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People's Daily Online>>China Business

China's measures on rare earth fair, legitimate

By Wu Liming (Xinhua)

15:59, March 14, 2012

BEIJING, March 14 (Xinhua) -- The United States, the European Union (EU) and Japan filed complaints on Tuesday with the World Trade Organization (WTO), charging that China is unfairly limiting its rare earth exports.

On the same day, U.S. President Barack Obama, in a high-profile manner, defended the move against China.

The WTO case, first of all, was aimed to maintain an irrational global supply chain of rare earth at the cost of China.

Rare earth metals are strategic non-renewable resources.

China is contributing tremendously to the rare earth industry. China has 36 percent of the world's total reserves, but accounts for some 90 percent of the world's total output.

China's rare earth measures, including imposing export quotas, are fair and legitimate, and are simply aimed at protecting its environment as well as its natural resources. They also conform to relevant WTO rules.

For a long time, disorderly mining of rare earth has been blamed for environmental damage in rare-earth-rich regions across China.

Take southern part of central China's Jiangxi Province for example, it cost the local government some 38 billion yuan (about 6 billion U.S. dollars) to restore and recover local ecological system because of excessive rare earth exploitation.

Two years ago, in order to control environmental damage and protect resources, China suspended the issuance of new licenses for rare earth prospecting and mining, imposed production caps and export quotas, and announced tougher environmental standards for rare earth production.

Another fact is that the irrational exploitation of rare earth in China had led to underestimation of the values of rare earth. It is strange that the Western world has never launched "anti-dumping" measures against China's rare earth products as they have, more often than not, done to other China-made products, such as shoes, shirts and tires.

According to the Washington Post, in the early 1990s, the United States was still in the lead in global rare earth supply market, but later the country, which owns 13 million tons of reserves, one of the world's biggest, decided to stop rare earth production, including a major mine in California.

Therefore, it is crystal clear that Western countries are aiming at pressing China to continue providing irrationally cheap rare earth despite serious pollution problems.

The political factors behind the moves also should not be neglected.

As the U.S. presidential election is approaching, President Obama is under huge pressure because of a still sluggish U.S. economy.

By playing the "China card," Obama perhaps is aimed at alleviating his pressure from home and his political opponents as well.

All in all, China's current rare earth policy is not designed to disrupt the world's logical demands.

It is only trying to take China's rare earth industry back to the path of healthy and sustainable development.

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