China's production in rare earth resources fell short of expectations for the first half of the year, with most Chinese companies reporting losses, a senior official said.

According to data from the Ministry of Industry and Information Technology, China's rare earth production during the first half was 41,000 tons, accounting for 87 percent of the planned production quantity.

"At present, major Chinese rare earth production companies are facing deficits and some of them have stopped production," said Ma Rongzhang, secretary-general of the China Rare Earth Industry Association during the Fifth China Baotou Rare Earth Industry Forum held in Baotou, the Inner Mongolia autonomous region, on Thursday.

The rare earth industry made a total profit of 2 billion yuan ($317 million), said Chen Yanhai, head of the department of raw materials within the Ministry of Industry and Information Technology.

An industrial insider with 30 years' experience said a majority of the companies that reported losses are medium and small-size companies currently facing mergers and restructuring.

Since last year, the global outlook on the rare earth industry has been gloomy, with increasing production from the United States and Australia affecting Chinese companies.