The long-awaited policy change comes after the World Trade Organization determined last year that the nation’s quota system violated trade rules.
China has scrapped its controversial quotas on rare earths exports and is likely to replace them with a resources tax, eliminating a policy that sparked a global trade dispute and led some countries to reduce their reliance on Chinese supplies.
The long-awaited policy change, announced by the Ministry of Commerce on Dec.31, comes after Beijing lost a World Trade Organization (WTO) case, as the body ruled that the nation had failed to show the export quotas were justified.
Beijing imposed the restrictions in 2009 while it tried to develop its own industry for the 17 minerals
Beijing imposed the restrictions in 2009 while it tried to develop its own industry for the 17 minerals, which are crucial to making a wide range of high tech devices, from smart phones to electric cars.
The U.S. issued a formal complaint in March 2012, which was backed by several nations, including Brazil, Canada, Japan, Argentina, Russia and Australia, as well as all members of the European Union.
Baotou City: Epicentre of China's rare earth industry.
It is estimated that world’s second-largest economy is responsible for about 93% of global rare earth output, despite only having a third of the world's deposits.
China exported 24,866 metric tons of rare earths in the first 11 months of last year, well below its 2014 quota of 30,611 tons,according to The Wall Street Journal.Exports totalled 22,493 tons in 2013, significantly lower than the ministry’s 30,996-ton quota.
Under the new guidelines, rare earths will still require an export licence but there will no longer be a limit to the amount that can be sold abroad.
Last month, China’s top producer of light earth metals, Baogang Rare Earth Group (BREG)became a dominant global player after merging with five smaller companies. Other major firms, Aluminum Corporation of China and Xiamen Tungsten Co. Ltd, are also expected to complete a merger this year.
Top image: Screenshot from CCTV News via YouTube.
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