Hybrid cars, mobile phones, flat-screen televisions, fiber-optic cables, the latest-generation wind turbines. What do these products all have in common?
For many countries, they represent the money-making future of manufacturing as the world turns green and high-tech.
But more importantly, you can't manufacture a wind turbine or a hybrid car without rare-earth elements. And that's something China, which controls 97 percent of the world's current supply, knows only too well.
Despite their name, the 17 rare-earth elements -- with exotic-sounding names like gadolinium, thulium and cerium -- are not that rare. But very few countries -- except for China -- currently mine them intensively, which means Beijing has a lock on the market.
In the past year, China's exports of rare earths have declined by some 40 percent.
And concerns about Chinese control over the crucial minerals intensified this week as Western media reported that China was now blocking shipments of those materials to industrialized countries.
"The New York Times" this week reported that China had halted shipments of the metals to the United States and Europe, following a similar move against Japan.Adding Value
For some experts Beijing's motives are quite clear: China wants to keep rare earths for itself and force foreign companies to produce more high-technology products in the country.
China wants more high-tech industry based in the country, rather than to export raw materials.
"What is happening is if foreign countries can't get hold of the raw materials, then they are forced to move high-tech manufacturing to China," says Mark Watts, online news editor at the website of the London-based "Industrial Minerals" magazine.
"And then the Chinese economy would benefit from that because they make more money out of these value-added products than they would from just selling raw materials to Japan and Europe."
Among the industrial powers for which rare-earth metals are of pivotal importance, Germany has made the loudest protests about China's actions.
German industry and government leaders plan to hold a conference on the issue next week in Berlin with the secretary-general of the World Trade Organization (WTO), Pascal Lamy.
Representatives of German companies were quoted as saying they were being pressed by Chinese officials to increase their investments in China if they wanted to be assured of access to rare-earth minerals.
Berlin also said it would raise the matter at a summit of the Group of Eight and Group of 20 leading developed and developing countries in South Korea next month.Lack Of Supplies
The European Commission and U.S. trade officials said they were looking into the reports, which emerged after the U.S. government announced last week it was investigating whether China is violating WTO rules by subsidizing its clean-energy industries.
In an e-mail to "The New York Times" this week, a spokesman for the Chinese Embassy in Washington assured that China was not imposing an embargo or trying to use rare earths as a bargaining chip.
Meanwhile, the Chinese Commerce Ministry denied a Chinese media report that the government planned to slash export quotas next year by up to 30 percent, pledging that the country would "continue to supply rare earths to the world."
But the ministry also reserved the right to "continue imposing restrictions on the "exploitation, production, and exports" of rare earths to protect "exhaustible resources and sustainable development."
China says its reserves might run dry within 15-20 years if the current rate of production is maintained.
Watts says potential decreases in export quotas are troubling. "If Chinese exports remain the same next year as they did this year, then demand from the world outside China will exceed supply coming from China," he says. "And when you take into account that 97 percent of rare earths come from China, then inevitably that will lead to supply shortages."
According to the Japanese government, the country's stockpile of rare-earth minerals could dry up by next March or April without fresh shipments from China.
Although other countries have untapped rare-earth reserves, most of the extraction industry has moved to China because of lower costs and weak environmental enforcement. Finding New Sources
With global use of rare earths growing, the row over the materials has led to calls in major economies to diversify away from China.
"The Japanese government and Japanese companies, the large trading houses, and trying to form joint ventures with companies developing mines overseas to try and get alternative supplies as soon as possible," Watts says. "And the Unites States Congress is considering legislation to fund new rare-earth mines."
German Chancellor Angela Merkel last week said it was "urgently necessary" to step up European investment in Eastern Europe and Central Asia in order to prevent China from expanding its dominance in raw materials, including rare earths.
Companies are responsible for acquiring their own sources for minerals. But the German government this week vowed to back the country's firms up with foreign-policy measures, including "building up partnerships with selected countries."
It said Germany and Japan wanted to work together to stimulate production in countries with rare-earth resources. Berlin reportedly intends to target rare-earth resources in Russia, Ukraine, and Kazakhstan.
Japan, to which more than half of China's rare-earth shipments go, says it expects to agree later this month on a deal to mine in Vietnam for rare-earth metals.
The Japanese government has also turned its attention to the recycling of electrical equipment for precious and rare metals.
Yoshiko Yamamoto, a researcher at Re-Tem Corporation in Tokyo, told Reuters that the company was researching how to efficiently extract and recycle rare earths.
"Recycling technology, including the intermediary process, is still underdeveloped and not yet well established as an industry," Yamamoto said. "I think the number of researchers will start to increase from now on and when that happens, we will see an advancement in technology, and that in return will jump-start the recycling industry. I think this industry is a growing field."
Alternative sources of rare earths may be able to provide enough supplies in the future, but experts say new processes take time to perfect, with the most advanced project, in Australia, due to start up in the third quarter of 2011.