Rare earth quo­tas, tar­iffs ‘set to end’

China Daily (Canada) - - BUSINESS - ByWANG ZHUOQIONG wangzhuo­qiong@chi­nadaily.com.cn

China may end tar­iffs and quo­tas on the ex­portof rare earth min­er­al­snext year, in­line with a World Trade Or­ga­ni­za­tion panel rul­ing ear­lier this year that the na­tion acted in­con­sis­tently with WTO rules, an in­dus­try ex­pert said on Thurs­day. Chen Zhan­heng, deputy sec­re­tary-gen­eral of the China Rare Earths In­dus­try As­so­ci­a­tion, told China Daily that Bei­jing is ex­pected to end the ex­port tar­iffs and quo­tas, im­posed in 2010, if theWTOrules against the na­tion’s ap­peal later this year.

In­dus­try in­sid­ers said the ex­port quota sys­tem had been “in­vis­i­ble” in re­cent years in any case, since ac­tual ex­port vol­umes fell short of the quo­tas. Chen said the govern­ment is for­mu­lat­ing con­tin­gency plans for the end of the tar­iffs and quo­tas, in­clud­ing tax changes that might push up the prices of these scarce min­er­als.

Taxes would be levied based on the value of the min­er­als, rather than on vol­ume as is the case at present. That shift will mean higher prices at the pro­ducer level, which the govern­ment hopes will re­flect the scarcity of these re­sources and the en­vi­ron­men­tal costs of their ex­trac­tion. Other steps, in­clud­ing a sys­tem of en­vi­ron­men­tal com­pli­ance cer­tifi­cates, are in­tended to bet­ter man­age the rare earth in­dus­try, Chen said.

China pro­duces more than 90 per­cent of the global sup­ply of rare earths, a group of min­er­als that have a wide range of uses in high-tech sec­tors such as de­fense and re­new­able en­ergy. To pro­tect limited re­sources and re­duce the en­vi­ron­men­tal costs of pro­duc­tion, China im­posed tough out­put quo­tas and ex­port tar­iffs in 2010 as part of a wider crack­down on the sec­tor.

Two years pre­vi­ously, the Euro­peanUnion, Ja­pan and theUnited States joined to bring a case to the WTO over China’s mea­sures in­volv­ing ex­ports of rare earths, tung­s­te­nand molyb­de­num. They claimed that the re­stric­tions limited other coun­tries’ ac­cess to the min­er­als, giv­ing China a com­pet­i­tive ad­van­tage and hurt­ing pro­duc­ers and con­sumers.

AWTO panel said in­March that the tar­iffs vi­o­lated trade rules by giv­ing do­mes­tic con­sumers an un­fair ad­van­tage over for­eign com­peti­tors.

Du Shuaib­ing, an an­a­lyst with Baichuan In­for­ma­tion, said if the govern­ment re­moves the tar­iffs and ex­port quo­tas but in­creases tax­eson­pro­duc­tion, the re­sult will­bearise in pro­duc­tion cost­san­drare earth prices. Buthe added that con­trol­ling il­le­gal min­ing and smug­gling will be key to im­prov­ing the rare earth mar­ket in China.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.