BEIJING, July 7 China is well within its rights,
legally and morally, to limit rare earth exports, argued an
article in Chinese state media on Thursday, days after the World
Trade Organization ruled against China on its curbs of raw
The People's Daily, the mouthpiece of China's ruling
Communist Party, said claims by countries that China's export
curbs on the minerals threatened their economic and national
security were "groundless".
"It's not that other countries don't have their own
supplies, it is just that they have hidden them away," it said.
"China's handling [of rare earths] does not violate
international rules and is not contrary to its WTO accession
promises," the paper said.
The WTO ruled on Tuesday that China had violated its rules
when it curbed exports of coveted raw materials such as bauxite,
coke and magnesium used in the production of steel, electronics
That ruling, initiated by complaints filed by the United
States, the European Union and Mexico in 2009, was seen as a
possible precedent for a future case on China's rare earth
In its ruling, the WTO panel said China's domestic policies
fell short of demonstrating that its export duties on raw
materials were to curtail pollution or conserve exhaustible
natural resources -- reasons also offered for its rare earth
China is widely expected to appeal the ruling. It has taken
steps to consolidate and rein in its polluting rare earths
industry, which may bolster its case should rare earth quotas be
the target of a similar WTO challenge.
The central government slashed rare earth export quotas by
35 percent for the first half of 2011, building on previous
quota cuts. That move choked off global supplies, boosted prices
and angered China's trading partners.
China produces 97 percent of the world's supplies of rare
earths, a group of 17 minerals used in electronics and defence
and renewable energy industries.
Aside from reiterating China's stance, the report cited
experts who highlighted United Nations declarations on
sovereignty over resources and WTO rules that would allow China
to make exceptions with its rare earth quotas under trade law.
"Western countries cite WTO clauses to criticize China ...
but there are always exceptions to the WTO legal provisions,"
the paper quoted prominent Tsinghua University scholar Zhou
Shijian as saying.
"For example, article 20 of the General Agreement on Tariffs
and Trade expressly stipulates that contracted parties may, for
certain special purposes, limit imports and exports," the paper
The WTO did not permit those general exceptions on the raw
(Reporting by Michael Martina; Editing by Sugita Katyal)