Study Of The International Market Power Of China's Rare Earth

Rare earth resources have many excellent characteristics,and occupy an important position in high and new technology field,which is an important strategic resource that restricts the development of high and new products.China is the world's leading exporter of rare earth resources.But the export price is often limited to developed countries such as the United States and Japan.The international market power of China's rare earth resources is very weak.Paper first study the theory of the model of bilateral trade from the perspective of buying and selling.The theoretical basis of this model is proposed by Lerner who used Lerner index to measure the enterprise market power.Then the Lerner index is improved,introduce the concept of "demand price elasticity”.Baker & Bresnahan put forward residual demand elasticity model,and realize the theory deeply;Eventually,on the basis of residual demand elasticity model,Marchant rebuilt the residual demand elasticity and residual supply elasticity,formed the theory of the model of bilateral trade from the perspective of buying and selling.Secondly,the present situation of the reserves,production and trade of rare earth resources is analyzed in order to understand the position of our country in the global rare earth market.China is the world's largest Hoarder,producer and exporter,and the share of the world is highest.Japan is the world's largest importer of rare earths and is the world's largest importer,and much higher than the second importer.Japan's biggest source of imports is also China.But in terms of price,China's export price is low relative to other countries.The paper will measure the international market power of rare earth resources exported to Japan from china from the angles of buyers and sellers.And China's exports to the United States and the United States exports to Japan for comparative study and comprehensive analysis.Through STATA12.0 software of three stage least squares method to carry on the empirical analysis,the empirical results show that:Rare earth resources in the trade between China and Japan,China has no market power,Japan has strong market power;Between the United States and Japan,the United States and Japan have market power at the same time,and Japan's marketpower is slightly larger than the United States.In rare earth resources trade of China and the United States,China and the United States has the market power at the same time,and the market power of the United States market is slightly greater than China.So it can be concluded that Japan's international market power comes first,the United States next,China's international market power is the weakest.This paper considers that China's international market power is weak the fundamental reason is that China's rare earth reserves is huge,but insufficient effective domestic demand for rare earths.The easiest way to solve the surplus of domestic rare earth resources is exported to international market,but domestic companies are lack of unified foreign sound,interacting each other,vicious competition,each other keep the prices down,so led to China export of rare earth resources to the international market at a lower price.When China demand increase,will reduce the export of rare earth resources,but at the moment,many countries have established a relatively complete system of reserves,will not accept high-priced import of rare earths,also led to China at a lower price in international market,led to the loss of international market power.