China's rare earth industry is defending China's recent decision to cut its rare earth exports, with industry leaders saying the move was out of concern for the environment and will not have much effect on foreign access to its supply.

China is the world's largest producer of rare earth elements, most of which are used in modern technology, such as new energy sources and hybrid cars. It announced in July that it will cut exports for minerals used to make hybrid cars and televisions by 72 percent in the second half of the year.

Lin Donglu, secretary-general of the Chinese Society of Rare Earths, said the decision was based on concerns over the environment, which, he noted, the budding green industry is heavily reliant upon.

"The world may suffer from exhaustion of resources if China cannot properly regulate its rare earths industry," Lin said. He added that China has only 30 percent of the world's total rare earth elements.

The U.S. wants to file a WTO case against China for hoarding rare earth elements. But, presumably, China's rare-earth industry does not want other countries to see the cut in exports as "hoarding."

"Foreign companies established in China are not to be restricted by the quota curbs," said Wang Hongqian, general manager of China Nonferrous Metal Industry’s Foreign Engineering and Construction. He also said it was possible for rare earth elements to enter the foreign market through "other channels."

Lin also notes that the export cap does not include materials used in new energies and lighting industries. "Foreign companies can buy these materials directly from China or invest in processing rare earth elements in China to meet their demand for developing the green industry."

For anyone who worried that high-tech companies that use rare earth elements might transfer to China or that the high-tech industry will move to China, they can relax. "Foreign companies will not set up their high-tech branches in China," Wang asserts.

He said that China’s rare earth industry already developed advanced technology, so there will be no technology barrier that needs to be overcome by foreign companies.

Instead of worrying about what China is doing, Chinese industry leaders think other countries should make up the difference between supply and demand with their own resources.

"It is the right time now for other countries to re-exploit their rare earth resources," Lin said, pointing out that it would lead to more competition, which he said would be more beneficial to the development of new technologies.