PEPP Seminar “The Impact of China’s Rare Earth Policy on Downstream Industries” (Feb 15)
2017/01/10
Title: “The Impact of China’s Rare Earth Policy on Downstream Industries”
Evidence from a Large-scale Social Experiment to Promote Environmentally Friendly Coffee”
Presenter: Dr. Zhe Chen (Assistant Professor, the School of International Trade and Economics, University of International Business and Economics, China)
Date: Wednesday, February 15th, 2017
Time: 16:45-18:15
Venue: 3K Building, Room 311 (Central Area)
Coordinator: Prof. Zhengfei Yu
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Abstract
This paper discusses the impact of China’s rare earth policy on downstream industries. When China implemented the tough restriction on rare earth exporting in 2010, it caused a significant price gap between the domestic market and foreign markets. Therefore, downstream industries in China enjoy cost advantages relative to foreign competitors. First, this policy has led a rapid increase in exports of Chinese rare earth downstream firms relative to other Chinese firms. The increase of exports is mainly due to the price rather than quantity. Second, this paper focuses on a typical downstream product — magnets, and finds that the exports of Chinese metal permanent magnet also increase faster than exports of other countries. These evidences suggest that increasing export restrictions on rare earth indeed promoted the exports of downstream industries.
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