"China is not using rare earth as a bargaining chip," Wen said. "We aim for the world’s sustainable development." Wen called for proper controls and regulations for the precious minerals and metals that can be used for electronic devices, electric vehicles and wind turbines but said that China will not close the market.
"It is necessary to exercise management and control over the rare earth industry, but there won’t be any embargo," he said.
"What we pursue is to satisfy not only domestic demand but also the global demand for rare earth. We should not only stand from the present, but should also look forward to the future," he added.
"If the rare earth minerals were used up, how would the world and China deal with the problem?"
Wen, a geology major in college, said he studied rare earth for years.
In the 1980s and 1990s, rare earth metals from China were exported at low prices due to a lack of proper management and extraction technology, as well as chaos in supervision, Wen said.
Some countries accumulated so much rare earth that they are still using those reserves today, he said.
He also assured European investors that China would maintain a good investment environment for foreign businesses.
"Foreign businesses operating in China enjoy the same national treatment as Chinese enterprises do," Wen said.
"The only changes that have taken place are that foreign investment is now under better and more orderly regulation."
China will stick fast to its reform and opening-up policies, which will not be changed, he said. Only through reform and opening-up can China maintain its development, he stressed.
Wen acknowledged that foreign businesses are mostly concerned with issues related to intellectual property, independent innovation, and government procurement.
"All products made in foreign businesses are ‘made-in-China’ products," Wen said. "We will not only protect your intellectual property rights but also your legitimate rights and interests."
On the issue of yuan appreciation, he urged Europe not to press China too much.
Many Chinese export enterprises have slim profit margins and "should the yuan rise by 20 to 40 percent, as demanded by some people, a large number of Chinese export enterprises will go bankrupt, workers will lose their jobs making it hard for society to remain stable", he said. "The world will by no means benefit from a crisis in the Chinese economy."
Also on Wednesday, the premier called on the European Union (EU) to end the arms embargo against China and recognize China’s market economy status to pave the way for further bilateral ties.
Wen made the remarks while co-chairing the 13th China-EU Summit with European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso in Brussels.
The summit should play a role of strategic guidance in promoting China-EU ties and pushing for the recognition of China’s market economy status and an end to the arms embargo, Wen said.
China will work with the EU to achieve balanced and sustainable development of bilateral trade, improve the investment environment and enhance cooperation in financial and fiscal policy-making processes, he said.
Wen said China had expressed its support for, and confidence in, the 27-member European bloc, and believed that a strong and stable EU is conducive to the world as well as to China.
Barroso said the EU-China commercial relationship, worth 327 billion euros ($453 billion) in 2009, was one of the most important in the world and vital for the global economy.
Van Rompuy noted that the EU and China have differences of approach, but "this should not impede our joint will to bring the relationship to a higher level. We should be ambitious and make sincere efforts to achieve progress", he added.
Van Rompuy and Barroso also expressed to Wen "the need for a level playing field in China for our businesses", including the "opening up of public procurement". Wen arrived in Italy late on Wednesday, and met with Italian leaders on Thursday before traveling to Turkey.
Large rare earths deposit found in China
Geologists have discovered a large reserve of rare earths, which are vital for production of many high-tech products ranging from wind power, iPods to electric cars, in central China’s Hubei province, local authorities confirmed on Oct 7.
The newly-found deposit sits at the foot of Mountain Laoyin in Longba township of Zhuxi county, in Shiyan city, a spokesman with the Hubei Provincial Land and Resources Department said.
"Geologists are investigating the make-up, structure, quality, size of the reserve," the spokesman said.
Before the discovery, geologists had also found deposits of rare earths in 12 places in Zhushan, another county in Shiyan, he said.
Local authorities were yet to tap the rich geological resources.
"We are drawing up plans and measures to prevent the rare earths resources from being illegally mined," the spokesman added.
Rare earths, a class of 17 chemical elements that include minerals such as dysprosium, terbium, thulium, lutetium and yttrium, are widely used in the fields of the most sophisticated science and technologies like electronics, aviation, wind energy, electric vehicles and mechanical manufacturing.
The Inner Mongolia autonomous region in North China has the largest reserves of rare earths in the country, or about 75 percent. China is the world’s largest rare earth producer, supplying more than 90 percent of the global demand.
China has stressed the sustainable development of rare earths mining.
"What we pursue is to satisfy not only the domestic demand but also the global demand of rare earths. We should not only stand from the present, but should also look forward to the future," Premier Wen Jiabao said Oct 6 at the sixth China-EU Business Summit in Brussels.
Wen also reaffirmed that proper control and regulations were important and that China would not close the market.
"If the rare earths minerals were used up, how would the world and China deal with the problem?" he said.