China has set up a rare earth association in a bid to streamline the sector's development, as it continues to face criticism over its policies.
Beijing has imposed quotas on exports of rare earth elements, a move which its critics say has pushed up prices.
Last month, the US, Japan and the European Union filed a case at the World Trade Organization, challenging China's restrictions.
China produces more than 95% of the world's rare earth elements.
These elements are critical components in the manufacture of various high-tech products, including DVDs, mobile phones, flatscreen TVs and hybrid batteries.
China's trading partners have alleged that Beijing has been trying to utilise its position as the world's biggest producer of rare earths to benefit domestic manufacturers.
They have argued that by limiting exports, Beijing has kept prices low for domestic buyers, while international firms have had to pay more.
It's also claimed that Beijing was trying to put pressure on international manufacturers to move to China.
The state new agency Xinhua said the new association was likely to help with efforts to cope with international trade frictions and disputes.
China has denied these allegations and said that it imposed the restrictions to ensure that excessive mining of these elements did not cause environmental damage.
Su Bo, an industry vice minister, said Beijing is looking to further tighten its policies for the sector.
"China will continue to clean up the rare earth industry, expand rare earth environmental controls, strengthen environmental checks, and implement stricter rare earth environmental policies," Su was quoted as saying by the Xinhua news agency.
According to Xinhua, the association will have 155 members, including some of the biggest producers of rare earths, and report to the Ministry of Industry and Technology which regulates production of these elements.