An article in The Economist XXXXXXXXXXdiscussed the growing value of rare-earth elements. Over the summer of 2010 prices for cerium (used in manufacturing glass), lanthanum (an input to petrol...

An article in The Economist (2010) discussed the growing value of rare-earth elements. Over the summer of 2010 prices for cerium (used in manufacturing glass), lanthanum (an input to petrol refining) and yttrium (necessary to make a flat-screen TV monitor) sky-rocketed. This increase in prices was attributed to China, which accounts for about 50 per cent of the world’s production of rareearth elements, reducing its exports over the same period by 40 per cent. The article notes that by controlling the supply of rare-earth elements China is also able to control their processing and use in finished goods such as flat-screen TV monitors. How could China restricting supplies of rare earths for export be seen as a way of creating market power in the supply of finished goods which use rare earths as inputs?