In recent years, rare earths prices have continued to slump. Meanwhile, the demand and consumption for rare earths from domestic enterprises have increased significantly. In view of this circumstance, Chinese government has gradually restricted exports. The U. S. and European Union have appealed to the World Trade Organization (WTO) arguing that Chinese restrictions on the export of rare earths give Chinese companies an unfair advantage. WTO ruled against China. Based on this situation, the value of the rare earth and the influence factors of sustainable development of China rare earth industry is analyzed, the problems in China rare earth industry are pointed out. Finally, certain measures and proposals are proposed. © 2015, Editorial Office of Chinese Rare Earths. All right reserved.