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Firms Respond Differently to EU Directives

Chinese electronic and electric equipment enterprises will be charged an extra recycling fee for their exports to the EU market as two green directives take effect in the EU countries.

The WEEE (waste from electric and electronic equipment) directives became valid from Aug. 13, while directive of ROHS (restriction on hazardous substance) will take effect July 1 next year.

According to the directives, 1-20 euros (US$1.23-24.6) will be levied on each color TV set or a mobile phone exported to the EU market. The payment is even higher for bigger appliances.

Statistics from China Chamber of Commerce for Import and Export of Machinery and Electronic Products show the directives will affect eight types of products such as IT products, home appliances, lighting equipment and electronic toys. Based on this year's trading volume, the directives will affect US$5.6 billion worth of China’s exports to the EU.

Insiders said domestic makers have to pay some 15 percent more, which will cut Chinese products price in the EU marketplace.

"While it seems to be a trade barrier, the directives will call attention from Chinese enterprises on the sustainable product development in the long run," said Ken Xu, sales executive of TUV Rheinl and Group (Shenzhen), a Germany-based international certification firm that provides testing and certification for products exported to Europe.

Xu is busy helping local enterprises to formulate some new requirements based on WEEE and ROHS. According to Xu, most large enterprises, joint ventures or solely foreign owned enterprises are making full preparations for the new directives. They have carried out or will carry out stricter production technical requirements than WEEE and ROHS require.

"We began to make preparation for the directive from the end of last year and now we already ask for the report from our suppliers to ensure the components are designed for the recycle use," said Liu Zhiguo from China Great Wall Computer Shenzhen Co.

However, most small domestic enterprises, believe that WEEE and ROHS will lead to increased product costs, and thereby smaller profits in trade, not realizing their potential challenges to all the relevant industries.

"We are supplying a foreign lights brand with accessories and seldom pay attention to our end product. We can only wait and see for the response from the foreign company," said Tao Lian, manager of Huizhou-based Changxing Lighting Co.

(Shenzhen Daily September 5, 2005)

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