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Evolutionary Analysis of The Global Rare Earth Trade Networks
Evolutionary Analysis of The Global Rare Earth Trade Networks
a r t i c l e i n f o a b s t r a c t
Article history: This study used social network analysis, spatial measurement, and network statistical anal-
Received 6 March 2022 ysis to study the relationships among countries in the global rare earth trade. Using data
Revised 2 May 2022
on rare earth products from the UN Comtrade database, the global rare earth trade net-
Accepted 11 May 2022
work and its evolving topological characteristics are analyzed for the period 1999–2020.
Available online 25 May 2022
Spatial correlation analysis using the global Moran index showed that countries tended to
Keywords: carry out rare earth trade with neighboring countries, and there were certain spatial ag-
Global rare earth trade gregations in the trade patterns. A temporal exponential random graph model (TERGM)
Social network analysis was used to analyze the influencing factors and evolution of the global rare earth trade,
Global Moran index and network motif analysis was used to analyze the influence of network topology on the
TERGM trading network structure. The results showed that the global rare earth trade model pre-
sented the following characteristics: trade from one core country to many other countries,
reciprocity between trading countries, and trade around near neighboring rare earth-rich
countries. Other factors, such as countries with the same GDP levels and World Trade Or-
ganization (WTO) member countries, influenced the global rare earth trade but not the
formation of the rare earth trade network. In examining the temporal dependence of rare
earth trade networks over a 22-year period, it was found that the linkages of rare earth
trade networks among countries remained relatively stable, pointing to the long-term de-
pendence of countries with scarce rare earth resources on resource-rich countries.
© 2022 Elsevier Inc. All rights reserved.
1. Introduction
Rare earth elements is a general term referring to 17 special elements, such as yttrium and lanthanum. Rare earth ele-
ments are of great importance to various countries and are widely used in industries such as machinery, energy, electronics,
chemicals, and metallurgy. Many countries and regions, including the US, the EU, and Japan, have introduced policies to
include rare earth resources in national strategic resource reserves. However, rare earth resources are different from certain
other widely used metal or oil resources. Rare earth resources are used on a smaller scale but have great significance in
industries such as communication, aerospace, energy materials, advanced weapons, and other high-tech industries. The US
Federal Geological Survey (USGS) reported in 2019 that total global rare earth resource reserves stood at about 120 million
tons. Reserves in China, Vietnam, Brazil, and Russia account for 88% of the world’s total rare earth reserves. The top three
producing countries are China, the US, and Australia while the main consumer markets are China and Japan, followed by the
US and Europe. In addition, the 2019 USGS data indicated that China’s rare earth output was 132,0 0 0 tons, accounting for
∗
Corresponding author.
E-mail addresses: yuguihai@mail.gufe.edu.cn (G. Yu), penggang2016@swufe.edu.cn (G. Peng).
https://doi.org/10.1016/j.amc.2022.127249
0 096-30 03/© 2022 Elsevier Inc. All rights reserved.
G. Yu, C. Xiong, J. Xiao et al. Applied Mathematics and Computation 430 (2022) 127249
about 63% of the global total. Although China’s share of rare earth production has declined in recent years, it remains the
world’s leading rare earth producer and exporter. Rare earth prices are primarily controlled by countries rich in rare earth
resources. For example, rare earth prices were low before 2011. However, China raised export prices by raising the resource
tax in 2011, which increased the price of rare earth resources across the world. In this context, in recent years, the US and
Australia have expanded their rare earth production to reduce their dependence on Chinese exports. With adjustments to
rare earth policies and continuous changes in output and demand, the international rare earth import and export trade will
also change significantly. In light of concerns about the global importance of rare earth resources and changes in rare earth
patterns, this study analyzed the evolution of the global rare earth trade from 1999 to 2020 using the complex network
theory.
With the introduction of small-world and scale-free network models [1,2], researchers have increasingly analyzed
complex-type data from the perspective of network science, which has become a new tool for complex economic sys-
tem phenomena. Many studies have used complex network analysis methods to model and analyze different commodity
trade activities. Garlaschelli et al., for example, analyzed the network structure of the world trade network and its evolu-
tion [3]. Fagiolo constructed a weighted world trade network and studied its topological characteristics [4]. Xu, meanwhile,
constructed unweighted and weighted international oil trade networks, compared the network topology, and analyzed the
change in network topology with the addition of trade volume; using those methods, that study was able to identify the
greatest effect on network structure entropy during the conversion of unweighted networks to weighted networks in com-
bination with the global rare earth trade [5]. Studying the evolution of energy trade networks in countries participating in
China’s Belt and Road Initiative (BRI), Ma et al. divided the network into imports and exports to consider network structure
entropy under different scenarios [6]. Li et al. studied the topology of the BRI trade network and found that it has the char-
acteristics of a rich club [7]. Xia et al. conducted a core–edge analysis of the global oil trade network in the evolution of
the competing dynamics of global oil flows but did not define a core degree threshold that distinguishes core, semi-edge,
and edge nodes [8]. Shao analyzed the spatial pattern of rare earth exports between China and the US but did not analyze
the spatial pattern from a global perspective [9]. In analyzing the international rare earth trade pattern, Wu chose network
density and centrality to analyze the topology of the trade network but did not fully consider the spatial pattern of trade
from the perspective of geographical location [10]. Studying the effects of various trade restrictions implemented by China,
Nabeel found that the global rare earth trade volume rose in 2011, and the key factor was China’s control over rare earth
prices [11]. Wang divided the global rare earth trade network into communities based on community spatial dynamics and
the role of major countries in the international rare earth trade; however, Wang did not consider the factors affecting the
formation of the global rare earth trade network [12]. Yang used an exponential random graph model (ERGM) model to
analyze the factors affecting investment networks in the BRI but only considered cross-sectional data and did not consider
the factors affecting network evolution using time series data [13].
In this paper we study the evolution of global rare earth trade network from 1999 to 2020 by employing temporal
exponential random graph model (TERGM). TERGM represents a generalization of the ERGM frame work to a temporal
series of static networks [14,15]. TERGM has been employed to analyze the time series data in some fields. Almquist and
Butts [16] used a special case of TERGM (Dynamic Network Logistic Regression) to implement decision theoretic models
for network dynamics in a panel data context. This method was used on a dynamic blog network sampled during the
2004 US presidential election cycle and shown to be powerful. Silk et al. [17] shown that TERGM have a powerful ability
to simulate network models of disease in animals, which network models often change over time. Cranmer et al. Kirkland
[18] used TERGM to study alliance formation and to evaluate their proposed network-theory of alliance formation. Warren
et al. [19] employed TERGM to analyze changes in social networks totaling 320,387 peer affirmations exchanged between
residents in three correctional therapeutic communities within weekly and monthly time-frames, one of which serves men
and two of which serve both men and women.
In summary, although the research on global trade is rich, there are gaps with regards to the global rare earth trade.
Existing studies have not considered the influence mechanisms of the global rare earth trade network from static or dy-
namic perspectives. Therefore, this study analyzed the evolution of various network indicators of the global rare earth trade
network from 1999 to 2020 using complex network analysis, aiming to understand the relative positions of countries in
the rare earth trade and grasp the overall situation and evolution. Specifically, using a temporal exponential random graph
model (TERGM) and network motif analysis, we analyzed the factors affecting the global rare earth trade network during
the 22-year study period.
2. Methodology
2.1. Data
Rare earth trade import and export data came from the UN Comtrade database. Among rare earth products, rare earth
metals and rare earth compounds account for a larger proportion [10]. Therefore, we chose rare earth products with HS code
2846 (rare earth metals and their mixed inorganic or organic compounds) and HS code 280,530 (rare earth metals, mixed
or fused) as the research objects. The research period was 1999–2020. Other data used in the spatial similarity analysis and
influence factor analysis were obtained from the CEPII database.
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In this study, countries involved in the rare earth trade were used as nodes to construct a global rare earth trade network
using actual trade data, defined as G = (N, E, W ).G is the global rare earth trade network, E denotes the set of all edges in
the network, and W is the set of the weight wi j (trade volume) of each edge in the network. The database contains data
reported from other countries, thereby introducing differences. This study adopted the principle of taking the largest value
for the treatment of weights [20].
When constructing the unweighted global trade network G, it was defined as G = (N, E ). A link is considered to exist in
the network if the trade volume wi j between two countries is not zero; otherwise, no link exists.
where ki is the degree of node i, and ai j , aik , and a jk are the corresponding values in the adjacency matrix. Then, the average
clustering coefficient is
Ci
C= .
n
Average clustering coefficient indicates the degree of overall grouping in the network. When the average clustering
coefficient of the network is higher, it indicates that the trend of grouping in the network is more obvious, and the nodes
are more connected.
Average path length is the average of the shortest distance between all of the nodes in the network. The smaller the
average path length of the network, the shorter the path from one node to another node in the network, and the easier it
is to reach another node from that node.
Degree centrality is a measure of a node’s contribution to the propagation process in a network. When a node has higher
degree centrality, it means the node’s role in the network is more important. The formula for calculating degree centrality
is
ki
CG (i ) = ,
n−1
where CG (i ) is the degree centrality of node i in network G, ki is the number of nodes associated with node i, n is the total
number of nodes, and n − 1 is the normalization of the metric.
Betweenness centrality CRBi refers to the extent to which node i is located on the shortest path between other node
pairs, reflecting the degree of control of the whole node for the network. Greater betweenness centrality indicates that the
node has a higher degree of control over the network and a higher transit function for trade transportation. The intermediary
centrality of the node is as follows:
n n
2 j k g jk (i )/g jk
CRBi = , j = k and j < k,
n2 − 3n + 2
where g jk (i )/g jk denotes the control capability of node over node j and node k, g jk is the number of shortest paths between
j and k, and g jk (i ) is the number of shortest paths between j and k that pass through i.
Core–periphery structures are commonly found in social networks, but there is no uniformly defined concept. The core–
periphery structure is usually divided into core, semiperiphery, and periphery [21]. Core nodes have stronger control and
influence in the network while semiperiphery and periphery nodes have weaker control and influence.
Network structure entropy E reflects the degree of order of the network. The greater the network structure entropy,
the closer the network is to disorder, meaning that the differences between the nodes are small, and the network is more
uniform. The smaller the network structure entropy, the greater the degree of order in the network, and the greater the
degree of difference between nodes; in this case, the network is more uneven. To calculate network structure entropy, first
calculate the importance of each node in the network Ii :
ki
Ii = n ,
i=1 ki
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Table 1
Part of the global trade network structure indicators, 1999–2020.
Year Nodes Edges Density Average clustering coefficient Average path length
where ki is the degree of node i, and ni=1 ki is the sum of the degrees of all of the nodes in the network. The expression
for the entropy of the network structure is
n
E = − Ii ln Ii ,
i=1
Network standard structure entropy Es reflects the heterogeneity of the network. The greater the entropy of the net-
work standard structure, the greater the heterogeneity of the network and the better the connectivity of the network. The
lower the entropy of the network standard structure, the lower the heterogeneity of the network and the poorer the con-
nectivity of the network, indicating that the relationships in the network are not homogeneous. The expression of network
standard structure entropy Es is
E − Emin
Es = ,
Emax − Emin
where Emax is the maximum network structure entropy, and Emin is the minimum network structure entropy. The maximum
network structure entropy when the network is completely uniform is Emax = ln n when Ii = 1n . The minimum network struc-
ture entropy when the network presents obvious orderliness is Emax = 12 ln 4(n − 1 ).
Network structure entropy is limited to the unweighted network. For weighted network, we employ network strength
entropy and standard network strength entropy. Network strength entropy can consider the strength of each node. Node
importance is expressed as
wi
Iiw = n .
i=1 wi
Network strength entropy and network standard strength entropy are
n
Ew = − Iiw ln Iiw ,
i=1
E w − Emin
w
Esw = .
Emax − Emin
w w
w
Emax is the maximum network strength entropy. When all edge weights are the same, and the network is completely uni-
form, Iiw = 1n , and the maximum network strength entropy is Emax
w = ln n. When the network and the other node weights
w = 0.
are 0, it indicates minimum network strength entropy, which is Emin
The blockmodel analysis method in social network analysis was proposed by White et al. [22]. Network structure infor-
mation allows for the chunking of nodes in the network and the analysis of location and roles after chunking. We first used
convergent correlations (CONCOR) to block the network according to structural similarities in the global rare earth trade.
Then, we analyzed the status and roles according to the relationships within and among the blocks (Table 1).
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3.1.3. Core-periphery
Three represents a core degree greater than or equal to 0.2, 2 represents a core degree greater than 0.1, and 1 represents
a core degree of less than 0.1. Countries with a core degree greater than or equal to 0.2 are defined as core countries, those
with a core degree less than or equal to 0.2 are defined as semiperiphery countries, and those with a core degree less than
0.1 are defined as periphery countries.
As seen in Fig. 3(a), the number of core countries in the rare earth trade network changes less, mainly stabilizing at
8–10 countries. As shown in Fig. 3(b), China (CHN), Germany (DEU), France (FRA), the UK (GBR), and the US (USA) have
all been core countries during the 22–year period. They are very important players in the rare earth trade network. The
overall upward trend in the number of semiperiphery countries indicates that more countries have become aware of the
importance of rare earth resources and have become actively involved in the global rare earth trade.
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Fig. 3. Core–Periphery.
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Table 2
Network structural entropy and network standard structural entropy.
Year Export network structure entropy Export standard structure entropy Import network structure entropy Import standard structure entropy
Table 3
Network strength entropy and network standard strength entropy.
Year Export network strength entropy Export standard strength entropy Import network strength entropy Import standard strength entropy
to be more disorderly than the import trade network after 2019, and the differences between countries in the rare earth
export trade were smaller. According to Fig. 6(b), the network strength entropy and network standard strength entropy both
increased during 20 07–20 09. Accordingly, the network tended to be disorderly compared with the previous period, and the
trade differences in rare earths among countries became smaller. This was mainly because the 2008 financial crisis led to a
recession in the US and in the global real economy, and imports and exports of rare earths decreased. Then, in 2010, imports
and exports returned to pre-2007 levels, and trade differences returned to the previous level.
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and 32 others formed the fourth block. In the other two years of analysis, the composition of all four panels changed, with
the most significant changes in the first, third, and fourth blocks. The number of countries in the third block increased to 70
in 2011, with countries such as Canada, Australia, and India moving from the fourth block to the third block and countries
such as Brazil and Argentina moving from the first block to the third block. In 2020, the number of countries belonging to
the second block decreased to 53, countries such as Chile and Sweden moved from the third block to the fourth, and the
number of countries in the first block decreased from 35 to 22.
In 1999, the first, second, and fourth blocks pointed to the third block, indicating that the third block was the core block
of the rare earth trade, importing rare earths from the other three. There was a self-loop in the third block, indicating
that there was also trade between the member countries of the third block. Meanwhile, there was a self-loop in the fourth
block, which included Australia, Canada, and other countries with rich rare earth resources. These countries also exported
rare earths to countries in the second block while conducting trade activities within the block. In 2011, the image matrix
of the four blocks was in line with the image matrix of the centralization trend proposed by Liu [22]. Germany, Australia,
Canada, Brazil, and other countries rich in rare earth resources or manufacturing joined the second block while the US
introduced policies banning rare earth mining. China increased the export tax on rare earth resources in 2011 to transform
itself from an exporter to an importer. Therefore, the rare earth trade activities of each block revolved around the second
block, reflecting the concentration trend of trade activity. The structure of rare earth trade in 2020 was the same as in
2011, and trade activity revolved around the second block. This was mainly because major rare earth trade countries such
as China, the US, and Germany were all important countries in the trade network and had a stronger degree of control over
rare earth resources. Those countries all moved from each plate to the second block after 2011, such that the rare earth
trade became concentrated in the second block.
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Fig. 7. Blockmodel analysis and image matrices of global rare earth trade network.
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Table 4
Spatial correlation of global rare earth trade imports and exports.
Import Export
Global Moran’s I is used to study global spatial correlation. This refers to testing the existence of positive, negative, or
mutual independence among geographically close neighbors in a study area. It is expressed as follows:
n n
n i=1 j=1 wi j (xi − x̄ )(x j − x̄ )
Moran = n n n ,
i=1 (xi − x̄ )
2
i=1 j=1 wi j
where n is the number of countries involved in the rare earth trade, xi and x j are the spatial attribute values of i and j (i.e.,
the rare earth imports and exports of i and j), x̄ is the average of the spatial attribute values, and wi j is the spatial weight
value in the spatial matrix [23].
The rook nearest-neighbor space matrix was chosen for Moran’s I calculation. The wi j in the spatial matrix is defined as
follows:
1, i and j have a common boundary
wi j = (1)
0, else.
Moran’sI takes a value of [−1, 1], and the results are divided into three cases:
−1 ≤ Moran < 0, negative correlation
Moran’s I = 0, no spatial correlation (2)
−1 < Moran ≤ 1, positive correlation.
When Moran’s I is closer to 1, it means there is a high spatial aggregation of rare earth trade relations between countries.
The closer the value is to -1, the more spatially dispersed the rare earth trade relations between countries are.
According to Table 4, in the global rare earth import trade, the calculated global Moran’s I was greater than 0. This
indicated the spatial aggregation of similar attribute values in the rare earth import trade of each country. The large value
in 2013 indicates that the spatial aggregation phenomenon of global rare earth import trade was the most obvious in 2013.
The coefficient decreased significantly after 2016, indicating that the spatial aggregation phenomenon weakened after 2016,
and the import trade of rare earths by countries tended to be more globalized. The Moran’s I of the rare earth export
trade of each country only passed the 0.1 significance level test in 2007, 2011, 2012, 2013, 2014, 2016, and 2020. This was
mainly because rare earths are natural resources that cannot be manufactured artificially, there were differences in rare
earth holdings among countries, and many restrictions were added to rare earth exports for various reasons. Therefore,
most countries did not show spatial aggregation.
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5.1. Factors affecting the evolution of the global rare earth trade network structure
where c is the normalization constant, and H is the variable affecting network formation. H can be divided into endoge-
nous network structural effects, actor-relationship effects, and network covariate effects. gH (y ) is the variable expression,
θH is the variable coefficient, and θ is the vector of θH composition. The Markov chain Monte Carlo maximum likelihood
estimation (MCMC MLE) method was mainly used to test the model. The model parameter estimates were stabilized by
continuous simulation and the parameter correction of the model.
(2) Temporal Exponential Random Graph Model (TERGM)Let the set of nodes in the network at moment t be Vt and the
set of edges be Et . The network at this moment is Gt = (Vt , Et ). A particular network structure at moment t is yt . Using
the discrete-time Markov chain (DTMC), define the k-order DTMC-related TERGM model. The structure of the network at
period t is only related to the previous k-period network structure [26]. We then get the definition as follows:
exp( θH g(yt , yt−1 , . . . , yt−k ))
P (Y t = yt |Y t−k , Y t−k+1 , . . . , Y t−1 , θ ) = H
.
c (θ , yt−k , . . . , yt−1 )
When k = 1,
exp( θH g(yt , yt−1 ))
P (Y t = yt |Y t−1 = yt−1 , θ ) = H
.
c (θ , yt−1 )
The joint probability distribution of multiple networks when k = 1 is
T
P (Y t , Y t−1 , . . . , Y 2 |Y 1 , θ ) = P (Y T |Y T −1 , θ ).
t=2
In terms of variable selection, TERGM is similar to ERGM in that it mainly includes endogenous network structural ef-
fects, actor-relationship effects, and network covariate effects. TERGM, however, considers the influence of the network
in historical periods, so there are also time-dependent variables, such as autoregression, stability, and innovation.
5.1.3. Variables
In our TERGM-based analysis of the evolution of the global rare earth trade network structure and the influencing factors,
the dependent variable was the global rare earth trade network for 1999–2020. The independent variables were divided into
endogenous network structural effects, actor-relationship effects, network covariate effects, and time-dependence effects.
Table 5 lists the variable.
The endogenous structure of the network indicates the structural characteristics of the dependent variable network itself.
Two variables—edge and reciprocity—are chosen, with reciprocity reflecting whether the countries in the network trade with
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Table 5
Variables selected for TERGM.
each other in rare earths. Actor-relationship attributes indicate each country’s own attributes in the dependent variable
network. We chose country GDP as the country’s own attributes and chose emitting effect, receiving effect, and congruence
as the variables of actor-relationship attributes to study the influence of each country’s GDP on the formation of global rare
earth trade relations. Actor-relationship attributes indicate each country’s own attributes in the dependent variable network.
We chose country GDP as the country’s own attributes and chose sender, receiver, and homophily as the variables of actor-
relationship attributes to study the influence of each country’s GDP on the formation of global rare earth trade relations.
Network covariate effects indicated whether the linkages of individual countries in other networks affected the linkages in
rare earth trade networks. Three network covariates were selected to investigate whether there was an effect on the global
rare earth trade. The first network covariate was the geographic proximity network, where two countries were considered
linked if they were geographically close to each other. The second network covariate belonged to the same WTO network,
where two countries were considered to be linked if they both belonged to the World Trade Organization (WTO). The third
network covariate was the same-continent network; two countries were considered linked if they belonged to the same
continent (Asia, Africa, Oceania, North America, South America, Europe, Antarctica).
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G. Yu, C. Xiong, J. Xiao et al.
Table 6
Results obtained using TERGM analysis.
Variables Model A1 Model A2 Model A3 Model B1 Model B2 Model B3 Model C1 Model C2 Model C3
Homophily (GDP mid) 0.39∗ 0.39 0.39 0.71∗ 0.71∗ 0.71∗ −0.03 −0.03 −0.03
[0.00;0.85] [−0.01;0.92] [−0.02;0.83] [0.56;0.87] [0.56;0.88] [0.56;0.89] [−0.14;0.07] [−0.15;0.07] [−0.12;0.09]
Homophily (GDP high) −0.27 −0.27 −0.27 −0.66∗ −0.66∗ −0.66∗ −0.16∗ −0.16∗ −0.16∗
[−0.83;0.15] [−0.88;0.21] [−0.82;0.16] [−0.77;−0.54] [−0.79;−0.54] [−0.78;−0.54] [−0.28;−0.05] [−0.30;−0.07] [−0.27;−0.06]
Network covariate effects
Edgecov (proximity) 0.98∗ 0.98∗ 0.98∗ 0.98∗ 0.98∗ 0.98∗ 0.73∗ 0.73∗ 0.73∗
[0.82;1.16] [0.81;1.14] [0.83;1.15] [0.89;1.08] [0.90;1.07] [0.90;1.07] [0.57;0.90] [0.54;0.92] [0.55;0.90]
exports to various other countries. The homophily of high-GDP countries in the three periods changed from insignificant in
the first period to significant in the second and third periods. The coefficients were increasing in sequence, indicating that
the rare earth trade transactions between high-GDP countries did not become one of the reasons for the formation of the
rare earth trade network during 1999–2006. The trade transactions between high-GDP countries became a reason for the
formation of the rare earth trade network in the subsequent period. However, the estimated coefficient was negative, indi-
cating a negative effect on the formation of trade networks. This suggested that reducing trade among high-GDP countries
and increasing rare earth trade with medium- and low-GDP countries is needed to increase the positive effect on global
rare earth trade networks.
Analyzed from the perspective of time-dependent effects, the autoregression variable checks whether the edges of the
previous network will be transferred to the current network. As shown in Table 6, the estimated coefficients increased se-
quentially, from negative estimated coefficients in the initial period to positive coefficients in the next period. This indicated
a gradual stabilization of trade relations between countries in the global trade network. The stability variable tested whether
both the edge and nonedge of the previous year and the current network were stable. The core and edge countries of the
rare earth trade network were relatively stable from the estimated coefficients for 1999 to 2020. Since rare earths are natu-
ral resources, countries rich in rare earth resources played core roles in the network. Countries lacking rare earth resources
must import to obtain rare earths. The innovation variable checked whether there was an increase in rare earth trade re-
lations among countries based on the previous year. The estimated coefficient of this variable decreased sequentially from
1999 to 2020. The estimated value changed from positive to negative at the beginning. This indicates that countries were
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exploring different rare earth trade patterns during 1999–2006 and gradually stabilized after 2007. Although the countries
showed decreases in rare earth trade volume following the 2008 crisis, the trade relations had always existed.
5.2.1. Method
The associations between nodes in a network are represented by links. The edge in a directed network, which represents
the most direct relationship between two nodes in the network, is denoted R = i, j; ei j or R = i, j; e ji , which belong to
the binary motifs in the network. Local motif impact analysis examines whether the network subgraphs formed by adding
nodes or edges to the set of the above basic relationships will have an effect on the network structure.
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We mainly analyzed the ternary motifs in the rare earth trade network, which is a microcosm of rare earth trade rela-
tionships between countries. We studied the ternary motifs in the network based on the characteristics of different motifs
using the Rand–ESU algorithm in FANMOD [27].
In Table 7, these five ternary motif relationships are presented as the most obvious manifestation of multilateral trade.
The change in the number of each local motif relationship in the rare earth trade network is a direct result of the trade
relationships in the network, thus indicating the effect of various types of trade relationships on the trade network.
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Table 7
The ternary motif structure mainly appears in the network.
Table 8
Frequency of each ternary motif structure.
1 2 3 4 5
Structures 4 and 5 mainly reflect trade relationships that are reciprocal. Structure 4 is significant for 12 years. Fig. 12a)
shows the increase in Structure 4 after 2008, with the most significant rise seen in 2019. This indicates that economic
globalization between 2013 and 2019 pushed countries to trade in rare earths. Structure 5 has an impact on all 22 years. As
such, reciprocity was one of the main relationships in the rare earth trade. Structure 5 in Fig. 12b) declines slightly because
of the financial crisis in 2008. However, the promotion of economic globalization after 2010 led to the recovery of bilateral
trade relations between countries above the pre-crisis level. The amount of reciprocal trade between countries began to
diminish after 2019. As a result of protectionist trade policies proposed by some major rare earth importing and exporting
countries, the volume of international bilateral trade in global rare earths decreased significantly.
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G. Yu, C. Xiong, J. Xiao et al. Applied Mathematics and Computation 430 (2022) 127249
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G. Yu, C. Xiong, J. Xiao et al. Applied Mathematics and Computation 430 (2022) 127249
6. Conclusion
This study investigated the global rare earth trade from 1999–2020. The following conclusions were obtained based on
network analysis, spatial econometrics, and statistical methods applied to network data.
Social network analysis revealed a trend of gradually increasing trade relations among countries regarding rare earth
resources, reflecting the importance of such resources in each country. The global rare earth trade has gradually become
a small world, meaning that trade has centered on countries with abundant rare earth resources. Furthermore, centrality
analysis indicated that China, Germany, the US, and the UK belonged to the trading center, whether for imports or exports,
and had strong control over the whole rare earth trade network. Accordingly, the aforementioned countries are rich in
rare earth resources and have high levels of rare earth processing and manufacturing. The core–periphery analysis showed
that the number of countries at the core of the rare earth trade network increased year by year, again highlighting the
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importance countries have attached to rare earth resources. The analysis using the entropy method revealed that trade
differences between countries were decreasing. This indicated that countries have been importing rare earth resources to
become national resource reserves.
Spatial correlation analysis based on global Moran’s I showed spatial aggregation in countries’ imports of rare earths.
This revealed that countries preferred importing rare earth resources from countries that are closer to them. After 2016, the
spatial aggregation of rare earth imports weakened year by year. This indicated that surrounding countries could no longer
meet their own demand for rare earth resources and thus imported rare earths from countries farther away.
Regarding the mechanisms influencing the formation of rare earth trade networks, during the 22-year study period,
trade relations mainly revolved around a few countries that exported to other countries, and there were reciprocal relations
between several countries. Thus, we can see that rare earth trade relations were formed mainly between countries lacking
rare earth resources and nearby countries with abundant resources or with developed rare earth manufacturing industries.
Germany, for example, has a strong manufacturing industry, and nearby countries trade with Germany for finished rare
earth resources. Regarding the reasons for the formation of rare earth trade networks from 1999 to 2020, TERGM revealed
that, after the 2008 financial crisis and the 2011 spike in rare earth prices, domestic economies were boosted by increasing
rare earth exports to various countries to facilitate rapid economic recovery. The rare earth trade network from 1999 to
2020 was relatively stable because of the unproducible nature and importance of rare earths, which make rare earths a hot
resource, and countries compete to import from countries rich in such resources.
As global rare earth reserves continue to decrease, the advantages of countries rich in rare earth resource endowments
are gradually declining. To enhance the status of countries in the international rare earth trade, countries should adopt all-
round, multilevel rare earth strategies, optimize their own rare earth industrial structures, improve trade policies, establish
rare earth reserve systems, and strengthen rare earth R&D technologies.
Funding
Guihai Yu was supported by National Natural Science Foundation of China (11861019), Guizhou Talent Development
Project in Science and Technology (KY[2018]046), Natural Science Foundation of Guizhou ([2020]1Z001). Peng Gang was
supported by the China Youth Project of National Social Science Fund in China (18CTJ005).
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