China's rare earth metals remain exempt from US tariffs in the ongoing trade war between the two countries. The minerals are critical to a wide array of US industries, including military equipment, so China's rare earth exports have remained unaffected. But the industry has never been very beneficial to China, since the country stands at the middle and low end of the global rare earth industrial chain. CGTN's Tang Bo takes a look at how China is trying to change that.

This production line at Wankaifeng Rare-earth Science and Technology Group is producing nickel-metal hydride batteries.

Widely used in electric cars and hybrid vehicles, the batteries' discharge performance rate is at least 2 times higher than ordinary ones with huge market potential at home and abroad.

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

WEN QUAN, PRESIDENT WANKAIFENG RARE EARTH SCIENCE & TECHNOLOGY GROUP "Rare earth metals have been widely used in high-tech products. As a rare earth company, we have been doing research and cooperating with some scientific research institutions to make full and better use of our rare earth resources."

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.

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

However, Wankaifeng is just one of a 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 WANKAIFENG RARE EARTH SCIENCE & TECHNOLOGY GROUP "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."

TANG BO MIANNING COUNTY, SICHUAN PROVINCE "For quite some time, China has stood at the middle and low end of the global rare earth industrial chain, exporting crude minerals and primary commodities, like oxide products. So, 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. But that's about to change."

Wankaifeng's own rare earth research institute is one example. 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 companies in the Mianning Rare-earth Industrial Park, only two are able to produce high tech products, and Wankaifeng is one of them.

The deputy director of the industrial park says they were making policies together with the county government to encourage more companies in the park to make the change.

SHEN JIANGUO, DEPUTY DIRECTOR MIANNING RARE EARTH INDUSTRIAL PARK "There will be rewards for companies whose high-tech product output reaches a certain standard. We are also applying 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. Tang Bo, CGTN, Mianning county, Sichuan province.