An International Public Goods Perspective upon China’s Resource Governance: the Function and Invalidation of REO(rare earth oxide) Economic Diplomacy


  • Yan Zhanyu China Foreign Affairs University, Beijing, People’s Republic of China
  • Wang Hongyu University of International Business and Economics, Beijing, People’s Republic of China/ Vrije Universiteit Brussel, Brussels, Belgium
  • Li Hongjia University of International Business and Economics, Beijing, People’s Republic of China



REO - International REO trading system - International public goods National power - Economic diplomacy


The defeat of China’s REO lawsuit in WTO reflects the worsening
international environment of China’s REO trade and failure of China’s REO
economic diplomacy. REO trading system under the WTO framework is essentially an
international public goods provided by both REO consuming and supplying countries.
China and Western countries are assumed the responsibility of providing material
and normative public goods. However, China’s high cost of providing public goods
and profit outflow resulted in China’s practical dilemma in REO trade. Although
China’s economic diplomacy committed to reverse this imbalanced situation, due to
the block between capability and power conversion, the dominance of REO resources
in China failed to translate into a trade advantage, thus proclaiming the failure of REO
economic diplomacy and leading a more serious imbalance.


Cao C, Dong X (2010) 曹昌、董显苹:《稀土!稀土!》( Rare earth!! Rare earth!). China

Economic Weekly, 36

Cheng H, Guan L (2002) 程浩、管磊:《对公共产品理论的认识, (Understanding of public

goods theory). Journal of Hebei University of Economics and Business (6): 10-17

Guo M, Jia Z, LiuC, Dong J, Zhang C (2009) 郭茂林、贾志琦、刘翠玲、董建忠、张纯《中

国稀土产业现状及战略安全的几点建议 ( The feature of China’s REO industrial security and

several suggestions).Sci-Tech Information Development & Economy (32): 95—98

Gutman GO (1975) Resources Diplomacy, The Australian Quarterly, Vol. 47 (1): 36-50

Han H (2014) 韩华明:2014年中国稀土面临严峻挑战, ( China faces severe challenges in

REO field in 2013). China Nonferrous Metals News, Feb. 27,(7)

He J (2011) 何家凤:《我国稀土价格波动的特点及成因分析( The fluctuation of China’s

REO pricing and its causes). Price: Theory & Practice (2): 42—43)

Jiang S, Su W (2011) 江升、苏文:《当前国际形势下的中国外交资源构想》(Depiction of

China’s diplomatic resources at the present international environment. International Journal of

Mining Science and Technologys1, pp.8—10)

Li B (2004) 李宝林:《新世纪前中国“资源外交”透视》(Retrospect on China’s new century

resource diplomacy. Natural Resource Economics of China, (5): 9—11

Li G (2014) 李光磊《WTO稀土案中国“一审”败诉或引发行业市场化松绑》,( CHINA’s

defeat in the first lawsuit in WTO may arise a loosen industrial policy).Financial Times, May

Li H (2011) 李华:《我国稀土出口定价权问题探析》( Research on REO export pricing

power of China). China Business & Trade (6): 213—214

Li X (2012) 李晓莉:《疯狂的稀土》(Crazy rare earth). China Small & Medium Enterprises,

(1): 42—43

Li X, Xi Y (2011) 李新、席艳乐:《国际公共产品供给问题研究评述, ( Analysis of the

providing of international public goods). Economic Perspectives, (3): 132-137

Liu X (2014) 刘小芳:2013年我国稀土主要产品出口现状, Present feature of China’s REO

export in 2013. China Rare Earth Information (2): 20—32

Liu Y (2007) 刘余九:《中国稀土产业现状及发展的主要任务, (Current situation of China’s

rare earth industry and its main task). Journal of the Chinese Rare Earth Society, (3): 257-263)

Mancheri NA (2013) Chinese Monopoly in Rare Earth Elements: Supply- Demand and Industrial

Applications, China Report 2012 48: 449, Jan 18, 2013, pp.449-468

Pang X (2012) 庞珣:《国际公共产品中集体行动困境的克服》 (Overcoming the

predicament of collective action in international public goods). World Economics and Politics,

(7): pp.25—27)

Qiu L (2013) 邱林:提高稀土高附加值是当务之急, (Improve the rare earth high added value is

a pressing matter of the moment). China Nonferrous Metals News, July,11

Sun Z (2010) 孙章伟:《美国稀土生产、储备与贸易研究, (Research on US REO

manufacture, reservation and trade). Finance and Economy (12): 27—29

Wan Y (2011) 方玉泉:《稀土价格形成机制初探》(Analysis on REO price forming

mechanism). Northern Finance Journal (12): 51—53

Wang J (2011) 王珺之:《中国稀土保卫战, ( China Rare Earth Battle). Beijing: China

Economic Publishing House

Butler CJ (2014) Rare Earth Elements: China’s Monopoly and implications for U.S. National

Security. The Fletcher Forum of World Affairs 38.1: 23-39

Wang Z (2007) 王铮:《全球公共产品与多边贸易体制改革, (Global public goods and

reform of multilateral trading system). Productivity Research (16): 89-90

Xie C (2008) 解丛丛:《四箭齐发整顿稀土开采乱象, ( Four measures to recomfile the chaos

in exploiting REO). International Business Daily (2011):Aug. 25.)

Xue M, Qi Y (2010) 薛牧青、齐云鸿:《中国应当如何善待稀土资源, (How should China

treat REO researches friendly).Youth Reference, Nov. 09.

Yang Y, Liang J, Li M (2012) 杨烨、梁倩、李美娟:《工信部称稀土污染代价触目惊心》

(MIIT said the pollution of rare earth was shocking).

Yao Z (2012) 姚姿淇:《印度同意向日出口稀土:日本欲摆脱对中国稀土依赖,(India

agreed to export rare earth to Japan: Japan tried to get rid of dependence on China’s rare earth).

China Rare Earth Information (12): 19

Zhang Shujing (2013) Problems and Countermeasures of Rare Earth Industry in China. Canadian

Social Science, Vol. 9 (3): 9-14

Zhu F (2006) 朱锋:《中国的资源外交尚需大智慧》(China needs more diplomatic wisdom

in resource diplomacy. China Rare Earth Information (6): 35—37

National Development and Reform Commission, People’s Republic of China (2005) 《关于控

制部分高耗能、高污染、资源性产品出口有关措施的通知》,(Notice on the control of some

of the high energy consumption, high pollution, resource products export of relevant measures),

Dec.14.),,logging on 2015, Mar. 15

National Development and Reform Commission, People’s Republic of China (2006) 《关于


知》, ( Notice on promulgating “restrict land for the project directory (2006 version)>”and

“prohibited land for the project directory (2006 version)” , Dec.30.), logging on 2015, Mar. 15.

Ministry of Land and Resources of the People’s Republic of China (2012)

中国矿产资源报告2012》,(China Mineral Resources Report 2012), Nov. 29.),

Chinese Industry Research Network (2012) 2012年印度扩大稀土能源生产情况调查分析》,(

Investigation and Analysis of 2012 India’s expanding energy production of rare earth), Aug. 23,,logging on 2015, Mar. 15