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

Author

Listed:
  • Carlos Aguiar de Medeiros

    (Universidade Federal do Rio de Janeiro, Brasil.)

  • Nicholas M. Trebat

    (Universidade Federal do Rio de Janeiro, Brasil.)

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.

Suggested Citation

  • Carlos Aguiar de Medeiros & Nicholas M. Trebat, 2017. "Transforming natural resources into industrial advantage: the case of China’s rare earths industry," Brazilian Journal of Political Economy, Center of Political Economy, vol. 37(3), pages 504-526, February.
    • Handle: RePEc:ekm:repojs:v:37:y:2017:i:3:id:95248
    DOI: 10.1590/0101-31572017v37n03a03
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    Keywords

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    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries

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