Rare earth metals remain exempt from U.S. tariffs on China in the trade dispute. The minerals are critical to a wide array of U.S.'s industries, including military equipment. China's rare earth exports, therefore, have remained unaffected, but the industry has never been a beneficiary since China stands at the middle and low end of the global rare earth industrial chain. Now China is trying to make a difference.

Increasing high-end rare earth products

Wankaifeng Rare-earth Science and Technology Group in southwest China's Sichuan Province is producing nickel-metal hydride batteries.

Widely used in electric cars and hybrid vehicles, the batteries' discharge performance rate is at least two times higher than ordinary ones with huge market potential at home and abroad.

The key technique is the use of some rare earth minerals.

Some nickel-metal hydride battery products made by the company have successfully entered the international market, including in the U.S. where its Transportation Ministry has granted permission for use in backup power for truck signal lights.

However, Wankaifeng is just one of the few rare earth companies in China that are developing a full industrial chain, ranging from crude minerals and primary commodities to high-end products.

Wen Quan, president of the company, said even though China has been the world's largest exporter of rare earth for years, it has never really become competitive in the global market.

Wen stressed that foreign companies have a huge advantage in some major rare earth application areas, such as aviation and magnetic materials. What we have been doing in the past decade is trying to break the technological barrier and narrow the gap. We must combine our resource advantages with our improving research capabilities.

Rare earth materials are any number of 17 different minerals critical to a wide range of industries from high-tech consumer electronics and electric vehicles to sophisticated military equipment.

A rare earth development plan released by China's Ministry of Industry and Information Technology in 2016 pointed out that the lack of high-end products and core patents is the main problem faced by the nation's rare earth industry.

Scientific & policy supports for moving up the chain

Setting up its own rare earth research institute is another step by Wankaifeng to try to upgrade its industrial model.

With the help of the research facilities, the company is currently working on the application of cerium, a rare earth mineral which can be used to make circuit plates and ultraviolet proof glass.

Among over 20 rare earth companies in Mianning Rare-earth Industrial Park, only two can produce high-tech products, and Wankaifeng is one of them.

Shen Jianguo, deputy director of the industrial park, said they were making policies together with the local government to encourage more companies in the park to make the change.

He said there would be rewards for companies whose high-tech product output reaches a certain standard. The industrial park had also applied for electricity subsidies for companies in the industrial park so that they can reduce their production costs and invest more in producing high-tech products. Countries around the world rely on China for nearly 90 percent of their rare-earth demands, but the country has never really benefited from its cheap exports as it pays more to import high-value-added rare earth products.

In 2014, China started to establish six big rare earth groups as the first step to consolidate the sector's resources and restructure industrial chains. The past few years have seen remarkable progress in upgrading the industry. But experts say continuous efforts are still needed to realize high-tech development and keep China strong in the global market under rising unilateralism.