The Chinese government has set up a new association for companies in the rare earth industry which will be tasked with promoting development and handling international trade disputes in the increasingly fractious sector.
State-run Xinhua reported on Sunday that the body will feature 155 members including heavy weights such as the Aluminum Corporation of China and China Minmetals Corporation, and be governed by the Ministry of Industry and Information Technology (MIIT).
China has a 97 per cent global market share of rare earth materials,which are used to manufacture a range of IT kit from hard drives to plasma displays. President of the Chinese Society of Rare Earths, Gan Yong, will be president of the new association. He reportedly claimed that the body would help to “form a reasonable price mechanism” at a time when China is being accused of deliberately forcing up prices by strangling exports.
The US, EU and Japan have all filed complaints to the World Trade Organisation arguing that China’s export restrictions are unfair and could severely affect the global supply chain for countless products.
Some critics have argued that China’s end goal is to drive up export costs to the point where technology manufacturers are forced to relocate their plants within the People’s Republic – providing the Chinese economy with a massive boost.
The signs of a resolution don’t look good though, with China last month announcing that it will actually cut back on rare earth mining for environmental reasons.
Alluding to the commitment, Gan promised that the new association would be responsible for making the country’s rare earth mining industry more eco-friendly.
He also pointed the finger at other nations, intimating that many are stockpiling rare earths and therefore putting too great a burden on China.
“Many countries in the world have rare earth reserves, you cannot rely on China alone to provide all the supplies," he reportedly said. ®