China Opposes Release of WTO's Rare Earths Report Favouring US, Japan and EU

China has opposed the publication of a World Trade Organisation (WTO) report that alleges Beijing's policy of imposing curbs on the export of rare earths is a violation of trade principles.

The United States, Japan and the European Union had complained to the WTO in 2012 over unfair restrictions on the export of rare earths imposed by Beijing. Such restrictions helped Chinese manufacturers by denying other countries access to the exotic minerals, said the complaint.

Unnamed officials said the WTO's findings based on the complaint were favourable to the US, Japan and the EU, according to the Financial Times.

China opposed publication of the report and the case is in the WTO Dispute Panel hearing stage. According to WTO rules, the panel's hearings are not disclosed.

China's ministry of commerce said in a statement: "Any leak of the report circulated to the members before the panel hearing would be suspected of violating WTO rules."

China's rare earth policy has been a matter of concern for industrialised neighbour Japan, as well for the United States and the European Union.

China controls a whopping 97% of the world's rare earth market, although it accounts for only 30% of the world's rare earth reserves. This makes industrialised nations heavily dependent on China for the supply of these essential minerals. Technically viable alternatives to rare earth materials are currently not known.

Rare earths are indispensable for high-tech industries and are heavily in demand in defence systems, electric cars, wind generators, hard-disk drives, telecoms, missile guidance.

There are 17 rare earth elements such as Lanthanum, Cerium, Promethium and Europium.

In recent years, China has been putting in place tighter controls over unauthorised exploration, mining, processing and sales of rare earth materials, calling them the country's 21st century treasure trove of new materials.

Beijing enforced restrictions on rare earths exports in 2010, saying it was necessary for maximising profit and supporting domestic high-tech companies. China's commerce ministry said at that time the country had the right to cut export quotas to preserve exhaustible resources.

In 2011, China had offered to ease export restrictions to the near-2010 levels, but major trading partners demanded unfettered supply of essential minerals.

However, Beijing believes it has the right to manage its resources and that foreign companies anxious over rare earths supplies should shift production to China, offering technology to local partners.

"China has repeatedly stressed that China's policy objective is to protect resources and the environment and achieve sustainable development and that it has no intention of protecting domestic industries in a way that distorts trade,'' the commerce ministry said.