Sustainable Governance of the Global Rare Earth Industry Chains: Perspectives of Geopolitical Cooperation and Conflict

Chunxi Liu, Fengxiu Zhou (), Jiayi Jiang and Huwei Wen ()
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Chunxi Liu: School of Mathematics and Statistics, Jiangxi Normal University, Nanchang 330022, China
Fengxiu Zhou: School of Economics and Management, Jiangxi Normal University, Nanchang 330022, China
Jiayi Jiang: School of Economics and Management, Jiangxi Normal University, Nanchang 330022, China
Huwei Wen: School of Economics and Management, Nanchang University, Nanchang 330031, China

Sustainability, 2025, vol. 17, issue 11, 1-32

Abstract: As critical strategic mineral resources underpinning high-tech industries and national defense security, rare earth elements have become a central focus of international competition, with their global industrial chain configuration deeply intertwined with geopolitical dynamics. Leveraging a novel multilateral database encompassing 140 countries’ geopolitical relationships and rare earth trade flows (2001–2023), this study employs social network analysis and temporal exponential random graph models (TERGMs) to decode structural interdependencies across upstream mineral concentrates, midstream smelting, and downstream permanent magnet sectors. Empirical results show that topological density trajectories reveal intensified network coupling, with upstream/downstream sectors demonstrating strong clustering. Geopolitical cooperation and conflict exert differential impacts along the value chain: downstream trade exhibits heightened sensitivity to cooperative effects, whereas midstream trade suffers the most pronounced obstruction from conflicts. Cooperation fosters long-term trade relationships, whereas conflicts primarily impose short-term suppression. In addition, centrality metrics reveal asymmetric mechanisms. Each unit increase in cooperation degree centrality amplifies the mid/downstream trade by 3.29 times, whereas conflict centrality depresses the midstream trade by 4.76%. The eigenvector centrality of cooperation hub nations enhances the midstream trade probability by 5.37-fold per unit gain, in contrast with the 25.09% midstream trade erosion from conflict-prone nations’ centrality increments. These insights provide implications for mitigating geopolitical risks and achieving sustainable governance in key mineral resource supply chains.

Keywords: geopolitical cooperation; conflict network; rare earth trade; industrial chains; temporal exponential random graph models (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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