China seems to be at the heart of most dramatic global economic storylines in 2010. Whether the country is being accused of sucking away American labor via outsourcing, keeping its currency artificially low, raising interest rates or fighting a real estate bubble, China's new role as the world's second-largest economy has definitely put it center-stage.
In certain sectors – like rare-earth metals – the country wields an unusual amount of power. China controls 90 percent of the production of critical commodities like lanthanum, neodymium and cerium, which are employed in everything from laptops to wind turbines.
Last month, it cut shipments of the metals to Japan – a major technology builder – after a dispute about a collision at sea near contested islands in the East China Sea.
Both countries claim the islands, and when a fishing trawler hit a pair of Coast Guard vessels, Japan held the captain of the boat in custody.
China reportedly responded by shutting down export permits for rare-earth minerals to Japan. China has disputed Japan's claims.
"Companies I've talked to say there's no ban on rare-earth exports, however materials are still being held up in customs and shipments are delayed," said Jeff Green, the president of a firm that represents rare-earth miners and end-users, told Bloomberg. "Many believe rare-earth quotas for the second half of 2010 are exhausted, leaving materials unavailable for sale."
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