A few suggestions for China’s rare-earth policyBy Hu Weijia...

A few suggestions for China’s rare-earth policyBy Hu Weijia Source:Global Times Published: 2019/6/17 21:33:411

China's top economic planner said on Monday that it will study and roll out policies on rare earths as soon as possible. The news came just two weeks after the National Development and Reform Commission (NDRC) took the unusual step of holding three meetings to solicit opinions from rare-earth regulators, experts and enterprises. No detailed policies have yet been released, but there are recommendations from industry insiders that we believe the government may study in the coming weeks.

First, US defense manufacturers - and companies that adopt discriminatory measures such as cutting supplies to Chinese entities including Huawei - are likely to be among the first entities to face restrictions on buying China's rare earths. Meng Wei, spokesperson for the NDRC, reaffirmed at a press conference Monday that Beijing firmly opposes any attempt to use products made with China's rare-earth resources to curb the nation's development.

Second, Beijing should work out a negative list of foreign end-users of China's rare earths, and any companies that aren't on the list could be allowed to become end-users of China's rare earths. Overseas buyers, as the middlemen between China's exporters and end users, need to provide information on their end users. They will face penalties if those customers are on China's negative list.

Third, China must close loopholes in its export quota system to ensure zero smuggling and zero illegal exports of rare earths.

Fourth, a traceability system and a security review mechanism for rare earths should be rolled out as soon as possible to tighten management of rare-earth enterprises, especially foreign-invested companies, to strengthen supervision of the whole industry.

According to Meng, industry experts who attended the three meetings suggested China should strengthen export controls and establish a tracing and review mechanism for rare earths. China is marshalling information on its rare earth resources with a draft regulation released last week by the Ministry of Industry and Information Technology to set standards for the packaging, marking, transportation and storage of rare-earth products. Meng said China has been expeditiously studying policies to give full play to the special value of rare earths. The four steps above can help China reach its goal of fully utilizing its dominance in the production of rare earths amid an escalation of the trade war provoked by the US.

The author is a reporter with the Global Times. [email protected]