Chinese exporters may see their production costs rise by five to ten percent, if a new policy to force exporters to abide by environmental protection rules comes into force, said an official from the Ministry of Commerce.

The ministry has issued a notice that exporters would be banned from trading abroad for one to three years if they were found violating environmental protection rules.

Exporters would pay extra for discharge facilities and environment testing, ministry official Chen Guanglong said on Monday.

Some exporters have ignored the country's regulations on environmental protection while striving for lower costs, according to the notice jointly published by the commerce ministry and the State Environmental Protection Administration.

Analysts said they were the most severe measures the commerce ministry had adopted to crack down on environmental violations in the last four years.

The commerce ministry would authorize local departments to stop approving export-related applications, such as export quotas and licenses, contracts for processing, and applications for participating in national or regional trade fairs, of violating companies, based on reports from local environmental watchdogs.

The applications would be processed only when local environmental watchdogs confirmed that corrections had been made in these companies.

The punitive measures were targeted at five sectors, including metal processing, chemicals, cements, textiles and light industry, said Chen, as these sectors accounted for 80 percent of the country's energy consumption.

Under the pressure of higher costs, some small and medium-sized enterprises would face closure, Chen said.

The ministry would soon launch a special inspection of the enforcement of environmental rules in exporting enterprises, said Chen.

(Xinhua News Agency October 23, 2007)