Xinhua News Agency, Beijing, April 28 (Reporters Liu Kaixiong and Zhao Xiaohui) — The State Council’s executive meeting held on the 28th decided to implement a reform of the resource tax on rare earth, tungsten, and molybdenum resources, thereby promoting a more rational alignment of resource taxes and fees. Analysts believe that this adjustment to the resource tax fully demonstrates the policy’s adaptability to changes in market demand and will help propel the rare-earth industry toward mid- to high-end development.

Rare earth elements, often referred to as "the MSG of industry," are widely used in the production of high-end electronic components. For a long time, China has been the world's largest producer and exporter of rare earths. In recent years, with the rapid development of industry, China has also become the world's largest consumer, with its rare earth consumption now approaching 60% of global total consumption.

However, precisely because rare earth elements have high industrial value-added, illegal and excessive mining of rare earth minerals continues to be a persistent problem despite repeated efforts to curb it. Over the past few years, China has established a Rare Earth Office under the Ministry of Industry and Information Technology to strengthen the management of national rare earth resources. In collaboration with several other government departments—including the National Development and Reform Commission, the Ministry of Natural Resources, and the Ministry of Commerce—China has launched multiple special campaigns targeting illegal and excessive rare earth mining. Additionally, special value-added tax invoices for rare earths have been introduced to standardize the mining and circulation processes, and efforts have been actively promoted to restore and rehabilitate ecological environments in mining areas. As a result, significant progress has been made in implementing protective development practices.

Meanwhile, efforts to consolidate and upgrade the rare-earth industry are also proceeding smoothly. A number of large-scale rare-earth groups, including Northern Rare Earth Group, China Rare Earth Group, and Xiamen Tungsten Industry, have emerged one after another. In the high-end application sector, a group of internationally competitive rare-earth application enterprises—such as CAS Sanhuan, Ningbo Yunsheng, and Antai Technology—have also come to the fore.

Experts point out that China’s current management of rare-earth resources has already begun to yield positive results. It is appropriate to make moderate adjustments to the tax on rare-earth resources, thereby ensuring a stable supply of these resources and supporting the transformation and upgrading of China’s economy. This will help Chinese downstream rare-earth enterprises reduce costs, increase R&D investment, and drive the entire rare-earth industry chain toward higher-end and more sophisticated levels.

It is worth noting that China will lift the export tax on rare earths starting May 1. This resource tax reform is seen as a move to align with the need for reforming export tariffs. Some experts believe that this dual reform targeting rare earths—strengthening regulatory oversight at the resource end while leveraging market forces to optimize resource allocation—will enable China’s rare earth industry and its downstream sectors to move toward higher-end products and enhance their international competitiveness.