BEIJING - China's rare earth reserves account for approximately 23 percent of the world's total but are excessively exploited, a government white paper said Wednesday.

China supplies over 90 percent of rare earth products on the global market with just 23 percent of the world's total reserves, according to the white paper titled "Situation and Policies of China's Rare Earth Industry".

The white paper, the first of its kind on China's rare earth industry, was published by the Information Office of the State Council, or China's cabinet, on Wednesday.

It said the country has "paid a big price" for problems in its rare earth industry like excessive exploitation, environmental damages, unhealthy industrial structure, underrated prices and rampant smuggling.

China has seen rare earth reserves keep declining in major mining areas, with the reserve-extraction ratio of ion-absorption rare earth mines in southern provinces slumping to 15 from 50 two decades ago, the white paper said.

In North China's Baotou city, only one-third of the original volume of rare earth resources is still available in the main mining areas, it added.

Meanwhile, outdated production processes and techniques have severely damaged the environment, the white paper said, noting that excessive mining has resulted in landslides and pollution emergencies and even major disasters in some places.

Besides, the industry is also plagued by over-capacity in low-end product manufacturing and the fact that prices of rare earth products fail to reflect their value and scarcity despite a gradual rise since the second half of 2010, according to the white paper.

Rising demand for rare earth products has fueled smuggling, with the volume of rate earth products imported from China calculated by foreign customs reaching 1.2 times the export volume counted by the Chinese customs in 2011, the white paper said.

China is the world's largest producer of rare earths, a group of 17 metals vital for manufacturing products ranging from smart phones, wind turbines, electric car batteries to missiles.