China says rare earths practices meet WTO rules

China said Wednesday its regulation of the rare earths industry was in line with global trade rules, as it faces international pressure over its control of the crucial elements.

The United States, European Union (EU), Japan and Canada lodged a complaint with the World Trade Organization (WTO) in March, claiming Beijing was unfairly choking off exports of the commodities to benefit domestic industries.

China produces more than 90 percent of the world's rare earths, which are used in high-tech equipment from iPods to missiles, and has set output caps and export quotas on the coveted resources.

Gao Yunhu, vice director of the rare earths office of the Ministry of Industry and Information Technology, said its management of the industry was "in full compliance with WTO rules".

"China is willing to cooperate with relevant parties to resolve the issue at an early date," Gao told a news conference at the release of a white paper on rare earth use, protection and trade.

But he added: "China will actively use WTO rules to protect the legitimate rights and interests of the country."

The WTO said the case is now in the consultation phase, the first stage of dispute settlement in which the parties involved try to resolve the issue among themselves before resorting to litigation.

China has previously defended its practices, saying they aim to protect the resources and the environment as part of an effort to promote sustainable development.

The United States and others involved in the WTO case say China's export quotas unfairly restrict overseas sales.

China has so far granted companies the right to export 21,226 tonnes of rare earths this year, although such quotas are not always fully used. The government could also extend the limits.

In 2011, the government granted rare earth export quotas of 30,200 tonnes but only 18,600 tonnes were exported, Vice Minister of Industry and Information Technology Su Bo told the news conference.

According to the just-released policy paper, 56 percent of China's rare earth exports last year went to Japan and 14 percent to the United States. EU member countries accounted for at least 17 percent in 2011.

Su pledged that China would maintain supply to the international market, but Beijing hoped other countries would "share the responsibilities". He added China opposed attempts to "politicise" the issue.

"China opposes politicising the rare earth issue. China has never jockeyed for any economic or political interests," he said.

The country's rare earth industry was worth just over 80 billion yuan ($12.6 billion) last year, Su said.

Another official, director of the ministry's rare earths office Jia Yinsong, said China's rare earth reserves were 18.59 million tonnes in 2009 -- or 23 percent of the world's total -- denying foreign estimates of 36 percent.

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