Baotou mine in Inner Mongolia produces 46 per cent of the world’s rare earth supplies (photo:dpa)

How China’s strict rare earths policies sparked a backlash

China has limited natural resources for a country of its size. But the exception is rare earths, in which it has a virtual world monopoly. In recent years, Beijing has been buying huge quantities of raw materials from around the world, but its rare earths export restrictions and quotas have increasingly been put under scrutiny by rival powers.

CHINA'S political and economic policies are often guided by long-term thinking and concepts, in contrast to those of Western governments. But its rare earth policy is an exception.

China’s leader and reformer Deng Xiaoping stated in 1992: ‘The Middle East has oil, China has rare earths.’

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Dr. Frank Umbach
Foreign producers are believed to pay at least 31 per cent more for REEs than Chinese companies. As a result, a black market has developed and in 2009 around one third of all REE exports were smuggled out of China
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