Title:
Re-control the market for strategic power: China's reregulation of its rare earth industry
Re-control the market for strategic power: China's reregulation of its rare earth industry
Author(s)
He, Yujia
Advisor(s)
Wang, Fei-Ling
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Abstract
This thesis studies the role and the capacity of the Chinese state in the development of China’s rare earth industry. The Chinese rare earth industry has rapidly developed since the late 1970s and has provided the global supply of this group of strategic minerals since the late 1990s. Through interviews, site visits and analysis of archival and secondary data, the study finds that the Chinese central state has long engaged in “reregulation” in industry liberalization and market development: the creation of new rules and reformulation of old ones to achieve the state’s own goals. From the onset of China’s economic reform in 1978, the Chinese rare earth industry has gone through three periods: the relaxation of central planning and industry development under state sponsorship (1978-1997), the expansion of domestic market and dominance in international trade accompanied with increased regulations (1998-2007), and the post-economic-crisis industry expansion accompanied with stronger state policies to steer its development (2008-present). Across different periods Beijing’s development goals have not been static, but shifting objectives that sought to utilize and advance the strategic values of the rare earths relevant to the state. To achieve the industry development goals, Beijing has actively managed the industry’s development through consistently introducing and adjusting industry-specific rules and policies. Yet contrary to the conventional wisdom of characterizing the PRC as a “strong state”, the Chinese state capacity in reregulating this sector has in fact been limited. The author has found that both national-level and local-level independent variables have influenced the dependent variable, the state capacity to impose effective reregulation over the rare earth industry (the extent to which the industry’s performance corresponded with the state’s intended goals and the policies and regulatory changes implemented by the state). At the national level, independent variables influencing state capacity include the State Council’s bureaucratic authority systems over market actors, the local cadre management system, and the introduction and enforcement of specific property rights and criminal laws. Changes in these political and legal institutional variables have impacted the capacity of the state to impose effective reregulation campaigns across time. At the subnational level, local-level independent variables influencing the state capacity include the geographical concentration of local mineral deposits, the technology intensity of local mining production, and the local market concentration of mining licenses. Lower geographical concentration of local mineral deposits, lower technology intensity of local mining production and lower market concentration of mining licenses among local market actors lead to lower level of state capacity in South China compared to North China. The findings provide both theoretical and empirical contributions to scholarly debates regarding state-market relations and state capacity in China especially about its economic reform and globalization.
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Date Issued
2016-05-17
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Text
Resource Subtype
Dissertation