Analysis of Unstable Supply and Demand of Rare Earths from Korea to China and Countermeasures against Regulations: Based on Quad-system Subscriptions

Abstract

Purpose – This study investigates the impact of regulations over Rare earth that recently China had carried out agianst USA. This discussion examines the definition of essential strategic resources called rare earths, China’s precedent of declaring resource weaponization, and its influence. Furthermore, it analyzes the possibility of China’s rare earth export regulations in trade between South Korea and China, and also suggests Korea’s countermeasures to them, focusing on joining the QUAD system. Furthurmore, POSCO Group, which is pushing for ‘E-Autopos’, a next-generation electric vehicle platform, will be analyzed as a concrete example to discuss the impact on not only the Korean electric vehicle industry but also automakers doing business with POSCO Group. Design/Methodology/Approach – To this end, we used d ata f rom China’s rare earth production, actual cases of damage suffered by POSCO at the time of the restriction on rare earth imports from Japan and the United States. Findings – The quad system is a U.S.-centered security talks planned since the Trump administration and is preparing for China’s exclusive exercise of rare earth hegemony. Moreover we discuss about the high probability that China’s export regulations would be imposed on Korea, considering the domestic economy, which is highly dependent on the Chinese economy. As a result , we insist it is essential for Korea to join the QUAD in preparation for existing rare earth-related risks. In order to elaborate its discussion, we will also link up with the domestic electric vehicle industry, which is essential to have rare earths. To this end, POSCO Group, which is pushing for ‘E-Autopos’,a next-generation electric vehicle platform, will be analyzed as a concrete example to discuss the impact on not only the Korean electric vehicle industry but also automakers doing business with POSCO Group. Research Implications – Through this analysis process, we will analyze the impact of China’s rare earth export regulations on the Korean economy, approach and develop the phenomenon on Korea in terms of resource factors, and present solutions.