Sail across the sea

Chapter 477 requires some preparation in advance.
In the conference room of Yttrium Corporation, the executives focused their attention once again, listening to Kenji Ono's report.

"We received an official letter from the China National Minerals Import & Export Corporation, requesting us to declare our current rare earth inventory," Kenji Ono said, placing a fax on the table.

"Baka!" Hisao Nishida cursed in Japanese, asking, "What right do they have to make such a demand? What business is it of theirs how much inventory we have?"

"The reason lies in an article in this magazine."

Kenji Ono pulled out a Chinese magazine again. This time, he didn't pass it around for everyone to read, because most of the executives present couldn't understand Chinese. He turned to the article about Tokyo Bay and rare earth elements, and based on the annotations made by his subordinates, he briefly explained the content of the article to everyone.

"Why sink rare earth elements in Tokyo Bay?" Kazumasa Katayama looked bewildered. "Even if it's 1000 tons of rare earth elements, that's only 500 cubic meters. A small warehouse could easily hold it. Why sink it into the sea?"

"Perhaps it's to avoid oxidation, the temperature on the seabed is relatively low," a wise man guessed.

What happens when yttrium oxide is further oxidized?

Yttrium trioxide?

"Which company did this stupid thing? Why don't we know anything about it?"

"Don't know +1".

"I don't know +2..."

"I think the article is somewhat untrue. Just now, Ono-kun said that the article claims that Japanese companies have more rare earth reserves than the world's proven reserves. How is that possible?"

"Perhaps it was written incorrectly, maybe it's..."

"This article isn't entirely made up, is it...?"

Seeing that everyone was gradually discovering the truth, Kenji Ono coughed lightly and said, "Over the past period of time, dozens of newspapers or similar magazines in China have published articles of this kind. According to our marketing department's analysis, these articles should have been fabricated by an organization with ulterior motives."

"What's the purpose?" Kazumasa Katayama asked.

"That's the point." Kenji Ono pointed to the fax on the table. "We had already contacted some Chinese scholars beforehand and asked them to make statements criticizing China's rare earth resource tax."

"But after this article was published, public opinion in China changed 180 degrees. Almost all media outlets and scholars began to criticize the government's behavior of selling resources at low prices, and those scholars who were friendly with us said that it was inconvenient for them to speak out."

“This is definitely a conspiracy by the Chinese government; they want to use this method to legitimize the resource tax,” said Hisao Nishida.

“I think their intentions go beyond just maintaining the resource tax,” another executive commented.

Hisao Nishida asked, "What do you think their intentions are?"

“It’s stricter export restrictions,” the other party said.

“That’s true,” Kenji Ono said. “The Chinese side informed us that, given the dissatisfaction of the Chinese public regarding the large-scale stockpiling of Chinese resources by Japanese companies, in order to explain to the public, they need to know the actual inventory data of each Japanese rare earth company and their order situation within the past year.”

"They will issue rare earth import quota licenses based on our inventory and orders, and import requests that exceed actual demand will be rejected."

"They've gone mad! Don't they really want to make a deal with us anymore?" Kazumasa Katayama exclaimed.

"This is outrageous!" "Yes, we absolutely will not allow it!"

The executives were in high spirits, wishing they could immediately find a blood-stained white cloth and tie it around their heads.

"The Chinese said they were also in a difficult position and hoped we could understand their predicament," Kenji Ono continued, explaining the situation with a helpless expression.

"Absolutely not!" everyone shouted in unison.

“If that’s the case, they will suspend their rare earth exports to us,” Kenji Ono said.

“What reason do they have to do this!” Kazumasa Katayama exclaimed angrily. “We can file a complaint against them with the GATT.”

Hisao Nishida paused for a moment, then said, “China is not a signatory to GATT, so GATT can’t control them. Most importantly, their reasons are at least superficially plausible. If they accuse us of hoarding resources and use that as a reason to temporarily suspend resource exports to us, it would be reasonable.”

"But they have no evidence that we have hoarded resources."

Have we stockpiled any?

"Can a mere 400 tons be considered hoarding?"

“How do they know we only have 400 tons in stock? They could say 4000 tons, which is far more than our daily consumption.”

"..."

Kazumasa Katayama was speechless. To prove he hadn't maliciously hoarded goods, he had to disclose the true inventory level, which was precisely what the Chinese side was demanding. How could he object?
As for the number of orders for the next year, the same logic applies. If you want to import 1000 tons of rare earth, you must explain where those 1000 tons of rare earth will be used; otherwise, I have reason to believe that you intend to stockpile them.

It's normal for companies to stockpile some raw materials. Whether I use your goods or hoard them is none of your business. Isn't it enough that we settle the payment and delivery?

But now, people say public opinion is overwhelming and the pressure is too great. Japanese companies have a history of dumping rare earth elements into Tokyo Bay, so they want to know your true inventory situation, and they really can justify themselves no matter where they go.

Hoarding resources and refusing to sell them violates the spirit of free trade and will be condemned by everyone.

Nowadays, Chinese people don't restrict the sale of goods; they only sell them based on your actual usage. What can you criticize them for?

“As a result, our production will inevitably be affected,” Kazumasa Katayama said. “If we don’t have enough inventory, we won’t be able to guarantee timely delivery of products in the event of a sudden demand. At that time, customers will look for manufacturers that can supply products in a timely manner. And that manufacturer is a Chinese company.”

“That’s their real goal,” Hisao Nishida said. “We threatened to reduce imports, but they not only didn’t care, they actually wanted to reduce exports to us so they could monopolize the rare earth refining market.”

"Who taught the Chinese the technology of rare earth refining? This is a shameful act of treason!" one executive couldn't help but curse.

Kazumasa Katayama glanced at the other man and said coldly, "The Chinese developed their own rare earth refining technology, and they have more experience in this area than any Japanese company combined. Before, they just hadn't realized they needed to refine rare earths for sale, but now they have."

"We possess top-notch technology and also monopolize the supply of rare earth ore, putting us in a very passive position," Hisao Nishida said heavily.

"Perhaps the company needs to make some preparations in advance so that it can make timely adjustments if unfavorable situations arise in the rare earth market," someone suggested.

(End of this chapter)