During the last decade, China rare earth (RE) industry has made significant progress and become one of the most important producers in the world. In this paper, the recent developments in both fundamental research and industrial application are briefly reviewed: (1) the development and application of Theory of Countercurrent Extraction, (2) the novel solvent extraction process and its application in industry for separating heavy rare earth elements (Tm, Yb, Lu), yttrium (Y), and scandium (Sc), (3) the on-line analysis and automatic control of countercurrent extraction, (4) the eco-friendly process for RE/Th separation of bastnasite in Sichuan Province and electrochemical process for Eu/RE separation, and (5) the optimized flowcharts for typical rare earth minerals in China.