Rare Earth Elements in China

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Running Head: RARE EARTH ELEMENTS IN CHINA

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Rare Earth Elements in China

Michelle Kent University of Houston-Victoria Econ 6367

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Abstract China has an important determinant been at the center of discussion concerning its influence in the global economy. This means that major global economies are up in arms to compete with it for world economic superpower which is currently occupied by the United States of America. It is a common knowledge that the size of the economy relies on the volume of exports and imports of and the corresponding nature of such commodities. Rare minerals are some of the crucial resources that influence the economic structures of different countries and China is not an exceptional. The level of natural resource base is an important determinant of the ability of a given country to realize expansionary growth and infrastructural development. In the international platform, the quota system determines how much export or import a country is entitled to. The main issue in this paper is to find out the impact of the allocated export quota for China on rare Earth metals and the effect this has in the global economic direction (Kogel, 2006). Rare minerals are instrumental in giving a country a bargaining power in the international world market.

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The current social, political and economic realignment taking place in the world is increasing spreading to the different countries in the world. With the campaign against mercantilism trade policy and the advent of free trade by Classical economists, a new world economic order has been on the making. This new concept is termed as globalization (Emsley, 2011). Conventionally, any business transaction is based on mutual gain by the parties concerned and there is always the risk of exploitation if there are no laws to regulate the mode of interaction. It is also an economic reality that each state must be comparatively advantaged in production of a given commodity hence the necessity of exchange. It is through such concepts that the spirit of interdependency developed and this led to an integrated economic behavior of all the countries across the globe in one voice as if the world was one village and this constitutes globalization. The concept of globalization explains the emerging convergence in social, economic and political policies a few, economically the different states have been signing multilateral trade agreements with similar behavior across the world summing up to cultural globalization. There is also the financial globalization especially in the stock market where trade in securities is done online across any convenient and profitable market. Technological globalization is also at play with the explosive information communication technology. It is very evident that even corporations especially the multinationals are currently operate in different geographical locations at different stages of production at desirable cost. For instance, value creation activities can be based anywhere in the world where the input factor is cheap and distribution and central management and co-ordination of activities done completely somewhere else. Globalization has come in various aspects which include improved information communication technology, transport network and cultural convergence. In this era of computers

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and micro processors a lot of information can be generated and produced within a short time. The introduction of jet planes has made it easier to move from one location to another within a short time. All such factors lead to what is currently referred to as globalization or transformation of the world into one small village. In a new twist of things, it has been realized that globalization is not to the advantage of everybody but it benefits the developed nations and continues to sink the less developed economies. It is in the light of...
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