BEIJING (dpa) – China has scrapped its quota system for exports of rare earths minerals after a World Trade Organization ruling last year said the restrictions hampered free trade, Chinese state media reported Monday.
Details on the change was first included in the Ministry of Commerce’s trade guidelines for 2015 released at the end of December, according to Shanghai Securities News.
Exports of rare earths will require a licence issued according to trade contracts but there will be no restriction on amounts sold abroad, according to the online Ministry of Commerce statement.
Beijing had earlier argued it wanted to protect its natural resources but the WTO disagreed that Beijing’s measures serve this purpose and said China was simply hoarding these materials for its own manufacturers.
China accounts for more than 90 per cent of global production of rare earths, which are key materials for making electronics, cars or medical equipment.
The materials, which include tungsten and molybdenum, are also used in making clean energy products: hybrid car batteries, wind turbines and energy-efficient lighting.
The European Union, the United States and Japan had filed the WTO case in 2012, complaining that China had drastically reduced its export quotas and “caused a spike in world prices” and disruption to the world market.
US manufacturers had been paying three times more for these commodities than their Chinese competitors, putting China’s domestic manufacturers at a price advantage.
Rare earth prices have a big influence on production costs of some products such as LCD displays, where they make up as much as 60 per cent of the cost, according to EU data.