China has long used access to its giant customer base and cheap labour as bargaining chips to persuade foreign companies to open factories within its borders. Now, corporate executives say, it is using its near monopoly on certain minerals - in particular, rare earths - to make it difficult for foreign manufacturers of high-tech materials to build or expand factories anywhere except China. Companies that continue making their products outside the country must contend with tighter supplies and much higher prices for the materials because of steep taxes and other export controls imposed by China over the last 2 years. This article takes a look at some companies, such as Showa Denko and Santoku of Japan and Intermix of the USA, who have set up factories in China, instead of elsewhere, because they need access to these scarce metals.
