The Demand Of Rare Earth In The World And Our Sustainable Development Policies

Rare Earths have always enjoyed the reputation of "Industry Vitamin".There are17kinds of elements and are always in the state of oxide which are active in nowadays industry market and their importance is self-evident all over the world.High-tech industry has a more and more dependent on rare earths and every country is aware of their roles on national defense.Rare Earths mainly distrubute in America,Australia, Russia and China.Our country is rich in rare earths and have a great variety of goods,of course all countries of the world are in favour in our resources.In the1950’s or so, we had found aboundent of rare earths in our country, while we explored backward others, for example, America, Australia, ect.Before the1980’s, America was the main supplier for the whole world, but after1980’s, especially after1985our rare earths markets boomed with low cost of product and labor cost, we had a strong competition in market price which made us be the role of main supplier.At the same time,American deposits and Austrilian deposits were closed and exported from China.The reserve of our rare earths resource fall down from69%to23%during these twenty years,while we support almost80%demands of the world.Japan and Korea become our main trade country which nearly export70%or so resource from our country.Some resources use for production, some for strategic storage.Our rare earths industry is quite dispersive and has a low concentration ratio,many small and medium size entreprises participate in mining and refining work.While the small size and backward equipments, they take great burden to the environment, especially some radioactive elements have a damage impact to environment.Because of the sharp reduction of resource and harm to environment,our government take actions at once to avoid the situation get worse.We set a lot of policies,for example licencs, export limitation, duties and taxes.From the time that policies taking action to now, these policies have an apparent effects, the volume has been controled and the price also raised.At the meantime we promote the industry regulation and reconstruction to improve the overall productivity and increase the stock of the state,and then we can supervise easily.But our politic mearsurements induce complaints and disagreements of other co untions to that the monololistic behavior of WTO seriously, but also harm their benefits. In the face of the accuses of the world, the Chinese government issued formal document and report to explain the situation. As the rare earth problem of China has been pull to the media outlet, our government is positively looking for some methods to solve this issue. Meawhile our government wished that all countries should discuss rationally and cooperated with us so that our rare earth policy can make into force smoothly. In this strategic war related to the sustainable development of world rare earth market in future between, the interests of the north and south and the fairness of WTO will both be reflected in the game.Based on the introducing of the information above, I analyse the reason from the aspect from economic theory and the reasonability of our actions.From partial equilibriu to general equilibrium and the pricing theory all point out the same result that our rare earth price is low to the normal value, we must take action to avoid the disorder of our rare earth market.Also I indicate the problems of our policies, for example, quota striping, smuggling, the way of licence issued and rent-seeking.At the same time, I provide some raletive suggestions.Due to the time and knowledge limitation, there are of course shortcuts in some extent which need to furture research.