China is the world's largest producer of rare earth resources, the world's largest producer of rare earths, consumer and exporter. Over the years, the domestic rare earth industry due to overcapacity serious, industry competition, the loss of rare earth resources to low price. In contrast, Japan, South Korea and other countries, although no rare earth resources, but has been purchased from China for 20 years of rare earth products as a reserve, and gradually control the international pricing power of rare earth. After a sharp decline in the previous period, the current price of rare earth is still a historic low.

In recent years, the rapid development of rare earth in the field of new materials, 2008 has accounted for 52.5% of the total amount of rare earth consumption. Among them, permanent magnet material is the most important part in the field of new material consumption. At present, permanent magnetic materials such as neodymium iron boron have been widely used in many fields such as electronic information, automobile industry, medical equipment and energy transportation. At the same time, with the decline of the technology continues to progress and cost, in many emerging areas, such as wind power, electric vehicles, energy saving and environmental protection household appliances and industrial energy-saving motor, neodymium iron boron permanent magnetic material also showed strong development potential. Due to the high cost of labor, the global rare earth permanent magnet material industry has been completed by the western developed countries to the developing countries. 2008, China's production of sintered neodymium iron boron 51000 tons, accounting for 81% of global production, becoming the world's major supplier of rare earth permanent magnet material.