There are at least three obvious trends in the developments of automotive market in China: the evolution of emission standards from Euro Ⅱ to Euro Ⅲ, the demand of lean-burn gasoline engine and the time of diesel vehicles. The latest application and advances of exhaust catalysts by Chinese researchers, using some high effcient, economical and durable methods to meet these changes in emission regulations laws and engine technologies, were described. Rare earth oxides, such as lanthana, ceria-based solid solutions and perovskite-type oxides, are widely used as excellent promoters for thermal stability, oxygen storage capacity and oxidation/reduction activity in these catalysts. Four phases in the development of the auto exhaust catalyst industry in China since the mid 1970s were reviewed. It is argued that China will become the center of global auto exhaust catalysts industry in the next decades with its economic, technical and environmental incentives, which greatly depends on the research and development of rare earth. There are at least three obvious trends in the development of automotive market in China: the evolution of emission standards from Euro II to Euro III, the demand of lean-burn gasoline engine and the time of diesel vehicles. The latest application and advances in exhaust catalysts by Chinese researchers, using some high effcient, economical and durable methods to meet these changes in emission regulations laws and engine technologies, were described. Rare earth oxides, such as lanthana, ceria-based solid solutions and perovskite-type oxides, are widely used used as excellent promoters for thermal stability, oxygen storage capacity and oxidation / reduction activity in these catalysts. It is argued that China will become the center of global auto exhaust catalysts industry in the next decades with its economic, technical and environmental incentives, which greatly depends on the r esearch and development of rare earth.