BEIJING – China reportedly has halted the shipment of rare earth minerals to the U.S., in the latest sign of heightened economic tensions between the two super powers.

The rare earth minerals ban, first reported by the New York Times citing anonymous industry sources Tuesday, rattled investors and politicians who fear the Chinese are using their dominance the industry as a form of economic warfare.

Rare earth minerals are used in a wide variety of commercial and military applications ranging from precision guided smart bombs to efficient light bulbs to clean energy technology. It is said that over 50 pounds of rare earth metal can be found in a Toyota Prius automobile alone.

And China now controls an estimated 95 percent of the world’s supply of the precious raw materials.

Beijing quickly denied the reports that it halted exports Wednesday.

"Reports in certain media that China will continue reducing rare earth export quotas next year are entirely groundless and this is purely a mistaken report," China’s commerce ministry said in a statement, Reuters reported.

"China will keep supplying rare earths to the world, but will also continue imposing restrictions on the exploitation, production and exports of rare earths to protect these depletable resources," said the statement, adding that any limits would abide by global trade rules.

Dangerous monopoly
Whether or not the ban on exports to the U.S. is true, the fact that China could use its dominance of the world’s supply of the raw materials to project its power has raised alarm bells.

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At one time, the United States was self-sufficient in its extraction and manufacturing of rare earth metals, but ceded much of that production to China during the 1990s.

A recent study by the U.S. Government Accountability Office confirmed the shift to Chinese dominance of the industry in chilling terms. “The United States previously performed all stages of the rare earth material supply chain, but now most rare earth materials processing is performed in China, giving it a dominant position that could affect worldwide supply and prices,” the GAO report read.

There are fears that China is now beginning to use their dominance of the industry as a blunt diplomatic instrument.

Just last month, Japan was slapped with a similar rare earth ban after the high-profile detainment of a Chinese fishing boat captain.

China has denied that it banned shipments of rare earth minerals to Japan. But it seems a de facto ban is in place since China has subjected rare earth shipments destined to Japan to a battery of pre-shipment checks that has grinded shipments to a halt at Chinese customs offices.

Paul Krugman, the New York Times op-ed columnist, called attention to the incident with Japan earlier this week, writing that he found the incident “deeply disturbing” for what it says about both the U.S. and China.

“On one side, the affair highlights the fecklessness of U.S. policy makers, who did nothing while an unreliable regime acquired a stranglehold on key materials. On the other side, the incident shows a Chinese government that is dangerously trigger-happy, willing to wage economic warfare on the slightest provocation.”

He wrote that China’s control of the industry has resulted in “a monopoly position exceeding the wildest dreams of Middle Eastern oil-fueled tyrants.”

Trade war?
The alleged export ban appears to be just the latest salvo in an escalating trade war between the U.S. and China.

Chinese custom officials reportedly began imposing restrictions on the export of the minerals on Monday morning, just hours after Zhang Guobao, a senior Chinese economic official, declared the U.S. “cannot win this trade fight,” during an unusual news conference on Sunday.

Zhang, vice chairman of China’s National Development and Reform Commission, was chastising the U.S. for an announcement that the United States Trade Representative’s office would investigate whether or not Chinese subsidies of manufacturers of green technology such as wind turbines, solar energy products and fuel-efficient vehicles is in violation of international trade rules. The dispute could escalate to the U.S. filing formal charges against China with the WTO.

Though the rare earth minerals ban and Zhang’s statement cannot be definitively linked, the announcement follows a pattern where China has used economic means to punish nations that have pursued policies deemed anti-Chinese by Beijing.

BEIJING – As China continues to flex its economic muscles, there are rumblings that it could begin to encroach on an all-American commodity: the Hollywood blockbuster.

China’s ability to exert control over major industries has raised alarm bells recently. China allegedly banned the export of rare earth minerals to Japan over a recent diplomatic spate, raising fears in Washington that their dominance of the industry could affect America’s ability to build computers and weapons. And a group of state-back Chinese companies’ effort to take over a major fertilizer producer, which could affect world food supplies, has also gotten American lawmakers talking.

Could American movies be next?

Raymond Zhou, an editorialist for China Daily, China’s English language newspaper, predicted in an August editorial that it may be sooner rather than later that China’s movie box office sales surpass those of the U.S. He also suggested that it’s conceivable we may see a major Hollywood studio owned and controlled by Chinese investors soon.

It is easy to see why the always image-conscious Chinese government would support a Chinese company taking over a U.S. studio. China has long admired the power of Hollywood to project American soft power and shape international perceptions of the United States.

A major Hollywood studio could help China burnish its standing internationally and combat what it views as the West’s framing of the global dialogue with Western principles and morals.

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Growing numbers
In fact, many believe that China holds the keys to Hollywood’s long term prosperity. A quick glance at the numbers explains why.

In 2009, the U.S. recorded $10 billion in total receipts and China reported $900 million. China’s sales are still modest when stacked against those of the U.S., but compared to just a few years ago, they’ve grown considerably. In 2004, China’s sales represented just about $200 million.

That’s a big jump – especially considering that China currently only has an estimated 5,000 screens for its population of over 1.3 billion. Compare that to the 40,000 screens for the U.S. population of 300 million.

The Chinese government has done its part to grow movie audiences in China by heavily investing in its domestic television and media industries.

They have promoted the local film industry through easy loans and the rapid expansion of movie theaters throughout China’s cities. Reportedly two new movie theaters open up in China every day, with an estimated 35,000 theaters planned to open in the next five years. The Chinese government has also stepping up its effort to combat widespread film piracy – at least for domestically made movies. The government announced last week that they will begin charging Internet cafes, long-distance buses and other distributors for showing Chinese movies, beginning next year.

Seeing ticket stubs beyond U.S. shores
China and other foreign markets are already increasingly responsible for a larger part of a movie’s profit pie – foreign tickets add up to nearly 68 percent of all box office sales. Knowing that, it should come as no surprise that Hollywood studios are increasingly commissioning films that cater to a more international audience and have potential to score high box office sales abroad.

This summer’s “The Karate Kid,” starring Jaden Smith and Jackie Chan might be the best example of a film that was clearly made to entertain audiences of different nationality – and it worked. International ticket sales actually surpassed U.S. sales. The film grossed $176 million domestically – but grossed $181 in international ticket sales, according to data on Boxofficemojo.com.

And product placement in movies has increasingly shown Chinese sensibilities. In “Iron Man II” actress Scarlett Johansson was clothed head to toe in a popular Chinese clothing brand in one scene. The man responsible for that costume selection, Ben Ji of Angel Wings Entertainment, dreams that one day a James Bond film will feature a Chinese made car.

A Chinese studio in Hollywood?
With China growing as a bigger stakeholder in the moviemaking industry, men like Zhou have speculated that it is an eventuality that China will one day own or invest in a Hollywood studio.

But given the current anti-Chinese business mood in the west, it would seem unlikely that such a sale would happen in the near future and not without significant blowback from major Hollywood players.

However, such a sale would not be unprecedented. The 1989 sale of Columbia Pictures for $3.4 billion to Sony shows that American businesses are willing to entertain foreign offers for traditional Hollywood institutions.

We’ll have to see how this story ends…

By NBC News’ Eric Baculinao and Bo Gu

BEIJING – The news that jailed Chinese dissident Liu Xiaobo had been awarded the Nobel Peace Prize created a lot of excitement among the foreign media here.

One of their first ports of call Friday was a housing compound in a back alley near China’s Ministry of National Defense in the western part of Beijing, hoping to see and hear from his wife, Liu Xia.

But after a couple of hours of waiting – and some scuffles with Chinese security personnel – it dawned on the crowd that there would be no appearance by Liu Xia. “No, she cannot come out,” said, Liu Xiaoquan, Liu Xiabo’s younger brother, a hint that authorities were taking preventive measures.

Which, indeed, they did. After several hours of a semi-standoff, Liu Xia was taken from her home by plainclothes police officers.

“They are forcing me to leave Beijing," she told Reuters during a phone interview as plainclothes police waited for her outside.

Preventive measure also were being taken by the government-controlled media.

China Central TV’s 7 p.m. national newscast reported on Prime Minister Wen Jiabao’s trip to Europe, the status of China’s eleventh iteration of the “Five-Year-Plan” for the economy (the first version began after the revolution in 1949) and the successful artificial insemination of a panda that lead to the birth of two panda cubs in Spain – but not a word on Liu Xiaobo was mentioned.

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Actually, up until Friday, many Chinese people had never even heard Liu Xiaobo’s name before – because his political writings are considered to be subversive by the government, his name has long been censored from the media.

Soon after the Nobel announcement, major Chinese Web portals like Sina, Netease and Sohu all redirected their previous special reports on this week’s Nobel prizes to their homepages or simply displayed a message saying “deleted.” And reports on the Peruvian writer Vargas Llosa winning the Nobel Literature Prize were demoted on web site homepages and buried among hundreds of other headlines. China Mobile users also found it impossible to send out any text messages mentioning “Liu Xiaobo.”

Hong Kong-based Phoenix TV did report on the award, but in the context of the foreign ministry’s condemnation of the honor.

And broadcasts of CNN and BBC, which are usually available in upscale hotels and places where foreigners gather, were blacked out when the Nobel announcement was made and during subsequent reports on the award.

‘Finally this day has arrived!’
Despite the government-controlled media blackout, the Chinese blogosphere and microblogs still exploded with excitement as soon as the news came out that Liu had been awarded the prize.

On Twitter, the popular web site that can only be accessed via proxy servers in China, it seemed like almost every tweet was about Liu winning the honor.
“I’m in ecstasy,” wrote Wang Dan, a prominent student leader at the Tiananmen Square protests in Beijing in 1989 who now lives in the U.S. “Finally this day has arrived!”

Reports on dinner celebrations and firecrackers popping in major cities spread online and there were more than a few tweets from people saying they had shed tears in exhilaration at the news.

There were also sarcastic comments making the rounds, too. “The Nobel Committee must be broke! So they are giving the award to someone who cannot come to get his money!” or “Congratulations to Chinese judges who sent Liu Xiaobo to prison! They just won the Nobel Shame Prize!”

Outside the Twitter world, under the surveillance of the government’s censorship, Netizens still found ways to express joy and anger about the government’s response to the award. One person wrote, “Good new, good news, Chinese! You know what I mean!”

And on Douban.com, another popular Chinese Web portal, a user named “Chengcheng” simply posted links to reports on the win from the world’s major newspapers with Liu Xiaobo’s photo and wrote, “He’s in the headlines of all these media” without writing Liu’s name.

His post was followed by comments from other users who didn’t mention Liu’s name, but pointed out the constant struggle with censorship. “Yeah he’s on headlines of English media, but not on Chinese ones,” one person wrote. Another wrote, “Last year everyone talked about Obama winning Nobel, this year…nothing.”

Another stop in a long journey
The prize was clearly a big boost for China’s dissident community, which has been largely harassed and marginalized by China’s economic achievements and dramatic rise on the global stage.

Qi Zhiyong, who lost a limb during the 1989 armed crackdown at Tiananmen Square, said the prize was “a confirmation and promotion of Chinese struggle for democracy.” He quickly added, “but it also means we have to redouble our efforts to realize that day,” he said.

Peking University professor Xia Yeliang, who co-signed the controversial Charter 08 manifesto that led to Liu’s imprisonment, boldly declared to a group of foreign journalists that “the one-party dictatorship will be ended within ten years.”

For Liu himself, the prize marks the culmination of a long journey that began in the late spring of 1989. He cut short his fellowship at Columbia University in New York to join the historic pro-democracy movement at Tiananmen Square.

The Tiananmen movement was “teaching China’s government on how to govern in the ways of democracy and rule of law,” he declared in a manifesto that led to a hunger strike in June 1989.

Nearly 20 years later, he was still promoting the same message. “The awakening Chinese citizens increasingly recognize that freedom, equality and human rights are universal values and that democracy, a republic, and constitutionalism are the hallmarks of modern governance,” declared the Charter 08 manifesto that Liu helped compose in 2008. That document eventually led to an 11-year prison sentence.

“He has never thought of giving up, and I cannot persuade him to stop,” his wife told NBC News before the news of the Nobel award.

“You only have one life, so I let him do what he wants to do,” she added.