Project Proposal-International Business
Project Proposal
Analysis of China’s Monopolist Policy on the Exportation of Rare Earth Metals
ISSUE:
China is by far the world’s biggest supplier (97%) of the 17 rare earth metallic elements that are essential to produce iPhones, wind turbines, electric cars, robots working assembly lines, precision-guided missiles and a host of other items. China sits on a large portion of the world’s known reserves and has maintained almost total dominance over supplies in recent years. There is currently no rare earth mining going on in the European Union and Japan, which rely almost 100% on Chinese imports of rare earths.
On 13 March 2012, Japan, European Union and the United States requested consultations via WTO with China with respect to its restrictions on the export of various forms of rare earths, tungsten and molybdenum. These restrictions include export duties, export quotas, minimum export price requirements, export licensing requirements and additional requirements and procedures in connection with the administration of the quantitative restrictions. In September 2009, China announced plans to reduce its export quota to 35,000 tons per year in 2010–2015, ostensibly to conserve scarce resources and protect the environment but China announced further export quotas in July 2011 by capping total production at 93,800 tonnes. Furthermore, in September 2011, China announced the halt in production of three of its eight major rare earth mines, responsible for almost 40% of China's total rare earth production. The Appellate Body of the World Trade Organisation (WTO) had confirmed the findings made by a Panel in July 2011 that China’s export restrictions on several industrial raw materials are in breach of WTO rules. The WTO found that China’s export restrictions are not justified for reasons of environmental protection or conservation policy
Such monopolist restrictions have damaged industries in other countries and forced producers of rare earth products to
Analysis of China’s Monopolist Policy on the Exportation of Rare Earth Metals
ISSUE:
China is by far the world’s biggest supplier (97%) of the 17 rare earth metallic elements that are essential to produce iPhones, wind turbines, electric cars, robots working assembly lines, precision-guided missiles and a host of other items. China sits on a large portion of the world’s known reserves and has maintained almost total dominance over supplies in recent years. There is currently no rare earth mining going on in the European Union and Japan, which rely almost 100% on Chinese imports of rare earths.
On 13 March 2012, Japan, European Union and the United States requested consultations via WTO with China with respect to its restrictions on the export of various forms of rare earths, tungsten and molybdenum. These restrictions include export duties, export quotas, minimum export price requirements, export licensing requirements and additional requirements and procedures in connection with the administration of the quantitative restrictions. In September 2009, China announced plans to reduce its export quota to 35,000 tons per year in 2010–2015, ostensibly to conserve scarce resources and protect the environment but China announced further export quotas in July 2011 by capping total production at 93,800 tonnes. Furthermore, in September 2011, China announced the halt in production of three of its eight major rare earth mines, responsible for almost 40% of China's total rare earth production. The Appellate Body of the World Trade Organisation (WTO) had confirmed the findings made by a Panel in July 2011 that China’s export restrictions on several industrial raw materials are in breach of WTO rules. The WTO found that China’s export restrictions are not justified for reasons of environmental protection or conservation policy
Such monopolist restrictions have damaged industries in other countries and forced producers of rare earth products to