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Analysis

Japan/India: Trying to Get Around China on Rare Earths
2005 photo of a mine in southern China. (AP photo)
November 2, 2011
| Economics
| Asia and the Pacific
Summary
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To address China’s huge monopoly over the production of rare earth elements crucial to modern electronics, Tokyo and New Delhi agreed on October 26 to increase joint development of these elements. This likely was in response to a recent announcement by China that it would reduce exports to the United States, Japan, and Europe for one month in order to artificially inflate prices.

China has a commanding monopoly over the supply of rare earth elements, comprised of about seventeen chemicals critical to the defense, aerospace, electronics, and construction industries. The Japanese and Indian economies receive close to a quarter of their GDP from these industries. Japan currently imports 90 percent of its rare earth elements from China, which amounts to 65 percent of total exports from Beijing.

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