China plans to appeal the World Trade Organization's ruling that its restriction on rare earth exports violates global rules, said Shen Danyang, spokesman of ministry of Commerce, on April 17. China will spare no efforts in appealing, but whatever the result, China's policy of protecting its resources and its environment is not going to change.
Many countries have long blocked rare earth mineral exploitation for environmental reasons. According to a 2012 white paper, Situation and Policies of China's Rare Earth Industry, China meets more than 90% of the rare earth mineral demand in the global market, even though its reserves account for just 23% of the world’s total. China’s contribution is not properly recognized, and it now finds itself accused of protectionism by the WTO.
Long-term rare earth mineral supplies at a low price
Rare earth minerals are a precious and non-renewable resource, used in a range of crucial technologies such as missile-defense systems. They have been dubbed "industrial gold".
The United State and some European countries have rich resources of rare earth minerals, but they stopped exploitation long ago and now purchase from China. Japan uses only one-third of its imported rare earth minerals for manufacturing, and stockpiles the rest.
In contrast to other countries which neither exploit nor export rare earth minerals, China has been a rich source of rare earth minerals for other countries at low prices. But excessive and large-volume exploitation has caused serious environmental problems such as polluted water and desertification in some parts of China. In recent years, the Chinese government has responded by adopting a series of measures, including export quotas, to ensure ecological protection and managed exploitation.
China's export restrictions have upset a number of overindulged countries that have become accustomed to enjoying low prices over a long period. In March of 2012, the United States, the European Union and Japan teamed up to lodge a complaint to the WTO about China's restrictions on exports of tungsten and molybdenum. In late March of this year, the WTO ruled that China was in breach of WTO rules.