October 19, 2010 / 10:02 PM / 9 years ago

UPDATE 1-US checking if China halted rare earth shipments

* Rare earths important for many products

* China accounts for over 90 percent of production (Adds details)

WASHINGTON, Oct 19 (Reuters) - U.S. trade officials said on Tuesday they were checking on a New York Times report China had blocked shipments to the United States and Europe of crucial manufacturing minerals known as rare earths.

“We’ve seen the news report and are seeking more information in keeping with our recent announcement of an investigation into whether China’s actions and policies are consistent with WTO rules,” said Nefeterius McPherson, a spokeswoman for the U.S. Trade Representative’s office.

Rare earths are used in autos, computers, cell phones and myriad other products.

China, which accounts for more than 90 percent of the world’s production of rare earths, plans to cut export quotas by up to 30 percent in 2011, the China Daily reported on Tuesday, citing an unnamed official with the Chinese Ministry of Commerce.

The move came after the the U.S. Chamber of Commerce, a leading business group, urged President Barack Obama’s administration earlier this month to press China to ease previous rare earth export restrictions.

The New York Times, in a report from Hong Kong published on Tuesday on its website, cited three industry officials as saying China on Monday morning also quietly halted shipments of some of the materials to the United States and Europe.

The action came hours after China’s top energy policy maker, Zhang Guobao, severely criticized the United States for announcing it would investigate if China was violating international trade rules by subsidizing its clean energy industries, the report said.

Analysts say China has huge amounts of economically viable rare earth reserves that are unlikely to be depleted soon, but reckon Beijing’s recent protectionist stance on the exports is a sign it could soon cut exports to a negligible amount in a bid to reserve supplies for domestic consumption.

Japan accused China of halting rare earth shipments last month in the midst of a diplomatic spat over Japan’s detention of Chinese fishing boat captain whose trawler collided with a Japanese patrol boat. (Reporting by Doug Palmer; Editing by Sandra Maler and Jerry Norton)

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