China restricts exports of rare earth metals

Reports today that China "will slash exports of rare earth metals by about 35 per cent for the first six months of 2011".  As the rfi website reports, that is worrying news for manufacturers in many key industries:

China produces more than 95 per cent of the metals used in the manufacture of iPods, flat-screen televisions, low-emission cars and wind turbines.

And if you want a microcosm of some of the key economic ( and therefore, in many cases, also procurement) issues for 2011, there you have it in a few lines;

  • Further emergence of China as an economic and (maybe not in 2011) military global superpower
  • Shortages of key raw materials
  • International tension over trade flows and balances
  • Potential for inflation driven by these factors
  • Focus on establishing global leadership in new manufacturing sectors (e.g. 'green' or sustainable products)

I'm not going to go on about 'supply chain risk' yet again here.  Let's just say, plan ahead.  And maybe think about buying a few Krugerrands...

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