The impact of international rare earth trade competition on global value chain upgrading from the industrial chain perspective

Abstract

Rare earth (RE) trade competition is becoming fierce, and an investigation of the global value chain (GVC) of a country's RE industry should place it in a competitive network. This article adopts the complex network method to analyse the evolution of international RE competition patterns from the perspective of the industry chain, and evaluates the impact of RE competition on GVC status using a panel regression model. The results show that competition at different stages is becoming increasingly fierce, among which the downstream competition is the most intense, with more than 140 competitors. China and Germany have remarkable competitiveness in downstream products. In addition, RE competition landscape drives GVC upgrading by increasing the number of competitors and the tightness of competition, and the downstream has the greatest impact. An increase of 1 in tightness of competition of upstream, midstream and downstream products upgrade the GVC by approximately 0.359, 0.211, 2.744 units, respectively. Further, the impact on GVC upgrading of the competition landscape in high economic countries is more significant than that in countries with a low economic level. This study suggests that countries can upgrade their GVC by improving technology and establishing stable international relations with important trading partners.