The Research On China’s Rare Earth Trade Policy From The Perspective Of Sustainable Development

In recent years, China’s export quota system on rare earth encounters with strong disagreement from the United States, Japan and European Union who have been appealed to the WTO. Although China has a pivotal position in the global rare earth market, it’s domestic rare earth industry faces various problems of resource overexploitation, ecological destruction, lack of pricing power, export smuggling irrational industrial structure and the like. The related research from home and abroad on China’s rare earth trade policy focuses on the policy content, its evolution, the optimal restrictive policy and their compliance. The aggregate results lack in not only the in-depth theoretical and empirical research, but also the implementation effect of such policies. Base on the framework of strategic trade policy theory and the perspective of sustainable development, this thesis discusses the China’s existing trade policy and its rationality by testing the effect of above trade policy, trying to describe the achievements and problems of China’s rare earth policy.This study compares different countries’rare earth policies through contrastive analysis, analyzes the selection model of trade policy based on the strategic trade theory, and then conducts the empirical analysis on the effect of China’s rare earth trade policy by using the panel data. The research work mainly includes the following aspects:Firstly, this thesis summarizes the related research of sustainable development theory and strategic trade policy theory, and reviews the research results from both at home and aboard.Secondly, the problems of resource overexploitation, ecological destruction and export smuggling are discussed in the aspects of resource exploitation, export trade and application area. Meanwhile, the author compares the rare earth trade policies of China, Japan, the United States and European Union and explains the reasons why above policies are implemented.Thirdly, the selection model of rare earth trade policy is built based on framework of the Third Market Model. The result suggests that China should insist on the rare earth restriction, increase R&D subsidy and encourage technological innovation, and respond relevant WTO appeal actively. The further study is made for the implementation effects of China’s rare earth trade policy. The empirical test finds the results of trade stabilizing effect and environmental protection effect.Finally, the relevant conclusions of the study are summarized and policy recommendations arc put forward based on the results of theoretical model and effect analysis.Besides, on basis of existing research, this study extends the research mainly through the following aspects:attempt to introduce the research perspective of sustainable development in to this research and conduct theoretical discussion on the features of reverse trade policy for theoretical discussion; establish a gravity model to study the effect of institutional distance on China’rare earth trade and hereby estimate the index of export potential so as to reflect the trade stabilizing effect of China’s rare earth trade policy; find out the "tit for tat" feature of mutual policy between China and Japan, the United States and Huropean Union, and propose the strategy that China should actively seek to control the whole rare earth industrial chain. Due to the deficiency of data, pars of this study still can be improved and deepened in future research.