Beijing has established a rare earths industry
association to regulate the sector and help respond to trade complaints,
government officials announced earlier this week. The move comes a month after
the US, Japan, and EU launched a WTO challenge against China’s export
restrictions on rare earths.
China’s Ministry of Industry and Information
Technology (MIIT) announced the group’s creation on Sunday 8 April. The new
association will coordinate mining, smelting, and processing and work to form a
“reasonable price mechanism” for the precious materials.
It also confirmed that the 155-member association,
which will report to the ministry, would help coordinate China’s responses to
trade complaints regarding rare earths.
The new group was formed to promote sustainable
development of the sector, Su Bo, an industry vice minister, told state-run
news agency Xinhua.
The association also plans to provide support for
relevant departments and local governments, assist in maintaining order in the
sector, and facilitate exchange and co-operation between enterprises for the
purpose of fostering innovation, according to Xinhua.
WTO dispute in the background
China has imposed strict environmental standards
and export quotas on rare earths in recent years, with Beijing arguing that
such restrictions are necessary to mitigate the environmental damage caused by
the rare earths extraction process.
However, Beijing’s policies have sparked protests
from the EU, Japan, the US, and others that rely on rare earth supplies from
China, who argue that the restrictions offer Chinese competitors an advantage
by providing them with cheaper and easier access to the elements compared with
foreign manufacturers.
A WTO complaint from Brussels, Tokyo, and
Washington is currently at the consultations stage at the global trade body,
which is the first step in the dispute settlement process.
The 17 controversial rare earth elements cited in
the WTO challenge have unique magnetic, heat resistant, and phosphorescent
properties and are crucial to the manufacturing process of many high-tech and
green energy products, including wind turbines, engines for electric and hybrid
vehicles, flat-screen televisions, mobile phones, and medical equipment.
China accounts for about 97 percent
of global output of rare earth materials, according to EU estimates,
maintaining a near-monopolistic control over the sector.