China Sets Up Rare-Earths Group to Boost Sector, Assuage Trading Partners' Anger

The United States, the European Union and Japan last month lodged a complaint with the World Trade Organization, saying China is choking off exports of rare earths to unfairly benefit domestic industries.

China has set up a rare-earths industry group, the government said Monday, in a bid to streamline the sprawling sector and fend off complaints about Beijing's seemingly monopolistic control.

The United States, the European Union and Japan last month lodged a complaint with the World Trade Organization, saying China is choking off exports of rare earths to unfairly benefit domestic industries.

China, a producer of more than 95% of the world's rare earths -- which have a wide range of applications in the military and technology sectors -- has set output caps and export quotas on the coveted resource.

The Association of China Rare Earth Industry, composed of 155 members, was established Sunday in Beijing, according to the Ministry of Industry and Information Technology, which supervises rare-earths development.

In a statement, Vice Industry Minister Su Bo said the group will promote "healthy development" of the sector and urged firms to strictly follow government production plans.

China has defended its management of the rare-earths industry, saying its measures aim to limit harm to the environment from excessive mining, while meeting the country's surging domestic demand.

Separately, the new head of the industry group said the association will "properly" handle trade disputes, the official Xinhua news agency said, but gave no further details.

Gan Yong, who also is an academic at the Chinese Academy of Engineering, said the group will create a "reasonable" price mechanism, according to the Xinhua report.

Members of the group include industry giants such as China Minmetals and aluminum producer Chalco.

China's trading partners complain Beijing has deliberately sought to drive up prices and force foreign companies to relocate to the country for access to rare earths.

China has set its 2012 export quota for rare earths at around 30,000 tons, roughly the same level as 2011.

Copyright Agence France-Presse, 2012

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