China’s rare earth hold – ‘oil shock’ of the 21st century?

“THE Middle East has oil. China has rare earth metals.” So said Deng Xiaoping, the architect of China’s post-Maoist opening and rise, in the 1980s, with remarkable foresight and precision. The rest of the world is only now grasping the implications of his insight for geopolitics in the 21st century.

The natural resource that shaped world politics in the long 20th century – which, for these purposes, started in the late 19th and hasn’t quite ended yet – has been oil. When the Japanese attacked Pearl Harbour, they were – at least as they saw it – reacting to a Western oil embargo on them. When Adolf Hitler sent the Wehrmacht to Stalingrad, he was eyeing the black gold of the Caucasus. When the Americans started holding hands with the House of Saud, they were after the crude of Arabia and the wider Middle East. Oil shocks, Iraq wars and any number of other events have kept reminding the world that much of its economic, diplomatic and political superstructure has been based on the substructure of this hydrocarbon.

World leaders who – in contrast to Deng – look backwards in time have tended to draw the wrong conclusions from this history. Russian President Vladimir Putin has built his own rise during the 21st century on the assumption that he could turn Russia from a petrostate into a superpower that’s simultaneously his personal fief. For decades he laid pipelines for Russian oil and gas with the intention of making countries from Ukraine to Germany dependent on these flows, and thus subject to his geopolitical blackmail. A year into his attack on Ukraine, it appears that he miscalculated.