The World Trade Organization's rejection of China's appeal concerning restrictions on exports of rare earths will foster a healthier and more market-oriented industry, because it will stimulate competitiveness and inspire innovation when companies are no longer restricted by the export quota system, said industry leaders.

Chen Zhanheng, deputy secretary-general of the China Rare Earths Industry Association, said during the annual Baotou Rare Earth Forum in Baotou, Inner Mongolia autonomous region, that "China's loss in the appeal process will prompt the nation's rare earth producers to increase output of high added-value products in a fairer and more orderly market".

Chinese manufacturers will be pushed to increase their automation levels and improve product quality to achieve large-scale production, he said.