China is the world's largest producer and exporter of rare-earths.
These are elements which are critical to the manufacturing of high-tech products, including smartphones, wind turbines and car batteries, among other things.
However, the rare-earth industry in China is beset with long-existing problems such as illegal mining and smuggling.
Chen Zhanheng, Vice Secretary General of China's Rare Earth Industry Association, says the core issue they need to deal with is excess capacity.
"But beyond excess capacity, illegal mining and illegal production also have a huge impact on the industry. Certain raw ores are illegally dumped off by individuals as recyclable materials, then later extracted. This has formed an illegal industry chain which has a very bad influence on the development of China's rare earth industry. So, we need to crack down on that. "
Prices for most rare earths extracted in China dropped by around 10 percent last year due to companies flooding the market due to over capacity.
Xin Guobin, China's vice-Minister of Industry and Information Technology, has told a symposium that consolidation is already underway.
"To deal with current problems in China's rare earth industry, we are consolidating and upgrading the industry in terms of production and mining procedures. So far, three firms have already formed rare-earth blocs, while another three are still working on it."
In 2014, the Chinese government singled-out six different rare-earth industry leaders, promising them support to create large rare-earth producers by buying-up small-scale operations.
Xin Guobin says it’s the government's hope this will be completed by the summer.
"By the end of June, we must complete the consolidation of all rare earth mines and firms in China. While this happens, we will continue to work with the companies through our various ministries to support the newly-formed rare-earth blocs, especially those who finish their consolidation on time. "
The Ministry of Industry and Information Technology expects there will be a reduction of rare-earth smelting this year through improved output controls and increased competitiveness.
Authorities also say the rare-earth industry in China will have the world's best technology in use by the end of 2020.
