Rare-earth cuts 'insufficient' (2)

09:07, December 30, 2010      

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The US Trade Representative's office expressed concern over the latest announcement following complaints it made to the World Trade Organization last week against China's trade policy.

The complaints spoke out against alleged "excessive government intervention" with the country's rare-earth policy being highlighted.

Japanese high-tech giant Sony blasted China's latest quota, calling it a hindrance to free trade and that it would work to reduce its reliance on the minerals, which are crucial to producing high-tech goods.

With a third of global rare-earth reserves, China now supplies about 97 percent of global demand. But its status as a major producer does not give it more control over global pricing, experts said.

Rare-earth manufacturers are too scattered in China, and domestic enterprises vie fiercely for limited market shares, which makes it difficult for China to command the pricing power of the resource on the international market, Chen with the CSRE said.

Wang Caifeng, a former official of the Ministry of Industry and Information Technology (MIIT) said Tuesday at a forum that a rare-earth industry association is expected to be established in May and that it would will assist exporters in pricing negotiations with international buyers.

It is reasonable for China to slightly adjust its rare-earth exports, given increasing domestic demand, Wang was quoted by cri.cn, a news portal.

A tougher environmental regulation for the rare-earth sector is also expected to be unveiled next year, which will pump in billions of yuan in investment to upgrade the industry's technology, according to Zhang Anwei, deputy secretary-general of the CSRE.

"Many small and medium-sized rare earth enterprises are not equipped with advanced technologies, leading to the loss of the resources and environmental pollution," Zhang told the Global Times.

"The regulation will strengthen industry supervision by weeding out certain companies and will relieve pressures from other countries that recklessly demand that China raise its export quota," Chen said.

Song Shengxia and Huang Jingjing contributed to this storySource: Global Times
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