China's Use of Rare Earth Elements and Its Geopolitical Implications

Document Type : Research

Authors

1 Ph.D Student of International Relations, Department of Political Science, Faculty of Adminstrative Sciences and Economics, University of Isfahan, Isfahan, Iran.

2 Associate Professor, Department of Political Science, Faculty of Adminstrative Sciences and Economics, University of Isfahan, Isfahan, Iran.

Abstract

Extended abstract
1- INTRODUCTION
Rare earth elements (REEs) play a crucial role in modern technology, making them essential components of various high-tech products, including electronics, electric vehicles, and military applications. While the quantity of REEs in each device might be small, their unique properties are irreplaceable, and they are vital for the proper functioning of these technologies. The growing use of REEs in advanced applications, combined with the establishment of international trade agreements in this sector, has led to increasing global competition in the rare earth elements market. China has emerged as a leader in the REE industry, a position it has held since the mid-1980s when it began to gradually dominate the world market. As demand for these elements continues to surge, the limited availability of extractable reserves has become a concern. Changes in consumer preferences worldwide, particularly the shift towards high-tech, environmentally-friendly products, have driven this growing demand. The increase in demand has had a profound impact on countries that control the production and market for rare earth elements, as they gain significant influence in the international political and economic arena.
The central question explored in this research is the geopolitical consequences of China's near-monopoly in the international rare earth elements market. Given the indispensability of these elements in various industries, including electronics, medical technologies, telecommunications, and defense, their control has far-reaching implications. A country that manages to monopolize the rare earth elements market can wield substantial influence over global politics and the international political economy. This paper aims to investigate the geopolitical outcomes resulting from China's dominance in the international rare earth elements market.
2- THEORETICAL FRAMEWORK
The concept of the geopolitics of natural resources is employed in this research to elucidate China's hegemony and its exclusive position in the international market for rare earth elements. Geopolitics involves examining how a country's unique geographical attributes impact its power dynamics and influence on the global stage. Among these geographical elements, natural and mineral resources are of paramount significance. Governments strive to manipulate and control the supply and demand chains within strategic markets to shape the structure of these markets, including those related to strategic resources, in alignment with their political and economic objectives.
3- METHODOLOGY
The paper will utilize a descriptive-analytic methodology to address the research question and expound on the influence of rare earth elements on China's political, economic, and military power in global politics. This methodology involves the use of both current and historical data to discern patterns and relationships between the variables associated with the research question or hypotheses. It is a method employed to provide a comprehensive and analytical examination of the subject matter.
4- RESULTS & DISCUSSION
The research findings indicate that China's relative monopoly and comparative advantage in the production and supply of rare earth resources have evolved into a geopolitical asset, with implications for its economic, political, and military power in relation to major rivals like the United States. In essence, China's geopolitical control of rare earth elements has translated into advantages across economic, political, and military dimensions vis-a-vis its formidable competitors. Despite efforts by other governments to counter China's monopoly, these endeavors have not yielded substantial success thus far. Given China's long-term strategic plans, it is anticipated that Beijing will likely maintain its monopoly on these resources at least until the year 2050.
5- CONCLUSIONS & SUGGESTIONS
To summarize, the key findings of this research on the political and geopolitical consequences of China's relative monopoly on rare earth elements include:
Price Determination: China's control over rare earth elements allows it to influence the prices of these elements, giving it a strategic advantage in the global market.
Dependence and Vulnerability: Other countries, particularly the United States, become dependent on China for these critical resources, making them vulnerable to China's policies and potentially subject to supply disruptions.
Bargaining Power of Chinese Companies: Chinese companies gain significant bargaining power in industries dependent on rare earth elements, enhancing China's economic influence.
Impact on Employment: China's control affects employment rates in Western countries and elsewhere as industries relying on rare earth elements may face challenges due to supply issues.
These developments collectively contribute to an increase in China's power position compared to competitors like the United States, Japan, and the European Union. Given Iran's substantial reserves of rare earth elements, there is potential for these resources to serve as a diplomatic tool in foreign policy, bolstering Tehran's bargaining power in the international economic arena and potentially influencing discussions related to U.S. sanctions against Iran.

Keywords

References

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International Political Economy Studies
Volume 6, Issue 1
September 2023
Pages 223-256

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History

  • Receive Date: 23 August 2022
  • Revise Date: 22 January 2023
  • Accept Date: 05 February 2023

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