Exports to the EU of household appliances manufactured in China
could plunge by a third because of failures to meet new standards
on hazardous materials, an industry expert warned yesterday.
The EU introduced on July 1 new restrictions on hazardous
substance content in electrical and electronic appliances, which
could cost China US$30 billion worth of exports, said Yu Zhipu of
the China Chamber of Commerce for Import and Export of Machinery
and Electronic Products.
No Chinese companies in this sector are immune to the EU
directive on the restriction over the use of certain hazardous
substances in electrical and electronic equipment, said Yu,
secretary-general of the chamber's Home Appliances Division.
The regulation set a maximum concentration of 0.1 percent by
weight of many environmentally hazardous substances such as lead
and mercury, which are inevitable in the manufacture of electrical
goods.
Large manufacturers such as Haier and TCL have prepared
themselves for the regulation issued in 2002 but many small and
medium-sized companies have failed to comply.
Experts say manufacturers have to upgrade their own production
equipment and ensure the standards are applied by those who supply
them with parts. It's estimated that the new regulation will bring
an average rise of 10 percent to production costs.
A survey cited by Tuesday's Guangzhou Daily showed that
half the electronic manufacturers on the Chinese mainland had
failed to meet the restrictions on hazardous substances with 64
percent predicting price hikes of up to 10 percent.
Yu said small and medium-sized appliance manufacturers unable to
absorb the rising costs could be forced to give up the European
market.
Citing an unnamed official with the Ministry of Information
Industry the newspaper said the restriction on the use of dangerous
substances was a "global trend."
The Chinese government has planned to release their own version
of appliance standards in March and the official warned there was
little time left for domestic manufacturers to catch up with the
trend.
China earned US$426.75 billion from exports of machinery and
electrical products last year, which was 56 percent of the
country's total foreign trade. The EU accounted for US$90.48
billion of the sector's exports, making it the second largest
market after the US.
(Xinhua News Agency July 5, 2006)