Rare earths are increasingly important for some high-tech products such as smartphones and hybrid cars. China is the world’s largest producer and consumer of rare earths, accounting for 90 per cent of the world’s supply of all rare earths. In 2011, China has been criticised for curbing rare earth exports, and in 2011 it exported 16,900 tonnes of rare earth, down 58 per cent from year ago. It consumed about 83,000 tonnes, against global demand of 110,000 tonnes in 2011, according to an industry estimate.
Beijing opposes WTO report said to accuse its rare earths policy of breaking trade rules
China said on Friday it opposes the release of a WTO report about its export curbs on rare earths – exotic minerals used in mobile phones and other hi-tech products – following news accounts that the document accuses Beijing’s policy of being a trade violation.
The report by World Trade Organisation experts is not a final ruling and leaks would violate the trade body’s rules, the Commerce Ministry said in a statement. It gave no details of the report.
Japan’s Jiji Press news agency and Britain’s Financial Times, citing unidentified officials, have said the report sides with the United States, the European Union and Japan. In a March last year complaint to the WTO, they said export curbs improperly favour Chinese domestic manufacturers in violation of Beijing’s free-trade commitments.
China has about 30 per cent of global deposits of rare earths but accounts for more than 90 per cent of production. It alarmed foreign companies by limiting exports in 2009 amid efforts to build up domestic manufacturers to capture more of the profits that go to producers of mobile-phone batteries and other products.
Chinese officials have expressed hope foreign companies that use rare earths will shift production to China and give technology to local partners.
The case is “in the WTO dispute panel hearing stage, and according to WTO rules, the panel’s hearings are not disclosed”, the ministry statement said.
“Any leak of the report circulated to the members before the panel hearing would be suspected of violating WTO rules,” it said.
Rare earths are 17 minerals used to make products including hybrid cars, weapons, flat-screen TVs, mobile phones, mercury-vapour lights and camera lenses.
Beijing has also tightened control over its rare earths industry by pushing companies to merge into state-owned groups and forcing smaller producers to close.
The trade restrictions are especially sensitive at a time when governments are trying to boost exports to reduce high unemployment. The United States and Europe are looking to increase sales of hi-tech goods that include products made with rare earths.
“China has repeatedly stressed that China's policy objective is to protect resources and the environment and achieve sustainable development and that it has no intention of protecting domestic industries in a way that distorts trade,” the ministry statement said.
Beijing’s export curbs pushed up rare earths prices on global markets. That prompted foreign producers to announce plans to reopen or develop mines in California, Canada, India, Russia and elsewhere.