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China defends cutbacks on rare earths

Beijing - China on Wednesday defended its controls over lucrative rare earth metals ahead of a visit to the United States next week by President Hu Jintao, amid concern Beijing is abusing its market dominance.

Hu will visit Washington for talks with US President Barack Obama and make a stop in Chicago during the January 18-21 trip, vice foreign minister Cui Tiankai told reporters.

The visit is seen as a crucial one for Sino-US relations, after a number of disputes over the past year on a range of topics from the yuan to climate change to rare earths, which are used to make high-tech products.

"I don't think this is an issue between China and the United States, neither do I think this should become an issue," Cui said on the question of rare earths - 17 elements vital to everything from iPods to wind turbines.

"China accounts for one-third of the world's total reserves, but China now undertakes over 90% of the total use of rare earths worldwide, so shouldn't there be a fairer sharing of responsibility on this issue?"

Last month, Jon Huntsman, the US ambassador to China, called on the Asian nation not to use rare earths as a "trade weapon" after Japanese industry said Beijing temporarily cut off exports in 2010 in the midst of a diplomatic row.

China has denied any political motivation over rare earths. It has since tightened control over the elements by cutting quotas for overseas shipments and hiking export taxes, insisting this is due to environmental concerns.

"Rare earths involve sustainable use of resources and the issue of environmental protection," Cui said.

"So... it is consistent with the objective needs of world development for China to adopt some measures in this regard, and it is consistent with the need for sustainable development and the protection of natural resources."

In Washington, Hu will meet with Obama and US lawmakers, and deliver a speech, Cui said.

The tense situation on the Korean peninsula and China's yuan exchange rate will be on the agenda, the minister said.

Hu will also be the first Chinese leader to attend a state dinner in the United States since president Jiang Zemin in 1997.
 
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