Transforming natural resources into industrial advantage: the case of China’s rare earths industry

Vol. 37 No. 3 (2017)

Jul-Sep / 2017
Published February 26, 2020
PDF-English
PDF-English

How to Cite

Aguiar de Medeiros, Carlos, and Nicholas M. Trebat. 2017. “Transforming Natural Resources into Industrial Advantage: The Case of China’s Rare Earths Industry”. Brazilian Journal of Political Economy 37 (3):504-26. https://doi.org/10.1590/0101-31572017v37n03a03.

Transforming natural resources into industrial advantage: the case of China’s rare earths industry

Carlos Aguiar de Medeiros
Universidade Federal do Rio de Janeiro, Brasil.
Nicholas M. Trebat
Universidade Federal do Rio de Janeiro, Brasil.
Brazilian Journal of Political Economy, Vol. 37 No. 3 (2017), Jul-Sep / 2017, Pages 504-526

Abstract

This paper analyzes the development of China’s rare earths industry, emphasizing the role of state technological initiatives in the country’s transition from rare earth exporter to large industrial consumer of these raw materials. Like other industrial powers before it, China takes advantage of low-cost domestic supplies of strategic raw materials to promote higher value-added manufacturing. We argue that, in the case of rare earths, this strategy has been largely successful, disrupting a classic international division of labor that existed prior to 2000, in which China exported most of its rare earth output to wealthy countries, and transforming Chinese firms into exporters of more sophisticated downstream products.

JEL Classification: O1; O2; O3; N5.


Keywords: Rare earths industrial policy technical advance green technologies.