Abstract: In order to accurately determine the healthy development of China's rare earth industry,this paper proposed the main ideas of rare earth industry health warning system,then conducted a comprehensive analysis of the many factors that build health warning indicator system of rare earth industry,determine the critical point of rare earth industry health warning,and analyzed the early warning and forecast the warning degree. We can monitor and evaluate the China's rare earth production, consumption by the warning systems,and provide accurate data and analysis conclusions for the rare earth industry decision-making departments.