A dynamic evaluation on the international competitiveness of China's rare earth products: An industrial chain and tech-innovation perspective

Abstract

In the past decades, China's rare earth products have occupied a very important position in the international market. However, the existing literature still lacks an in-depth investigation on how competitive China's rare earth element (REE) products are, especially from an industrial chain and tech-innovation perspective. In this study, we developed a new revealed comparative advantage (NRCA) method by projection pursuit modeling and adopted the constant market share (CMS) model for measuring the long-term dynamic trends of the international competitiveness of China's REE exports. The results show that: (1) The international competitiveness of China's REE products has declined sharply in the past decade, and rebounded only in recent years; (2) The comparative advantages of China's REE products in the industrial chain vary greatly, the mid- and down-stream products have strong comparative advantages, while those in the upstream have no competitive edge; (3) China's REE market share is highly concentrated, and its market structure evolution reveals that the up- and mid-streams have been optimizing, but deteriorating in the down-stream. Based on these findings, we proposed relevant policy recommendations accordingly.