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

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.

Automated summary

This article analyzes the evolution of international rare earth competition patterns using the complex network method and evaluates the impact of competition on the global value chain. The results show that competition is increasingly fierce, with downstream competition being the most intense, and China and Germany being highly competitive in downstream products. Furthermore, the changing landscape of rare earth competition drives the upgrading of the global value chain, with the downstream having the greatest impact. Moreover, the competition landscape of high economic countries has a more significant influence on the upgrading of the global value chain.