China said Wednesday that the latest media reports about its plan to reduce quotas for rare earth exports by 30 percent in 2011 is "false" and "groundless."

"China will continue to supply rare earth to the world," the Ministry of Commerce said in a statement to Xinhua.

The ministry also said that to protect depletable resources and sustainable development, China will continue to take restrictive measures on the exploitation, production and export of rare earth.

Those measures do not contradict with the World Trade Organization rules, it said.

The MOC statement came after the China Daily, a Beijing-based English newspaper, quoted an anonymous MOC official on October 19 as saying that the country will cut the export quotas for rare earth, which is vital for production of many high-tech products ranging from iPods to hybrid cars, by 30 percent at most next year.

Chinese government will set the 2011 export quotas based on the rare earth output, market demand and the needs for sustainable development, according to the statement.

(Xinhua News Agency October 20, 2010)