To regulate the industry of rare earths or not to regulate it, that is indeed an important question. For, as Xiao Yaqing, minister of Industry and Information Technology, said at a news conference on Monday, the country's rare earths are being sold at too low a price in the international market, which is a waste of these valuable resources.
That explains why the ministry released draft regulations on the administration of rare earths in January, soliciting opinions. These regulations are meant to better regulate the mining of rare earths and the development of the relevant industry.
Given the importance of these rare earths to the manufacturing of various industrial products, there is no reason for these strategic mineral resources to be sold as cheaply as they are. But the rare earths China exports are too cheap to be called "rare" because of the fierce competition among the domestic mining companies.
With no overall plans for balanced development of the industry and comprehensive utilization of the rare earths, enterprises tend to mine the best deposits for immediate profits. This has resulted in the waste of these precious resources. If the mining was done in a more orderly manner, such waste would be avoided.
The cut-throat competition and the need to reduce costs means the mining enterprises and refiners show scant concern for the local environment and their activities cause serious environmental damage, some of which endangers the health of local residents. The environmental harm caused by the industry is a problem that must be addressed.
The lack of high level products requiring rare earths is another reason why China has historically sold these valuable elements so cheaply.
It is obvious that a grand scheme for the industry needs to be drawn up at the top level for the long-term development of the rare earths industry.
In the first place, the mining of these strategic ores must be regulated so that it is done in an orderly manner to avoid the waste of these precious resources. And efforts must be made to protect the environment from being damaged in the process of mining and refining these essential elements.
Policies will also have to be made to encourage the indigenous development of high level products that employ rare earths, as this would benefit China's own technological development.
It is not that China will prohibit exports of rare earths. Rather that it needs to better regulate the industry for its better and higher-level development.