WTO litigation temporary defeat Chinese rare earth export controls or termination

Has been a year and a half Chinese Rare Earth International Litigation October 26 outgoing messages , allegedly WTO (WTO) dispute settlement mechanism to complete panel ruled that the interim report , supports the United States , Japan and the EU against Chinese rare earth export restrictions policy violation aspirations. Rare international litigation failure means China will be forced on China 's rare earth export quotas of existing policies , rare earth export tariff adjustments , China 's rare earth export controls may have to end .

Media reports said the dispute panel 's interim report on the rare earth (Interimreport) has been distributed to parties to the dispute , the final report may be 6-8 weeks after the formal public . Up to now, the Ministry of Commerce , Ministry of Industry and the China Association of rare earth management departments and industry organizations have not confirmed the news to the outside world .

However, " China Business" reporter learned that , in the face of international litigation unfavorable situation , management has considered more flexible and rational policies instead of across the board, dogged terminal control , such as stress the importance of market allocation of mandatory production plan ways to improve the role, through the financial transfer payment to compensate for the rare earth resources , from the source to abate illegal mining of rare earth resources , overcapacity of power.

Worries losing

March 2012 United States, Japan and the EU to the WTO has brought tripartite trade disputes claims that the Chinese for 17 kinds of rare earth and tungsten, molybdenum export quotas and export taxes imposed restrictive measures . After fruitless bilateral consultations , in September 2012 , set up by the WTO Director-General panel to adjudicate . Prior to the 2011 WTO had ruled China for bauxite, coke , magnesium and other 9 kinds of restrictions on exports of raw materials policy violates WTO rules .

"Once the Chinese really lost, rare earth industry may suffer from ' disaster ', Chinese rare earth export regime will be adjusted quotas and export tariffs will be subject to release under pressure , but the structure confusion, concentration is low , such as smuggling and trafficking phenomenon will rise. " October 31 , the investment adviser metallurgical industry researcher Weiqi Ning told reporters that , in the internal environment has not improved in the case , was forced to open the industry is bound to exacerbate difficulties.

Data show that from January to August this year , China's rare earth mining and smelting industry realized main business income of 45 billion yuan , down 14.9 percent , import and export volume of rare earth products $ 1.4 billion , down by 39.4% . January to August this year , the rare earth mining and smelting industry realized profits of only 3.2 billion yuan , down 62.1 percent .

Once the quota system liberalized, tariffs fall , rare earth export trade is bound to increase , which is partially dependent on the survival of rare earth companies that trade is good , in the framework of China 's rare earth industry and trade enterprises has been questioned , while relying on the existing the breeding of rare earth export quota system corruption are also concentrated in the trade sector , at the end of 2010 to 2011, a period of soaring prices of rare earth , rare earth export quota system rose to 50,000 yuan per ton from 500,000 yuan per ton , with the export quota system gradually inclined to producers , coupled with rare earth market slump , the current quota system basically nobody cares.

According to the Ministry of Industry and Raw Materials Division Office of Rare Jia Yinsong data provided by the country now has 1,594 rare earth companies issuing invoices . Theoretically, industry authorities and tax authorities could keep track of all rare earth production and circulation , thus take control of illegal rare earth industry chain , it can also eliminate some excess capacity .

But the reporter learned that the Chinese enterprises in the register of smelting separation is only 200 , that a large number of business enterprises in the invoices the business listings. This also means that there are a large number of rare earth invoices flowing non- manufacturing enterprises in the book possible.

From Guangdong Dongguan, a rare trader told reporters that they had customers from abroad at the "smell" to change the atmosphere, "Many have a long delay in considering the needs of customers orders, if the export quotas , they there will be many objects of inquiry , the price will certainly be reduced. "

Currently Chinese official did not disclose the progress of rare earth litigation , the dispute settlement procedures , the group will be in two weeks time another open meeting with the parties , review the aforementioned interim report , the panel report if China dissatisfied still have the right to the WTO Appellate Body of Appeal.

On October 26 at the " 2013 China Rare Earth Forum", the China Nonferrous Metals Industry Association vice president, China Rare Earth Industry Association vice president Wang Qin said that , "WTO litigation involving rare earth nearing the end , the abolition of exports of rare earths quota management will also be on the agenda after the end of the case , it is recommended first began to consider a lighter rare earths . "

Excess " ills "

Beginning in 1998 as the policies implemented in rare earth export quota management in the eyes of many people in the industry are considered a temporary arrangement , they believe that when the domestic production order specifications, environmental remediation is complete, it can be canceled.

It is understood that after nearly five years after integration , China's rare earth enterprises of the top ten companies , mineral production capacity has accounted for 81% of the country's total capacity , smelting separation capacity accounted for 61.5% .

But unfortunately, not enough to make the treatment results and export quota policy after 15 years in the implementation of the conditions have quit because of rare black chain is still popular , so that national annual mandatory production plans are not implemented , rare earth oversupply the situation has been difficult to change.

Wang Qin available data show that China's rare earth smelting and separation capacity of 40 million metric tons, global demand is 12 million tons, according to the static figures to count, less than 30% operating rate . In general, rare earth materials , permanent magnet alloy production capacity of 250,000 tons , production is only 80,000 tons ; hydrogen storage alloy production capacity 30,000 tons , production is only 12,500 tons ; NdFeB enterprises in the field of new materials with nearly 200 , the annual production reached 1,000 tons , only more than 20.

Previously these traders from engaging in Dongguan earth downstream industries, because the market is in the doldrums career change , he said the reporter , rare earth prices fell after 2011 , the original " hungry " downstream industries will soon be "eat & rdquo ; into a surplus . Both upstream and downstream of this excess , so that rare earth prices in the past year and a half are maintained at low levels .

Wang Qin believes that rare earth price volatility is an important factor in the breeding of black chain repeatedly , she said, the illegal exploitation of rare earth mine is 4 million tons, smelting separation production of super- index or no index at 50,000 tons so, the amount of smuggling of rare earth in about 20,000 tons , seriously interfere with the normal production and distribution of rare earth order. And China Rare Earth Industry Association, Ma Rongzhang in August this year that the South separated ion ore smelting enterprises to obtain more than 70% of unknown origin .

Source control

In the past five years, rare earth consolidation , Minmetals , Chinalco , the color of mining, research and other Chinese steel strengthened with Shandong, Hunan and other places , and cooperation between enterprises at the provincial level level, Inner Mongolia, Jiangxi, Guangdong, Fujian, Sichuan and other regions and enterprises , and increased merger and reorganization efforts, and achieved initial results .

In the event, as it involves the central and local , regional coordination with regional interests , rare earth resources has become the focus of the parties to compete , but also become a lot of local governments and tenant companies "negotiate" chips , and this delicate game for illegal mining, ultra- planned production of repeated planted the "seed" , overcapacity is difficult to resolve is also reasonable.

Jia Yinsong October 26 Speaking of deep-seated problems of rare earth industry , pointed out that part of the enterprise of illegal mining, in order to select iron , recycling of rare earth in the name of election " in some areas is not responsible for monitoring the implementation of the super- exploitation of indicators , taking acquiescence attitude. "

Wang Qin said that as China's rare earth resources distribution characteristics were located in poor and remote areas , economic development is relatively backward, overcapacity is the local government hopes to develop rare earth resources development and utilization of the local economy as a consequence .

" In developing countries, the development of rare earth resources and industrial development policy, should pay attention to the rational distribution area , central and local governments to properly handle the current and long-term relationship , to explore the establishment of mechanisms for the protection of rare earth resources and supporting the interests of the compensation mechanism , the use of transfer payments , etc. on resource protection area involved and corporate compensation. " Wang Qin said.


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