ChinaWatch: Sources of Power

Welcome to ChinaWatch, WMB’s digest of news from the country with the world’s second largest economy and our chief rival to global dominance. Our aim is to keep you informed.


IPhones At Risk?

The key to hundreds of modern technologies, from iPhones to smart-bombs, lies in little-known rare earth metals, 95 percent of which are mined by China (picture below shows mining camp).

The nation's decision to slash exports has left the West scrabbling for alternative supplies.

Some 17 rare earth metals are the magic ingredient in almost everything that makes modern life possible.


They may have exotic-sounding names such as terbium, europium, dysprosium and lutetium, but they also have decidedly everyday applications; from BlackBerrys and iPhones to catalytic converters and low-energy light bulbs.

Known in China as "industrial vitamins," rare earths are an essential component in green technologies such as electric cars, solar panels and wind-turbines.

Rare earths are not only essential for civilian life; the world's hi-tech armies also need rare earths for a host of applications from toughening tank armor to guiding smart-bombs and powering night-vision goggles.

Given their global application, it may come as a surprise to know that 95 percent of world rare earths production is controlled by a single country – China.

Last year, China's ministry of commerce announced drastic cuts in the amount of rare earths it would make available for export.

Quotas were cut by more than 70 percent for the second half of 2010 to only 8,000 tons, compared with 29,000 tons for the same period the previous year, at a time when global demand for rare earth elements was picking up fast.

Analysts say quotas are expected to shrink again, this year by 11 percent. Rare earths demand has tripled in the past decade to an estimated 136,000 tons this year. By 2014, some analysts are now predicting a 20,000-ton shortfall in key metals.

More Than Air

Despite surpassing U.S. installed wind capacity in 2010, one third of China’s installed wind capacity is not connected to the grid.



China’s National Energy Administration claims it will prioritize connectivity over renewables growth in its upcoming five-year plan.

The NEA has made public its focus on strategic wind energy growth through more hands-on energy policy and management on the national level.

The key areas of connectivity, project approval, and balancing present vs. new investors will take center stage over the next five years of Chinese wind development, according to the NEA.

Although this is a China-specific renewables issue, the world at large will be severely affected by the decision and policy that takes place over the next five years regarding China’s cleantech industry.

In 2009, the World Resources Institute found that 70% of all of China’s energy came from coal, which is a huge contributor to climate change.

When the Kyoto Protocol was signed and ratified in China in 2002, the country was classified as "developing" and it did not have to adhere to the greenhouse gas reduction criteria.

Since China has overtaken America in emissions in recent years and is projected to grow enormously over the next five years, its energy mix of greenhouse gas contributors and renewables is crucial to the world’s development.

China has promised a 40-45 percent reduction in energy intensity by 2020, based on 2005 levels.

Yet there is strong criticism over whether this is attainable given China’s growth rates and continued dependence on coal.

ChinaWatch