Post #263

Tools of Expansion ☕️ To build its neocolonial empire, China is resorting to the same tools that Western countries mastered in the 19th century - control over industrial production to make everyone dependent, dumping and government support for expansion to prevent them from getting rid of this dependence. The case of the Australian company Peak Rare Earths perfectly shows how this works. For more than ten years, it tried to launch the Ngualla rare earths project in Tanzania and build a supply chain without China. Yet China slowly but steadily took control of the entire initiative. How Australians tried to enter the game and failed: 🔸2010: Peak discovers one of the world’s largest rare-earth deposits in Tanzania, but production does not begin due to resistance from the Tanzanian government. 🔸2022: The Chinese, who already controlled most supply chains of rare earths, ramped up production and global prices collapsed. Western private investors panic and sell 20 percent of the project to China’s Shenghe Resources. ➕ The Chinese offered to sign a contract to purchase virtually all future production — an attractive deal amid price volatilityChina itself had created. 🔸2025: Shenghe offers to buy Peak outright at a significant premium to market value — that's all folks! This shows, above all, that China effectively enjoys several systemic advantages over its economic adversaries: ⏩Long planning horizon (Chinese companies buy stakes in rare-earth projects for years on end, regardless of current prices) ⏩ State backing (Chinese investors do not need to spend years proving profitability. They can receive financial and moral support from the Party far more quickly) ⏩Control of both mining and processing (Any new project must cooperate with China simply to have somewhere to sell its production in the early stages.) ⏩ Influence on prices (Virtually at the Party’s instruction, companies can ramp up production and crash prices, forcing competitors to shut down) China essentially operates according to political and ideological priorities rather than market logic. While this may look like an unreliable model, for now it allows Beijing to outmaneuver the West and build its own neo-colonial empire. Devils Below