Beijing’s creation of an industry association for rare-earths producers is best seen as an bulwark against the WTO complaint brought jointly by the U.S., the EU and Japan. This holds that China’s export quotas and other controls on rare-earths mining are not, as they purport to be, for environmental and sustainability reasons, but a pretext for protectionism as they drive up prices and favor end users that buy rare earths inside China, a provision intended to anchor in China manufacturers that are heavy users of rare earths, including high-tech, defense and green-technology firms. Beijing rejects the charge.
The new 155-member strong Association of China Rare Earth Industry, reporting to the Ministry of Industry and Information Technology, is charged with setting reasonable prices and properly handling trade disputes, as well as promoting the sustainable use of the minerals and environmental controls. The first two seem directly targeted at the WTO complaint, as were suggestions that China plans to abandon large-scale mining of the minerals.