China Is The Most Free Market Economy On The Planet

For a given meaning of "free market" of course

For a couple of decades now I’ve been insisting that China is the most free market economy on the planet. In some senses of course this is laughably untrue. In others, or in at least one, remarkably close to the bone:

So a *European* startup called IB2 announced *in the US* the invention of an amazing new technology to upgrade low-grade bauxite - previously discarded as waste - into high-grade, which makes it usable to make aluminum and extract critical minerals like gallium, lithium, and rare earths in the process.

In the current context you’d think either Europe or the US would be all over it, right? Wrong.

Somehow the first facility that startup ended up building is in Shanxi, China - built in 10 months flat (which, as you can guess, is almost impossibly fast).

How? Why? Speed and efficiency. According to the founder and CEO of IB2, Romain Girbal, they received “massive support” from the Shanxi government and were able to move at insane speed. As he puts it: “You could never go that quick anywhere else in the world – only in China. It is unique.”

And, no, not really. What happens in China is that all the bureaucracy required - planning, environmental etc - gets on with it. This means you can go from idea to producing in about the time it takes a European company to get the environmental report filled out. Not approved note, filled out. Yes, I have been through this up close and personal.

The result of this is that it’s possible to do stuff fast - which leads to the much earlier arrival of competition and thus a free market economy in that sense.

This is also why economic growth there is fast. For economic growth is people doing new things, old things in new ways or simply more of those old. All of which requires that things be built to get them done - the slower you can build because of bureaucracy then the slower growth will be.

As to the specific thing:

IB2 is the only industrial-scale technology that makes low-grade bauxite economically and environmentally viable.

By unlocking resources previously considered uneconomic, IB2 strengthens sovereignty, extends the life of existing assets, and addresses the alumina industry’s most pressing ESG challenges.

That’s, sorta, interesting. You feed bauxite into a Bayer Process plant to get alumina. One of the limitations on bauxite good enough to feed into a Bayer Process plant is the silica content. Remove that first, bad bauxite becomes good, that’s the system here.

Recovery of concentrates of Gallium, Niobium, Vanadium and Lithium through our process

And that’s fun. Everyone knows that the output from a Bayer Process plant - red mud - can be processed to produce all sorts of rare metals. I spent €30k of my own money on checking whether it was possible to get scandium this way. Yes, but it’s expensive so, Boo Hoo, eh? Both Rio Tinto and Rusal are using something like the method I tested (no, no royalties, sadly) to extract Sc from red mud right now, this two decades later.

And if you can extract Sc then you can get rare earths too and so if someone came up with an economic method of processing red mud we’d wholly and entirely solve that problem too.

Here they’re upgrading the bauxite at the other end, before the Bayer Process plant. Which, to be honest, sounds odd to me. Because a lack of decent bauxite isn’t a problem humanity’s going to face for many tens of thousands of years. But, you know.

But that headline does stand. China’s the most free market - in the viciously competitive meaning - economy on the planet right now. Simply because it is possible to build to production a large plant like this in 10 months. That is, for any incumbent the competition with the new and different method can arrive much faster in China than elsewhere - a free market in that competition sense.