electronics industry has woken up to the potentially negative effects
on trade of the new EU directive on hazardous electronics waste, which
came into effect July 1 and was flagged by us earlier as an issue to watch.

a trade forum on the new Restriction on Hazardous Substances (RoHS)
directive, a senior official from the ministry of information industry
told Chinese manufacturers that they needed to improve their standards in the areas of health, safety and environmental impact, according to Xinhua.

China should organise a forum dedicated to RoHS shows how seriously it
is taking the legislation, which requires manufacturers and suppliers
to substitute six dangerous substances with safer alternatives if they
want to sell electronics products in the EU.

Next year, China will introduce similar legislation for products sold in its domestic market — see earlier story.

follows hard on the heels of a related EU directive covering Waste
Electrical and Electronic Equipment, which puts the onus on
manufacturers to recycle old TVs, mobile phones and washing machines.

Taken together, the RoHS and WEEE directives affect 6,800 Chinese electronic suppliers, according to this China Watch report.
The most immediate effects will be felt by SMEs at the bottom of the
supply chain, which account for 30% of China's electronic product lines
and already face pressure from multinationals and larger domestic
enterprises upstream.

Industry sources say making electronic
products compliant with the new legislation adds around 10% to
production costs. So, western manufacturers that source electronic
components in China and have not yet seen price increases from their
suppliers should start asking them questions about RoHS compliance —
and their plans for complying with the forthcoming Chinese version.

A survey
commissioned by Global Sources in December 2005 found that 98% of
Chinese suppliers who were not already RoHS-compliant planned to be so
before the directive came into effect. But,as we all know in China,
there is big gulf between intentions and reality.

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