China has every right to impose rare earth export quotas

Edited and translated by People's Daily Online

The long-running dispute over China's export limits on rare earth minerals reached a new climax on March 14, when U.S. President Barack Obama, in a high-profile manner, announced that the United States, along with the European Union and Japan, has brought a trade case to the World Trade Organization over the rare earth dispute. This is the first WTO case against China jointly launched by the United States, the European Union, and Japan.

This is not the first time China has come into conflict with other countries due to the rare earth dispute. The country's quota policy on rare earth exports has received strong opposition from developed countries since its introduction in 2008. They have repeatedly demanded that China increase exports of rare earth minerals, and abolish the quota policy.

China has 36 percent of the world's total rare earth reserves, but its exports of rare earth minerals account for more than 90 percent of the world's total exports. It is unfair and unreasonable to ask the country to increase its already massive exports of rare earth minerals.

China has been the primary target of anti-dumping measures around the world, and many Chinese products have encountered discriminatory trade barriers set up by the United States and the European Union. Why are they demanding greater exports of rare earth minerals from China?

It is all because of the great value of rare earth minerals. Known as "gold for industries," these rare materials are strategic non-renewable resources, and are widely used in the metallurgy, machinery, chemical engineering, and aerospace sectors. However, China had long been selling these valuable resources for irrationally low prices. Certain developed countries that have considerable rare earth reserves have shut down their own mines, and imported large amounts of significantly undervalued rare earth minerals from China, leading to predatory exploitation of China's rare earth reserves.

Instead of getting due benefits from the exports of rare earth minerals, China has suffered severe environmental pollution from excessive exploration of rare earth reserves. Exports of rare earth minerals is a good deal for developed countries, but definitely unfair for China. Developed countries do not care about China's long-term development, environmental protection, or the interests of Chinese companies at all.

Every country has the right to protect its own resources and environment. China has every right to set a reasonable cap on its exports of rare earth minerals, as developed countries are doing the same thing to protect their scarce resources.

China's rare earth measures conform to both its domestic law and the WTO rules, and are implemented to regulate the exploitation, production, consumption, and export of the rare materials. China has adopted these measures for the purposes of reversing the unfair trade environment, consolidating its fragmented rare earth industry, and promoting the industry's healthy and sustainable development.

China's regulation of the rare earth industry is beneficial to both itself and other countries because a disorderly rare earth supply market cannot last long. At present, China should continue to improve its export control measures. In addition to the administrative means of imposing export quotas, it needs to make wiser use of fiscal leverage, a more market-oriented approach which is more in line with international practice.

Domestically speaking, this approach can help the Chinese government get more fiscal revenue, enabling it to put more effort into environmental improvement and the crackdown on the resale of export quotas. Internationally speaking, it will save the country a lot of trouble, and promote win-win cooperation between China and other countries.

Read the Chinese version at http://opinion.people.com.cn/GB/223228/17401411.html