US says China must clarify rare earth exports

[October 28, 2010]  HONOLULU (AP) -- Secretary of State Hillary Rodham Clinton on Wednesday called on China to clarify its policy on the export of exotic metals key to the global high-tech industry.

Opening a two-week Asia-Pacific tour aimed at cementing ties with allies who are wary of Beijing's increasing assertiveness, Clinton took on a primary point of friction between China and Japan.

She said recent Chinese restrictions on the sale of rare earth minerals served as a "wake-up call" for the industrialized world, including the United States and Europe, which has largely abandoned their production in favor of cheaper exports from China.

"I would welcome any clarification of their policy and hope that it means trade and commerce around these important materials will continue unabated and without any interference," she said at a news conference after meeting with Japanese Foreign Minister Seiji Maehara in Honolulu.

Clinton and Maehara both said China's stifling of the supply meant the international community would have to look for other sources of rare earths that are essential to producing high-tech devices such as cell phones, missiles and solar energy panels.

China produces 97 percent of the world's supply, something Maehara said "was not appropriate." Even if the current situation is resolved, he said it was critical to diversify the production of rare earths.

"This served as a wake-up call (about) being so dependent on only one source," Clinton said, calling rare earths both "commercially and strategically" essential. "The entire world has to seek additional supplies in order to protect the important production needs that these materials serve."

Japan has been urging China to resume exports of rare earths. Japanese companies say Beijing has blocked shipments since Sept. 21, in possible retaliation for Tokyo's arrest of a Chinese fishing boat captain near disputed islands in the East China Sea.

Many see China's action as indicative of its growing aggressiveness in dealing with such disputes. Some nations are seeking reassurance from the U.S., the traditional dominant power in the Pacific Rim, that it will remain a major player.

Clinton vowed that the United States remains committed to regional stability and the security of allies like Japan. She is to meet Saturday on China's Hainan Island with Chinese State Councilor Dai Bingguo and said she intended to raise the rare earths issue, among other matters of concern.

She said a satisfactory Chinese clarification of its position on mineral exports "may shorten that discussion, but there is a lot to talk about," particularly to prepare for a state visit to the U.S. by Chinese President Hu Jintao in January.

Clinton's trip to Hainan -- a last-minute addition to the itinerary -- is loaded with symbolism for the Chinese.

The island is a powerful reminder of Chinese military might, hosting an array of intelligence and espionage facilities of the People's Liberation Army. It was where an American spy plane was forced to land in 2001 after it collided with a Chinese fighter jet. The 24 crew members were held for 11 days until the Bush administration apologized.

Clinton will also visit Vietnam, Cambodia, Malaysia, Papua New Guinea, New Zealand and Australia.

At all stops, she said she would focus on strategic planning to counter existing threats from North Korea and other "contingencies," an apparent reference to possible Chinese muscle-flexing.

"We need to be looking at all kinds of scenarios, all kinds of contingencies, work though responses to events that might occur in the future and, of course, stay focused on the threat posed by North Korea," she said.

Before leaving Hawaii for Vietnam on Thursday, Clinton is to give a speech in which she is expected to underscore the importance the Obama administration places on the Asia-Pacific region.

[Associated Press; By MATTHEW LEE]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.