Zhou Xin finds the picture of a giant test tube outside the European Commission building in Brussels a little unsettling.

It's an advertisement for REACH, the new European Union regulation on chemical manufacturing and imports, which comes into effect from June 1. Zhou, an expert with the Chinese Academy of Inspection and Quarantine, and many others like him fear Chinese exporters are not ready for REACH.

According to REACH (registration, evaluation, authorization and restrictions of chemicals), all chemicals produced in large volumes or considered a health or environmental hazard will be subject to registration with the European Chemicals Agency.

"The regulation, although scheduled to take effect from next month, has not been addressed by the majority of Chinese exporters," said Wang Xin, an official with the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ). "In particular, exporters of downstream industries, such as textile, machinery and electronic products have yet to act."

AQSIQ estimates the European directive will affect China's $10 billion in annual exports of chemical materials directly and its $100 billion in textile, toy and machinery exports indirectly.

Urging domestic businesses to attach more significance to the regulations, Zhou said chemical exporters should first "pre-register" with the European side if they want to retain their market share.

REACH will be enacted in phases, beginning with pre-registration from June 1 to Dec 1, 2008. During this period, brand owners, manufacturers and importers of chemicals need to declare information about chemical substances in their products entering the EU.

Zhou said only by "pre-registering" can chemical manufacturers continue exporting to the EU; otherwise the door of the European market will be shut by the end of this year.

But a number of Chinese chemical makers, particularly the smaller ones, have adopted a wait-and-watch policy.

Some Chinese exporters who are actively preparing for REACH complain it is the "most complex" regime they have ever encountered.

Su Biao, a senior engineer with China Petroleum and Chemical Corporation (Sinopec), said preparing for REACH means exhausting work, and some downstream enterprises have declined to cooperate in providing information. The refiner, which is one of China's largest chemical exporters, has 500 to 1,000 types of substances it will have to register with the EU.

But experts warn that Chinese exporters might as well get used to the likes of REACH as such regulations, which now apply for 27 EU member states, are likely to spread to more markets.

The US and Japan will sooner or later adopt such regulations, said Bureau Veritas Hong Kong Vice-President of Services Development David Horlock.

(China Daily May 30, 2008)