China is reportedly planning more stringent environmental standards for miners of rare earth elements (REE), which could raise export prices for these critical metals. State media said that the Ministry of Environmental Protection has approved new rules that would drastically cut the amount of pollutants that REE miners are allowed to produce. The regulations will be released in February and will give Chinese REE miners two to three years to comply, industry sources told The China Daily. China’s commerce industry in December said that it would cut REE export quotas by 35 percent for the first half of 2011. China controls over 95 percent of the global market for REEs–elements critical for manufacturing a host of consumer electronics, defense technologies and green energy applications. Click here for a detailed analysis of the REE market by guest editor Elliott Gue. Please note that one of the REE-related picks in our Metals and Mining Portfolio has already booked significant gains.

In another sign of rising levels of domestic consumption in China, US automakers recorded a banner 2010 in mainland sales. Ford Motor’s 2010 sales grew by 40 percent year on year to 582,467 vehicles in China. Sales in December jumped 52 percent to 56,880 units. General Motors (GM) saw its 2010 sales grow by 28.8 percent year over year to a record 2.35 million. In doing so GM became the first foreign automaker to pass the 2 million mark for auto sales on the mainland. Sales of Chevrolet cars surged 63.4 percent to 543,709 units in 2010. Company executives said that GM would roll out the Chevrolet Volt in China this year as well as begin sales of the Baojun passenger car. China is now GM’s largest market and the company rolled out 11 new or upgraded models in the mainland last year.

India’s food inflation climbed to its highest point in more than a year, raising expectations of an interest hike this month. The food price index rose 18.3 percent year-on-year in the week ended Dec. 25, 2010, the fifth straight week of rising prices. Onion prices rose over 23 percent in the same time period. Analysts told Reuters that Indian fiscal authorities could raise interest rates by 50 basis points in its Jan. 25, 2011, review in an effort to tame inflation. Although high prices for staple foods such as onions and tomatoes were driven in part by unseasonal rains, poor infrastructure and low agricultural productivity were cited as contributing factors to the rise in food prices.