IP law) and other niceties like invading countries, corrupting democracies, supporting dictators, and lying in the security council. All while polluting and laying to waste the planet. And now you are complaining because China is, adhering to international trading agreements, improving the quality of living of their citizens, and winning in some areas? Whiners! What a fitting president you have ... It would be good for you to realize that the planet is not only populated by americans, that other people have the same right as you have to improve their quality of life, and that you do not have any divine entitlement to affluence.

deft 9y ago
What do you expect from HN? US economic policy is pillage and plunder, yet the second another nation state does it we're supposed to care? Quite frankly I don't care whose exploiting the planet and robbing from us all. US or China, equally bad. This article and these comments seem to say "It was great when we had control..."
ggg9990 9y ago
The thing is that the US could have taken actions starting 25 years ago so that all of the advantage captured by China today would have been captured by us and added even more to our privileges.
tdb7893 9y ago
I think most of the issue is that they were let into international trade markets on the assumption that it would be a free market but they have stolen a lot of IP and not been a particularly open or free market in some areas. I hope the international community calls out the US on a lot of toxic practices but doesn't mean we need to ignore the poor Chinese trade practices
- gonvaled 9y ago
  Have you even, for a fraction of a second, considered what it meant, for example, to invade Irak and kill thousands / millions of civilians, while destabilizing one of the most dangerous areas of the planet? And you are worried that, in a playing field tilted by and towards the US, China has found a way, maybe playing the system, to improve their economic well-being? I for one hope that they keep on finding ways to force the system to "trickle down", as your right-wing capitalists like to describe your dysfunctional one-percenter system. According to you, now is the time to call the unfair Chinese trade practices, and yes, you know, we will even maybe take a look at what the US has been doing for decades, yes maybe we will take a look now, but of course the important thing is to make sure that the Chinese do not play the system to their advantage. Once we make sure, then we can forget about the wrongdoings of the US. After all, the US are the good ones, so who cares if you kill one million here, one million there. It is for the greater good. Rubbish.

dredmorbius 9y ago

There's a fascinating, if little-known term, the "Harbord List". Better known via a successor concept, the Strategic Minerals Reserve, now DLA Strategic Materials. Which serves both military and commercial interests. https://books.google.com/books?id=oy4rAAAAYAAJ&pg=PA10&lpg=PA10&dq="harbord+list"&source=bl&ots=5TOUbFEjd0&sig=LJF0SfMWqgsWv3AbHv5H0x-I658&hl=en&sa=X&ved=2ahUKEwiy7qG3wo3aAhVl9IMKHe0xB0gQ6AEwAXoECAYQAQ#v=onepage&q=%22harbord%20list%22&f=false https://books.google.com/books?id=oy4rAAAAYAAJ&pg=PA10&lpg=P... https://books.google.com/books?id=OqNawWS7iHsC&pg=PA221&lpg=PA221&dq="harbord+list"&source=bl&ots=IUUj3jYWDU&sig=I3m-Oty9HAQEquZCJ9T8uqlR1sE&hl=en&sa=X&ved=2ahUKEwiy7qG3wo3aAhVl9IMKHe0xB0gQ6AEwAHoECAcQAQ#v=onepage&q=%22harbord%20list%22&f=false https://books.google.com/books?id=OqNawWS7iHsC&pg=PA221&lpg=... https://www.globalsecurity.org/military/agency/dod/dnsc.htm https://www.globalsecurity.org/military/agency/dod/dnsc.htm

joshe 9y ago

A 2017 Tesla battery has 4.8 kilograms of cobalt [1]. At $100/kg the Tesla uses $480 worth of cobalt. Two years ago at $25/kg it used $120 worth of cobalt. So $360 or 1.2% more for a $30,000 car. This is important to a some people at Tesla who will try to reduce cobalt usage, to battery recyclers, and to cobalt mine owners. It is only interesting to everyone else (us). This is not China winning or beating the US or anything like that. China has pricey cobalt too. And the best way to minimize the effect of very minor supply disruptions like this is more free trade so that when the price goes up someone opens a mine in Australia and it can be bought there. The historic shortages mentioned in these comments were in the era of protectionism. That is why economists are afraid of Trump's trade war ideas, these little problems will add up and cost the US in higher prices. [1] https://www.bloomberg.com/gadfly/articles/2017-09-28/cobalt-s-chemistry-experiment https://www.bloomberg.com/gadfly/articles/2017-09-28/cobalt-...