Mechanisms of demand shortage risk propagation in the multi-layer trade network of global tungsten industry chain

Abstract

[Objective] Tungsten plays an irreplaceable role in new energy, intelligent manufacturing and national defense and military. The novel coronavirus outbreak and other emergencies have led to a reduction in the demand for tungsten ore in various countries (regions). Clarifying the dynamic transmission mechanism of the risk of trade demand shortage in the tungsten industry chain trade provides decision-making support to avoid risks and ensure the security of tungsten resource supply in China. [Methods] Based on the complex network analysis method and the infectious disease model, this paper constructs the global tungsten industry chain trade network risk transmission model, and simulates the risk impact degree and transmission path in the multi-layer trade of tungsten industry chain when the risk of trade demand shortage occurs in the top 5 countries with China’s export trade dependence. [Results] (1) Under the impact of different demand risks, the avalanche scale of the tungsten industry chain trade network is quite different, but the overall trend is a step downward. With the intensification of the demand shock, the impact of the crisis gradually shifted upstream, and the number of affected countries gradually increased. (2) Tungsten industry chain trade network risk communication belongs to a “minority impact” phenomenon, showing the characteristics of “both robust and fragile”. That is, when key trading countries such as the United States, the United Kingdom (upstream), Germany (midstream), and Thailand (downstream) are affected by demand shocks, the network is vulnerable, while non-key trading countries are affected by demand shocks, which have little impact on other countries. (3) For China, tungsten upstream is mainly affected by the direct impact of the United Kingdom (intra-layer transmission), the United States and Germany (inter-layer transmission) and the indirect impact of Japan, Korea and the Netherlands (inter-layer transmission). Tungsten middle is mainly affected by the direct impact of Japan (intra-layer transmission) and the indirect impact of the United States and Germany (intra-layer transmission), the United States, Indonesia and Thailand (inter-layer transmission). The downstream is mainly influenced indirectly by the United States (intra-layer transmission). [Conclusion] In summary, strive to promote the diversification of China’s tungsten resource export trade, pay attention to the policies of important trading countries and the changes in supply and demand, and pay attention to the internal links between the industrial chain, constantly improve the safety review and risk assessment of tungsten resource supply chain, deepen global supply chain cooperation and improve the strategic reserve system of tungsten resources, are effective ways to promote the sustainable development of China’s tungsten industry and implement precise risk management.

Keywords

• tungsten industrial chain|demand shortage|trade dependence|complex network|risk propagation|global trade