From action to reaction: The Chinese case in the consolidation of the Rare Earth Elements monopoly and the complaint at the World Trade Organization
From action to reaction: the Chinese case in the consolidation of the Rare Earth Elements monopoly and the complaint at the World Trade Organization
DOI:
https://doi.org/10.5752/P.2317-773X.2020v8n3p152-173Keywords:
China, Elements of Rare Earths, Economic Power, MonopolyAbstract
What is Chinese strategy in natural resource markets with a large supply participation? From an eminently qualitative case study, but with quantitative tools such as monopoly power index of the Rare Earth Elements (ETR) market, we show how China has consolidated as a monopolist and how it has responded to the accusations in the international trading system. ETRs are neither rare nor land, but they characterize an important input of the global trade supply chain, standing out mainly in missile control, defense and communication systems. After all, what is China's interest in gaining control over its production chain? How did the country achieve this and what instruments of industrial and trade policy were employed? What is the reaction of other actors in this market? It is suggested that the goal of monopolizing the supply chain of strategic ETR natural resources was to consolidate Chinese economic power. We show how China occupied a privileged position in the sector, reaching the position of largest exporter of these elements and strong monopoly power, calculated through price elasticity indices of demand and how it was positioned in the international dispute.
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