Resource tax on rare earths in China: Policy evolution and market responses

Jianping Ge and Yalin Lei

Resources Policy, 2018, vol. 59, issue C, 291-297

Abstract: Rare earths (RE) are critical minerals that are used for economic development. Because it has become increasingly important and widely used, the resource tax has been implemented to solve the negative externality of RE exploitation in China. The resource tax on RE in China has evolved over time and includes three stages: 1) establishment (1993–2010), 2) quantitative changes (2011–2014); and change to a volume-based system and qualitative changes in the ad valorem system (2015 to the present). A computable general equilibrium (CGE) model was developed, and the results show that resource tax reforms would increase the price of RE and curb their production and demand. However, these theoretical market responses were short-lived in reality. For the resource tax reforms to have long-term effects, we must also consider factors such as illegal exploitation, the development of China's domestic RE downstream industries and the emergence of RE alternative products. Finally, additional policies should be formulated that are coordinated with existing policies regarding the resource tax.

Keywords: Resource tax; Rare earths; Volume-based tax; Ad valorem tax; China (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301420718301454
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:59:y:2018:i:c:p:291-297

DOI: 10.1016/j.resourpol.2018.07.016

Access Statistics for this article

Resources Policy is currently edited by R. G. Eggert

More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().