Study On The Scale Economics And Innovative Policies Of Rare Earth Industry

Rare earth is the key and irreplaceable important elements of some functional materials in optical, electrical, magnetic field, widely used in such high-tech fields as new energy, new materials, energy saving and environmental protection, aerospace, and electronic information, and is also the core indispensable resources for the development of strategic emerging industries. The rare earth industry is the unique advantageous industry with the strategic significance in China. To promote the sustainable development of rare earth industry in China, effective cooperation and support is needed among the nation, industries, and companies. To the problems of the development of rare earth industry in China, the paper launched the research from the scale economy of the rare earth industry, political mechanism on enterprises to the innovation policies of the rare earth industry, and has obtained the following innovative achievements.On the basis of in-depth analysis of the production technology, process and features of the path of the rare earth industry, the paper concluded the characteristics of scale economy of enterprises in the rare earth industry, proposed the relationship between scale economy and scope economy of enterprises in the rare earth industry, and established the optimal scale economy model for rare earth enterprises. The model showed that the economies of scale in rare earth enterprises was constrained by some factors like raw materials, environmental costs, and that the unique process of rare earth industry determined enterprises could only reach the optimal economic scale by tapping the added value of raw materials.Environmental policy and R & D subsidies are two of the important means of industrial policies. In view of the problems of the environment and industry development of rare earth industry, the paper established the game model taking the consideration of environmental tax and R & D subsidies for rare earth enterprises. The model showed that the subsidy policy of the government will be much more effective than regulation policy. The main reason was that the subsidies from the government to enterprises would compensate some cost of R & D. As a result, enterprises could create greater profits by providing more products.The detailed analysis was made on the resources elements in the view of the rare earth industry innovation demands, the paper established an innovative elements analysis model based on the life cycle of rare earth industry and the value chain. On the basis of this, the paper made the empirical research on the innovative elements and innovation policy of rare earth industry. And the paper evaluated the current innovation policy of China’s rare earth industry.