When China's rare earth elements can become rare?

China's management of rare earth minerals has once again become the focus of media agencies from China and abroad. Rare earth minerals, as a strategic resource, have a very important strategic value. China has more than 85 percent of global reserves of rare earth resources and the production of rare earth materials in 2009 stood at 150,000 tons, which is far more than the world market demand of 100,000, but export prices remain very low.

In international bulk commodity markets, there is a strange phenomenon. The prices of commodities such as petroleum, coal and iron ore were extremely low when China was in the export stage, while the prices would surge by dozens of times when it changed to an importer. While the United States, rich in rare earth resources, closed its rare earth mines, Japan, poor in resources, bought rare earth minerals from China wantonly and then buried them in the sea to prepare for use in the next few years.

Currently, China's rare earth reserves account for less than 30 percent of the global share. If we cannot take effective management, once China becomes a net exporter of resources in the future, it will lose exponentially larger sums of money. And much more likely, China will be controlled by Western countries strategically. Why must China sell its rare earth resources so cheap?

Internationally, the United States and other Western countries tried to undermine China's strategic advantage through consumption of rare earth resource in order to contain China's peaceful development. They used various means to manipulate the prices of rare earth resources. The allowed consumption to go unchecked and even stockpiled them.

In addition, faced with China's increasingly strict management of rare earth resources, some large enterprises in Western countries even managed to escape the supervision of China's policies. They set up joint companies with domestic rare earth enterprises and participated in the exploitation of rare earth minerals or they controlled Chinese enterprises by acquisitions.

Domestically, the reasons are complicated. First, for a long time, China had not fully realized the value of rare earth resources and had blind optimism about its large share of the resources. Second, disasters in the exploitation of the minerals led to serious waste and environmental degradation. Third, smuggling of rare earth minerals was rampant due to the decrease in export quota. It is estimated more than 20,000 tons of rare earth minerals were exported illegally in 2009, accounting for one-third of the total exports.

Therefore, China must take various efforts to reverse the current situation of rare earth minerals in production, sale, export, research and development, and strengthen the control capability over the strategic resources in order to provide strong protection for the country's long-term stability and sustainable development.

By People's Daily Online and its author is Li Bing with CPC School