Beijing, Nov 3 (ANI): Yao Jian, spokesman of China's Ministry of Commerce, has said that the country will reduce its rare earth export quotas next year, but not by a very large margin.

"To protect the environment and natural resources, China will stick to the quota system to manage rare earth exports next year, and quotas will also decline," Xinhua quoted Yao, as saying.

Yao's remarks echoed the comments of Wang Jian, a vice minister of commerce, made Monday at a press conference, saying: "I believe China will see no large rise or fall in rare earth exports next year," said Wang.

Wang emphasized that China has no embargo on rare earth exports, even though it uses a quota-system as a method of management.

China started the quota system on rare earth exports in 1998 and later banned it in processing trade. In 2006, China stopped granting new rare earth mining licenses and existing mines have since been operating according to government plans, the report said.

In early September, the State Council, or China's Cabinet, unveiled regulations to encourage merger and acquisitions within the industry, which were criticized by Japan, the United States and other European countries, claiming China's management violated World Trade Organization rules.

China is the world's largest producer and exporter of rare earths. With about one-third of all proven rare earth reserves, China's exports account for more than 90 percent of the world total.

Earlier, media reports had claimed that China would reduce the export quotas by up to 30 percent in 2011, which was denied by the Ministry of Commerce calling it "false" and "groundless."

The ministry said the Chinese government will set the 2011 export quotas based upon the rare earths output, market demand and the needs for sustainable development. (ANI)