China has instituted a system of export permits for rare earth metals, used in hi-tech goods such as mobile phones, the government said, with state-run media describing the move as an abolition of export quotas.

China accounts for over 90 percent of global production of rare earths, a term covering 18 metals vital for the production of smartphones, hybrid car batteries, wind turbines, steel and low-energy light bulbs.

Export permits will be required, but will be issued whenever a valid trade contract is presented, the ministry of commerce said in a statement last week.

At the same time, officials abolished a quota system at the centre of a World Trade Organization (WTO) case, the government-run Shanghai Securities News reported Monday.

Total Chinese exports never reached the quota limit, but it lost the long-running dispute when the WTO ruled in August that the system violated global trade rules.

The United States, the European Union and Japan had complained that China was limiting exports in a bid to drive up prices.

The complaint also said the quota was designed to gain market advantage for domestic producers with cheaper access to the raw materials.