TERM PAPER – CHINA’S EXPORT QUOTAS ON RARE EARTH ELEMENT Case Solution
1). Introduction
Globalization could be defined as the international integration of the different countries around the world which arises in the form of the interchange of the ideas, products, world news and many other aspects of the culture. If we talk about the types of globalization then there are three different types of globalization. These three are the economic globalization, cultural globalization and political globalization. Our main focus within this paper is only on economic globalization(Bordo, Taylor, & Williamson, 2007). There is no national economy around the world today which is just an island now and each of the national economies in the world have began to influence one another.
One country which is rich in capital invests in the other country or one country which has high technology or rare materials, supplies it to the other countries which do not have enough of these technologies or materials. There are many positive aspects of globalization such as it allows the under developed countries of the world to develop quickly and build up their resource base. However, there are also many negative aspects of globalization also such as the finite resources are used up more quickly(Bordo, Taylor, & Williamson, 2007). For instance, in 2001 China had joined the world trade organizations and by the end of 2002 the coal usage of China has risen rapidly. This could be seen in chart 1 in the appendix.Globalization today has become extremely important as it has allowed the large as well as the smaller countries around the world to benefit from the economic energy and also collaborate with all the other countries in terms of economic, social and political challenges.
Trade in the rare earth elements is extremely important for almost all the countries today. However, the important of the international trade in these raw materials is of significant importance for the European and their other economies. There are many sectors which are dependent upon the usage of the rare earth materials and the most significant of these industries are aerospace, automotive, chemicals and the construction industry(O'Rourke & Williamson, 2008). The use of the rare earth elements within these industries is significant. Therefore, this supports the economic globalization by supplying the required raw materials to these industries for the globalization of the ownership and production.
However, despite the fact that there have been many publicized concerns over the restricted trade supply of the rare earth elements, the rare earth crisis around the world has impacted the global economies of the world significantly. The rare earth market has seen a turbulent time for the last few years. The rare earth elements which is a group of 17 elements has become extremely vital in the manufacturing of the high tech products such as smart phones, wind turbines, hybrid cars and military jet components. These components are not at all rare but the geological distribution of the rare earth elements is such that there are only certain deposits of these minerals which are economical to the mine. This paper attempts to discuss the uses of these rare earth elements, the trade policies of China on rare earth elements, their recent cuts in export quotas, its economical impacts for the other countries and the impact upon the demand and supply of these materials. Finally, conclusion for the next strategies has been made given all the core findings in the paper.
2). Discussion
The discussion of the rare earth elements has been broken down into different sections and each section focuses on different aspects of the rare earth elements. Each of these sections is shown below..................
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