Case:China Limits Exports of Rare Earth Materials

 

 

Instructions. Read Case 5: China Limits Exports of Rare Earth Materials (pictures attached)

• The following articles may also be helpful:
  • http://www.bloomberg.com/news/articles/2013-12-17/pentagon-less-dependent-on-china-rare-earths-report-says
  • http://www.bloomberg.com/news/articles/2014-03-26/wto-panel-sides-with-u-s-in-dispute-over-china-minerals

After reading and reflecting upon the discussion questions below, please write-up your case assignment. Remember, your answers to the below discussion questions make up “Section 2” of your case write-up, and each answer should be provided in a separate paragraph.Case write-ups should follow the following format:

Section 1: Introduction – a brief summary of the case and what you will address in the write-up.

Section 2*: Answers to questions (at the end of the case). Each answer should be discussed in its own paragraph(s).

Section 3: Conclusion – A synopsis of the case and any concluding remarks.

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*The questions to answer for this case (for Section 2) are as follows:

• Question 1: Which groups benefitted the most from China imposing an export quota on rare earth metals? Did it give the Chinese domestic manufacturers a significant cost advantage? Did it result in dramatically increased quality and environmental standards?
• Question 2: Given that 97 percent of rare earth metal production is now done in China, an increase from 27 percent to 97 percent between 1990 and 2010, do you think countries such as Australia, Canada, and the United States should reconsider their environmental restrictions of the production of such metals?
• Question 3:The restrictions imposed by China on rare earth metals has resulted in some companies (e.g. Toyota, Renault, Tesla) starting to look for alternatives. They plan to use parts that do not include rare earth metals. Is this a good solution?