The other side of the rare earth litigation

The Chinese rare earth international lawsuit has been going on for about 2 years. The result of the ruling in the spring of 2014 was: The World Trade Organization (WTO) released an expert group report that China’s export tariffs and quota management measures on rare earth, tungsten, and molybdenum related products violated The relevant provisions of the WTO. In other words, China cannot continue to use quotas to manage exports of rare earths.

This result does not seem difficult to predict. As early as the beginning of 2012, the WTO issued a report confirming that China has restricted the export of nine types of raw materials and provided protection for domestic manufacturers. The report requires China to lower export tariffs and lift export quotas.

Although there is a 60-day appeal period, many people in the industry interviewed by "Oriental Outlook Weekly" believe that it is very difficult for the Chinese to reverse under the established WTO rules.

Some voices believe that the failure of the rare earth litigation is related to the US and Europe’s control over the formulation of the WTO rules. It is actually a concrete embodiment of the US and Europe’s control of the WTO’s plunder of Chinese resources.

However, "We ourselves should reflect more." Lin Donglu, secretary-general of the Chinese Society of Rare Earths, told the journalist that it is necessary to seriously consider how to make good use of the organization's rules and regulations.

In a certain period of time, this ruling will obviously have an impact on China's rare earth industry. “But in the long run, this impact will soon be over. We should strengthen basic research, break through major key technologies, develop applications for downstream industries, and change The situation of using resources for technology is the only way we can talk about rare earth powers, and we can only become passive.” Zhang Anwen, deputy secretary-general of the China Rare Earth Society, told the reporter.

The original promise

The so-called rare earth international lawsuit refers to the United States, the European Union, Japan v. Chinese rare earth, tungsten, molybdenum related export product management measures, does not meet the relevant WTO rules and China's commitment to join the WTO.

The Chinese side believes that China’s relevant measures are in line with the WTO’s “sustainable development” purposes, and that the use of rare earths as a non-renewable mineral resource is an exhaustible natural resource and can be quoted in Article 20 of the 1994 General Agreement on Tariffs and Trade, Exports are limited by the "protection of exhaustible natural resources."

When China joins the WTO, there are 84 tariff lines that can increase tariffs. However, of the rare earth, tungsten, and molybdenum resources, only one tariff line of tungsten can increase the scope of tariffs, and rare earths and molybdenum are not in this range.

The so-called tax code is simply a catalogue. When customs handles import and export goods, it collects duties according to the tax number.

Zhang Anwen said that he believes that the 84 tax numbers have been fully discussed and difficult to negotiate. “After joining the WTO itself is a very difficult negotiation. It should be said that the things that were discussed at the time of accession to the WTO are concessions, guarantees, and delays. The concessions must be conceded. The insistence will never retreat, and some will give buffer time." He explained, "After joining the WTO more than a decade ago, it may have been that our understanding of the rare earth was not as high as it is now."

Therefore, for the failure of this rare earth litigation, "After all, the WTO has corresponding rules, including quotas and tariff settings. Although we have been striving for and appealing, we cannot jump out of the regulatory framework, so this result can be said to be expected. "Lin Donglu told the journal.

China uses 23% of rare earth reserves to provide more than 90% of the global market supply, which has lasted for nearly 30 years since the 1980s. "The supply of such a long period of time has become normal for some developed countries and has formed dependence. They feel that they should be supplied to them without considering the devastating effects on our environment." Zhang Anwen exampled, in the South In the heavy rare earth mining area, mining 1 ton of rare earth ore will produce 1600 tons to 3,000 tons of waste soil waste rock. The production of one ton of rare earth oxide in Baotou will produce 30,000 cubic meters of waste gas.

In fact, the United States, Canada and other developed countries all have very rich reserves. Before the 1980s, these countries were also supplying rare earth exports. However, with the increase in the export volume of China's rare earths, they began to hide without collecting or mining. The United States, which was also an important source of rare earths, shut down the mainland's largest rare earth mine, Mountain Pass, in 1997, and changed its imports of cheaper rare earths from China.

According to relevant statistics, the average export price of rare earths from 1979 to 1986 was 7 to 9 US dollars per kilogram; from 1987 to 1991 it was 9.5 to 13.5 U.S. dollars per kilogram; from 1992 to 2001, the price fell to 9 to 11 U.S. dollars per kilogram; from 2002 to 2005 In years, the price even fell to 5.5 US dollars per kilogram.

Xu Guangxian, an academician of the Chinese Academy of Sciences, once said that between 1995 and 2005, China exported tens of billions of dollars because of the low price of rare earths.

Since 2003, China has started to implement a quota system for rare earths. By 2005, it will further abolish export rebates for rare earths and reduce the list of export quota companies. Since 2007, China has implemented directive plans for rare earth production to reduce rare earth exports.

On the other hand, when China entered the WTO negotiations, one of the focuses was to lift barriers to imported products in order to achieve fair competition for foreign products in the Chinese market. Later, as a means to encourage or curb domestic production capacity, China had adopted measures to increase or reduce export taxes and adopted export quota systems for some special products.

This means that the price of some products in the domestic market is lower than the price of the product in the international market. In a similar case, in June 2009, the United States and the European Union filed an application for complaint with the World Trade Organization, stating that China has imposed export quota restrictions on nine kinds of raw materials such as bauxite, yellow phosphorus and zinc, which violates its commitment when joining the WTO. These measures have led other countries to be at a disadvantage in the production and export of steel products and chemicals, while Chinese related companies have obtained unfair advantages in competition.

In early 2012, the WTO issued a report confirming that China has restricted the export of nine types of raw materials, provided protection for domestic manufacturers, and demanded that China lower its export tariffs, lift its export quotas, and fulfill its obligations under the WTO.

WTO rules

Although China exports rare earths, these low-priced rare earths are often sold to China at tens or even hundreds of times after deep processing abroad.

“The things we sell have always been sold at a low price, and what we buy has become a high price.” Zhang Anwen said that on the one hand, rare earth consumer countries use our rare earth to obtain high efficiency, on the other hand left us Unrecoverable environmental pollution and ecological damage.

Article 20 of the General Agreement on Tariffs and Trade of 1994 stipulates that if its member states believe that the export of a certain resource or a certain resource product will cause excessive depletion of domestic resources or result in serious environmental pollution, the member state has the right to The production, sales and export of such resources take corresponding export control and export restrictions. The WTO panel’s decision held that China’s evidence cannot constitute a reason to restrict exports.

While limiting quotas, China has taken measures to limit the types of mineral products and the total amount of smelting as part of the comprehensive management of rare earths. During this period, China’s domestic demand for rare earths is also declining, and more emphasis is placed on the effective use of resources.

Zhang Anwen said that these are obviously beneficial to environmental protection, so it is not impossible to produce evidence. “Our threshold for enterprises to obtain quotas is first of all to achieve environmental protection standards, which is conducive to the quality of exports, and before the quotas are set, some products that do not meet the standard are set. It will also be exported."

He suggested that in the future, it should continue to strengthen the management of upstream industries, collect resource taxes, establish sewage charges, and restrict the source of production. In addition, we must strengthen the management of export companies, pay attention to industry self-discipline, and play the role of industry associations.

In addition, Zhang Anwen suggested that strict entry thresholds for export, and through strict environmental protection standards for management, improve resource utilization and other means to achieve effective management of the industry.

“Now, many times, we are all exported at low prices. This shows that although we are a large supplier, we lack the right to speak, including in China, and we must establish a reasonable price mechanism to maintain a relatively stable and stable rare earth price. Stability is the most important.” Zhang Anwen said that in order to establish a new export management model, it must not be the same as the “price of cabbage” in the past.

The focus of cracking down on illegal mining should sink

As early as 1998, China began to implement a permit system for the export quota of rare earth products, and included rare earth raw materials in the list of prohibited commodities in processing trade.

At the same time, domestic rare earth prices have been rising all the way through a series of measures such as rectifying the order of rare earth mines, formulating industry access policies, and vigorously promoting the integration of rare earth industries.

In 2011, the Ministry of Finance and the State Administration of Taxation issued a notice and decided to adjust the standard for rare earth ore resources tax amount in April of that year. After adjusting, the resource tax per ton of rare earths rose by more than a few times, which quickly caused dissatisfaction among the countries with large demand for rare earths such as the United States, Japan, and Europe.

"It can be said that the regulation of resource tax is still relatively limited." Chen Zhanheng, the deputy secretary-general of the China Earth Society, told the journal that the rise in resource taxes has stimulated the phenomenon of random mining in certain areas of the south to a certain extent. Regular channels of rare earths have more room for profit.

"We must adapt to the rules of the WTO, seek advantages and avoid disadvantages, and we must make good use of those rules." Lin Donglu told the journal that in the future, it is necessary to communicate under the framework of WTO, strengthen industry self-discipline, form a consensus, achieve environmental protection, and develop and use it rationally. Resources.

Regarding the situation where the rare earth industry is chaos and open, Lin Donglu believes that although there are already relatively sound laws and regulations, there are still many deficiencies at the enforcement and regulatory level. “The crackdown on illegal pirate mining, environmental protection, public security, and There are many problems in mine management, multiple jurisdictions, enforcement, law enforcement, and punishment mechanisms."

Previously, some localities took joint measures to implement law enforcement, and the local administrative leaders took charge and achieved certain results. However, there are also local officials who are greeted with illegal miners. “Some things are beyond the limits of the province. The focus of management should be below the county level.” Zhang Anwen said that if the center of gravity moves down, layers of responsibility, management is in place, strict punishment, it is not impossible. Governance.

High-end applications are short boards

Zhang Anwen said that in terms of rare earth mining, smelting separation technology, and R&D of rare earth functional materials, China's technology has been greatly improved. However, in the downstream areas of rare earth utilization, especially the core technologies and product development of high-end products such as components and components, are still shortcomings. “The state should do a good job of top-level design, do a good job of institutional arrangements and strengthen policies, funding, etc., and encourage enterprises. As the main body, we develop rare earth components and components technology to realize mass production, realize the transformation and upgrading of rare earth industries, transform the advantages of rare earth resources into economic advantages, and complete the transformation from a rare earth power to a rare earth power.”

In 2011, the State Council issued the “Several Opinions of the State Council on Accelerating the Sustainable and Sustainable Development of the Rare Earth Industry”, which explicitly requires strict crackdown on illegal prospecting, exploitation and ultra-target mining, and proposes a comprehensive clean-up of rare earth prospecting rights and mining rights to increase mining access thresholds.

An anonymous expert interviewed told the journal that in fact there should have been no new access to the enterprise. “On the one hand, it is on the one hand, and on the other hand, it is still admittance. The mine in Inner Mongolia has already opened. Jiangxi’s It has already been opened. Both medium- and heavy-earth rare earths have been covered. Resources in other places should be retained and stored. The status quo is all set aside. Digging conditions are also digging.

In addition, too many Chinese rare earth companies are not conducive to the effective use of WTO rules. It is understood that there are about 70 to 80 rare earth enterprises in China, while there are only 7 or 8 western countries. In addition, rare earth enterprises in Western countries generally have a fine division of labor and strictly follow the path of differentiation. However, China's actual situation is large and complete, and the industry converges, which is obviously not conducive to the development of the high-end direction.

The expert bluntly stated that China has a vast territory, but how to think about it and use it most efficiently, the relevant management departments have not considered it sufficiently. "We (of the WTO ruling) should excuse, of course, we must actively excuse, but More importantly, we should close the door to analyze our own deficiencies."