China said it will meet World Trade Organization rules by applying the "same policies" to domestic and overseas rare earth companies, a day after the United States and Europe slammed China on its new quotas of the highly sought minerals.

"China will, according to WTO standards and requirements on rare earth production, processing and export, adopt the same policies for domestic and overseas enterprises," Ministry of Commerce spokesman Yao Jian told reporters at a regular news briefing.

He did not elaborate on the policies, but said China would continue efforts to "balance and coordinate" domestic production, consumption and exports of rare earths.

China has long held that its rare earth policies are in compliance with WTO rules. But the U.S. and Europe have complained that China's policy is unfair, with uneven quotas on exports and domestic consumption of the valuable minerals used in high-tech manufacturing.

China accounts for as much as 97 percent of the world's rare earth output, but has said that mining the minerals is devastating to its environment.

Yao said skyrocketing prices for the minerals in recent years was "good for improving rare earth management and environmental protection measures".

Under WTO rules, a country can limit exports to conserve exhaustible natural resources or protect the environment if it also applies the restrictions to its domestic market.

But other countries have called into question the veracity of China's claims, arguing China saw its near monopoly production of rare earth and slashed exports to drive up prices without effectively limiting domestic production and consumption.

China has issued its rare earth export quotas for the second half of 2011 bringing the year total to 30,184 tonnes -- slightly under 2010 quota levels -- in a move the EU called "highly disappointing".

U.S. and EU officials have speculated about filing a rare earth complaint against China at the WTO, particularly after the global trade governing body ruled against China in a recent raw materials case that some say sets a precedent.

The EU's trade commissioner Karel De Gucht, in Beijing for talks, on Thursday told reporters he thought China was coming to the realisation that it could not have two separate policies for exports and domestic use of rare earths.

"It [rare earth production] has environmental ramifications. But if that affects the production for exports, it should also go for internal consumption," he said. (Reuters)