<ul><li>Future Industrial Prospect and Opportunities in China, and Green Manufacturing Challenge </li></ul>Professor K.B. ...
Content <ul><li>Major Economic Zones in China </li></ul><ul><li>Electronics Industry & Automotive Industry – Major Industr...
Major Economic Zones &  Surrounding Areas Bohai Economic Zone Yangtze River Delta (YRD) Pan-Pearl River Delta (PPRD) CHINA...
Major Economic Zones 7 Provinces: Hebei ( 河北 ), Shanxi ( 山西 ), Inner Mongolia ( 內蒙古 ), Liaoning ( 遼寧 ), Shandong ( 山東 ), J...
Strength of Economic Zones Source: China Statistics Bureau, Hong Kong Census & Statistics Dept, Macau Statistics and Censu...
Characteristics of Pan-Pearl River  Delta <ul><li>Export-oriented:  </li></ul><ul><li>external trade of Guangdong accounts...
<ul><li>Industry and investment-oriented:  </li></ul><ul><li>Shanghai as the regional leader – finance and banking, automo...
<ul><li>Diversified economy:  </li></ul><ul><li>cultural, political, R&D center - Beijing </li></ul><ul><li>electronics ma...
<ul><li>Electronics Industry & Automotive Industry </li></ul><ul><li>Major Industrial Driving Forces </li></ul>
Electronics Production in China <ul><li>China is  Factory of the World </li></ul><ul><li>Advantage –  Low cost & huge dome...
Electronics Manufacturing Services (EMS) Industry Source: Technology Forecasters, supplied by Market Manufacturing Insider...
EMS in China to Increase Source: iSuppli, June 2003
Automotive Sales in China Source: VDA, Wards.com, International Herald Tribune, China’s Association of Automobile Manufact...
Top 10 Sedan Manufacturing Bases in China <ul><li>China’s Sedan Output  =  2.26 Million Units  (Year 2004) </li></ul>* PPR...
China’s Automotive Components Industry <ul><li>Exports </li></ul><ul><li>2005 Jan – Nov’s :  US$ 7.7 B* ,  53.4% growth </...
Automotive Electronics in China Source: FOURIN China Auto Weekly 2000 - 2010  CAGR >30%
Trend in China’s Automotive Components Industry <ul><li>Automotive Output – could exceed  10 Million vehicles by 2010 </li...
<ul><li>Development of Southern China </li></ul><ul><li>& Hong Kong’s  Advantages </li></ul>
Pan-Pearl River Delta  <ul><li>9 Provinces :   </li></ul><ul><li>Fujian  福建  Guangdong  廣東 </li></ul><ul><li>Guizhou  貴州  ...
Top 9 Industries in Guangdong Source: Guangdong Industry Yearbook 2004 & Internal Source 3 Major Potential Industries 3 Ma...
Next Wave for Guangdong – New & Hi-Tech Industries and Heavy Industries <ul><li>In 2004 added industrial output value of  ...
Electronics and Information Industry in Guangdong <ul><li>In 2004, total output of Guangdong’s electronics & information i...
Automotive Industry in Guangdong <ul><li>Production capacity in 2004:  540,000  vehicles </li></ul><ul><li>Estimated capac...
Petrochemical Industry in Guangdong <ul><li>2005-2010: planned investment  US$21.7 billion </li></ul><ul><li>Output in 201...
Challenges in Guangdong <ul><li>Shortage of energy, land, labors and skill workers </li></ul><ul><li>Labor intensive enter...
“ Front Office - Back Factory” Model Hong Kong   Trading and financial center Southern China Manufacturing base Co-operati...
Position of Hong Kong <ul><li>Major economic engine of the Pan-Pearl River Delta,  financial and service  center </li></ul...
Advantages of Hong Kong <ul><li>Excellent  infra-structure , transportation, telecom </li></ul><ul><li>Sound  legal and ta...
Advantages of Hong Kong <ul><li>Cosmopolitan city – large number of foreign companies,  promotion & exhibition </li></ul><...
Hong Kong Companies As Business Partners <ul><li>Understand both  international and Chinese  cultures, acting as bridge  <...
<ul><li>Finance: IPO, capital raising </li></ul><ul><li>Skilled Workers: education and training </li></ul><ul><li>Professi...
HK – Boosting Technological  Developments <ul><li>Administer under ITC – Innovation & Technology Commission – Funding  ~  ...
<ul><li>Joint funding efforts between the 2 Government to support R&D projects  </li></ul><ul><li>2004 >  US$ 40 million  ...
<ul><li>Green Challenge </li></ul>
Electronic Waste Source: Wen Wei Po
Electronics Industry <ul><li>One of the world’s largest manufacturing industry with over US$1 trillion output </li></ul><u...
Revolution: Product Life-Cycle “ Cradle to Cradle” Remanufacture & Reuse Obsolescence/ Return Customer Use Manufacturing P...
<ul><li>Energy-using Product (EuP) Directive : </li></ul><ul><li>Aims at product design to be energy optimized </li></ul><...
The Total Picture of EU Regulations Product Design Procurement Manufacturing Field Application End of life EuP RoHS Collec...
China’s Legislations <ul><li>“ RoHS-equivalent” law,  “Administration on the Control of Pollution Caused by Electronic Inf...
<ul><li>Electronics Radar </li></ul><ul><li>Broadcast & Television </li></ul><ul><li>Household Electronic </li></ul><ul><l...
China’s Legislations <ul><li>Major requirements of China-RoHS: </li></ul><ul><ul><li>Producers should choose materials, te...
<ul><li>Waste  control measures and systems </li></ul><ul><li>Monitoring on  materials and components  suppliers </li></ul...
<ul><li>Recall  of all goods sold in the markets since the enforcement date for the law </li></ul><ul><li>Fine  on such go...
<ul><li>Policy Framework for the Management of Municipal Solid Waste (MSW) </li></ul><ul><ul><li>Producer responsibility s...
<ul><li>Policy Framework for the Management of Municipal Solid Waste (MSW) – Targets: </li></ul><ul><ul><li>Reduce MSW by ...
Hong Kong Green Manufacturing Alliance
<ul><li>Southern China - hub for electrical & electronic manufacturing: >  40%  of Guangdong’s industrial output  </li></u...
Hong Kong’s Electronics Exports Source: Hong Kong Trade Development Council 2004 Total Electronics Exports =  US$116 B 23%...
<ul><li>A non profit making organization supported by manufacturing and trade associations  </li></ul><ul><li>Alliance off...
<ul><li>Members </li></ul><ul><li>Federation of Hong Kong Industries  </li></ul><ul><li>Hong Kong Electronic Industries As...
<ul><li>Advisors: </li></ul><ul><li>Hong Kong Productivity Council </li></ul><ul><li>Hong Kong Trade Development Council <...
<ul><li>Mission </li></ul><ul><li>To facilitate transformation of HK manufacturing industry into  “Green”  & enhance its c...
<ul><li>Green Standard </li></ul><ul><ul><li>Set standards </li></ul></ul><ul><ul><li>Recognition of consultants, labs, fa...
<ul><li>Purpose  </li></ul><ul><ul><li>Start a dialogue channel with relevant European institutions </li></ul></ul><ul><ul...
Past GMA Events (over 3,000 participants) Organized/Coordinated > 20 events in 2005, e.g. seminars, workshops, conferences...
Coming Events HKGMA Introduction to and Discussion on WEEE & RoHS Hong Kong Seminar: Latest Development of WEEE & RoHS 3/2...
Summary <ul><li>The  3  major economics zones will be China’s industrial growth engine  > 90% </li></ul><ul><li>Successful...
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  1. 1. <ul><li>Future Industrial Prospect and Opportunities in China, and Green Manufacturing Challenge </li></ul>Professor K.B. Chan Chairman and Managing Director, Surface Mount Technology Ltd . Chairman, Hong Kong Green Manufacturing Alliance 7 March 2006
  2. 2. Content <ul><li>Major Economic Zones in China </li></ul><ul><li>Electronics Industry & Automotive Industry – Major Industrial Driving Forces </li></ul><ul><li>Southern China & Hong Kong’s Advantages </li></ul><ul><li>Green Challenge </li></ul><ul><li>Hong Kong Green Manufacturing Alliance </li></ul>
  3. 3. Major Economic Zones & Surrounding Areas Bohai Economic Zone Yangtze River Delta (YRD) Pan-Pearl River Delta (PPRD) CHINA China’s 2005 GDP = US$2.3 trillion (9.9% Growth) World GDP Ranking 1. USA 2. Japan 3. Germany 4. China 5. Britain Source: Gov’t news, Commercial news
  4. 4. Major Economic Zones 7 Provinces: Hebei ( 河北 ), Shanxi ( 山西 ), Inner Mongolia ( 內蒙古 ), Liaoning ( 遼寧 ), Shandong ( 山東 ), Jilin ( 吉林 ), Heilongjiang ( 黑龍江 ) 2 Cities: Beijing ( 北京 ), Tianjin ( 天津 ) Bohai Economic Zone 7+2 9 Provinces: Fujian ( 福建 ), Guangdong ( 廣東 ), Guizhou ( 貴州 ), Hainan ( 海南 ), Hunan ( 湖南 ), Jiangxi ( 江西 ), Sichuan ( 四川 ), Yunnan ( 雲南 ), Guangxi ( 廣西 ) 2 Cities: Hong Kong ( 香港 ), Macau ( 澳門 ) Pan-Pearl River Delta ( PPRD ) 9+2 6 Provinces: Zhejiang ( 浙江 ), Jiangsu ( 江蘇 ), Anhui ( 安徽 ), Henan ( 河南 ), Hubei ( 湖北 ) Shaanxi ( 陝西 ) 1 City: Shanghai ( 上海 ) Yangtse River Dela ( YRD ) 6+1 Covered Area Zone
  5. 5. Strength of Economic Zones Source: China Statistics Bureau, Hong Kong Census & Statistics Dept, Macau Statistics and Census Service 1 Includes eastern China, *Includes China, Hong Kong and Macao Total 2,054 95% 1,207 93% 1 Preliminary Figures Only (may not be 100% accurate) 350 394 463 Populat-ion - million 29% 32% 34% % of the Greater China* 27% 16% 632 Bohai Economic Zone 16% 13% Annual GDP growth 30% 687 Yangtze River Delta (YRD) 36% 735 Pan-Pearl River Delta (PPRD) % of the Greater China* 2004 GDP (US$Billion) Economic Zone
  6. 6. Characteristics of Pan-Pearl River Delta <ul><li>Export-oriented: </li></ul><ul><li>external trade of Guangdong accounts for over 30% of China’s total </li></ul><ul><li>large numbers of foreign-invested manufacturers especially in Guangdong, with high concentration of Hong Kong-invested companies > 60,000 </li></ul><ul><li>Major industries: </li></ul><ul><li>consumer goods, light Industries, heavy industries , petrochemical </li></ul><ul><li>> 40% are electronic related </li></ul>
  7. 7. <ul><li>Industry and investment-oriented: </li></ul><ul><li>Shanghai as the regional leader – finance and banking, automotive manufacturing, tourism </li></ul><ul><li>becoming more internationalized </li></ul><ul><li>Major industries: </li></ul><ul><li>automotive & auto parts manufacturing, electronics equipment and parts, textile, chemical fiber </li></ul>Characteristics of Yangtze River Delta
  8. 8. <ul><li>Diversified economy: </li></ul><ul><li>cultural, political, R&D center - Beijing </li></ul><ul><li>electronics manufacturing base - Tianjin </li></ul><ul><li>local consumption recently attracted lots of investors from Japan, Korea </li></ul><ul><li>Major industries: </li></ul><ul><li>machinery, steel, transport equipment, electronics equipment </li></ul>Characteristics of Bohai Economic Zone
  9. 9. <ul><li>Electronics Industry & Automotive Industry </li></ul><ul><li>Major Industrial Driving Forces </li></ul>
  10. 10. Electronics Production in China <ul><li>China is Factory of the World </li></ul><ul><li>Advantage – Low cost & huge domestic market </li></ul><ul><li>By 2007, electronics production: </li></ul><ul><ul><li>Nearly US$300 Billion ( > 20% of world output) </li></ul></ul><ul><ul><li>Growth rate 12%, double of world’s </li></ul></ul><ul><li>Largest market: handset , DVD, TV </li></ul><ul><li>Top 5: PC, home appliance </li></ul>Source: isuppli, 03/2004 21.1% 1,280 270.1 2007 -- 19.8% 18.1% 17.2% 16.7% China’s % 1,205.8 238.8 2006 6.3% 12.7% CAGR 1,146.8 207.5 2005 1,081.4 185.8 2004 1,001.5 167.2 2003 World China US$Billion
  11. 11. Electronics Manufacturing Services (EMS) Industry Source: Technology Forecasters, supplied by Market Manufacturing Insider 10/2005
  12. 12. EMS in China to Increase Source: iSuppli, June 2003
  13. 13. Automotive Sales in China Source: VDA, Wards.com, International Herald Tribune, China’s Association of Automobile Manufacturers CAGR = 24.2% 2006 Forecast: 6.4 Million Units (12% growth)
  14. 14. Top 10 Sedan Manufacturing Bases in China <ul><li>China’s Sedan Output = 2.26 Million Units (Year 2004) </li></ul>* PPRD figure includes Chongqing, YRD figures includes eastern China Source: Rounded Figures, National Bureau of Statistics of China Jilin 336,800 (15%) Henan 53,500 (2 %) Shanghai 549,900 (24%) Hubei 99,900 (4%) Chongqing 157,300 ( 7 %)  Jiangsu 89,900 ( 4 %) Guangdong 266,500 ( 12 %) Tianjin 219,800 ( 10 %) Anhui 87,000 (4%) Beijing 182,200 (8%) Bohai = 738,800, YRD = 880,200, PPRD = 423,800
  15. 15. China’s Automotive Components Industry <ul><li>Exports </li></ul><ul><li>2005 Jan – Nov’s : US$ 7.7 B* , 53.4% growth </li></ul><ul><li>2004 : US$5.6 B (5 fold over 5 years ago) </li></ul><ul><li>Sales </li></ul><ul><li>2004 : US$53 B (46.5% growth) </li></ul>* Including Components, Accessories & Body Source: Gov’t, KPMG
  16. 16. Automotive Electronics in China Source: FOURIN China Auto Weekly 2000 - 2010 CAGR >30%
  17. 17. Trend in China’s Automotive Components Industry <ul><li>Automotive Output – could exceed 10 Million vehicles by 2010 </li></ul><ul><li>Automotive Components – over 30% growth </li></ul><ul><li>Automotive Electronics – share of automotive component value increase from 10% to 30% </li></ul><ul><li>Foreign/ Joint venture auto makers to procure local low-cost and high quality parts and components </li></ul><ul><li>Domestic brands increase from 25% to over 50% </li></ul>Source: China’s Association of Automobile Manufacturers, KPMG
  18. 18. <ul><li>Development of Southern China </li></ul><ul><li>& Hong Kong’s Advantages </li></ul>
  19. 19. Pan-Pearl River Delta <ul><li>9 Provinces : </li></ul><ul><li>Fujian 福建 Guangdong 廣東 </li></ul><ul><li>Guizhou 貴州 Hainan 海南 </li></ul><ul><li>Hunan 湖南 Jiangxi 江西 </li></ul><ul><li>Sichuan 四川 Yunnan 雲南 </li></ul><ul><li>Guangxi 廣西 </li></ul><ul><li>2 SARs : </li></ul><ul><li>Hong Kong 香港 Macau 澳門 </li></ul>(Growth in real terms) Preliminary figures only, may not be 100% accurate Source: China Statistics Bureau, Hong Kong Census & Statistics Dept, Macau Statistics and Census Service 462.8 12.6% 734.7 Pan-Pearl River Delta 16.9% 8.2% 14.2% GDP growth 372.9 376.0 Other 8 provinces + Macau 6.9 165.5 Hong Kong 83.0 193.2 Guangdong Population (M) 2004 GDP (US$B)  
  20. 20. Top 9 Industries in Guangdong Source: Guangdong Industry Yearbook 2004 & Internal Source 3 Major Potential Industries 3 Major Traditional Industries 3 New Rising Industries 25% 5.4% 43.4 3.7% 9.0 Automotive 18% 1.2% 9.6 1.5% 3.0 Pharmaceutical 8% 4.2% 33.7 6.8% 19.2 Textile 15% 2.1% 16.9 2.4% 6.5 Paper 8% 2.3% 18.1 4.0% 10.3 Construction Materials 12% 3.9% 31.3 6.5% 14.0 Food & Beverage 20% 11.0% 88.0 10.5% 24.6 Petrochem 17% 13.7% 109.6 13.0% 36.5 Electric Machinery 21% 33.8% 271.1 23.5% 71.5 Electronic Information CAGR Share 2010 Output (US$ B) Share 2003 Output (US$ B)
  21. 21. Next Wave for Guangdong – New & Hi-Tech Industries and Heavy Industries <ul><li>In 2004 added industrial output value of top 9 industries: > US$60 billion, contribute to 75.8% of provincial industrial growth </li></ul><ul><li>Fastest growing industries </li></ul><ul><ul><li>Electronics </li></ul></ul><ul><ul><li>Petrochemical </li></ul></ul><ul><ul><li>Automotive </li></ul></ul>Source: Hong Kong Trade Development Council
  22. 22. Electronics and Information Industry in Guangdong <ul><li>In 2004, total output of Guangdong’s electronics & information industry: US$90 billion </li></ul>Source: Hong Kong Trade Development Council Major Manufacturing Bases Products Guangdong, Shenzhen, Zhuhai Software Shenzhen Electronics components, Home audio/visual equipment Dongguan, Huizhou, Shenzhen Handset, Computer
  23. 23. Automotive Industry in Guangdong <ul><li>Production capacity in 2004: 540,000 vehicles </li></ul><ul><li>Estimated capacity in 2005: 650,000 vehicles </li></ul><ul><li>2010’s capacity: 1.6 million ( 1.4 million sedans ) </li></ul>Source: Hong Kong Trade Development Council, Commercial News Unit Sales in 2005 3 Major Car Makers in Guangzhou, Guangdong Start production by mid-2006, initial 100,000-unit capacity Toyota 230,000 Honda 157,500 Nissan
  24. 24. Petrochemical Industry in Guangdong <ul><li>2005-2010: planned investment US$21.7 billion </li></ul><ul><li>Output in 2010: US$88 billion ( 11% of Guangdong’s industrial output), 20% annual growth </li></ul><ul><li>In 2020, oil refinery capacity: 100 million tons </li></ul><ul><li>Foreign investors: Shell, BP, ExxonMobil </li></ul>Source: Hong Kong Trade Development Council, Commercial News
  25. 25. Challenges in Guangdong <ul><li>Shortage of energy, land, labors and skill workers </li></ul><ul><li>Labor intensive enterprises: high costs while low profits </li></ul><ul><li>Competition from Yangtze River Delta (eastern China) and Bohai Economic Zone (northern China) </li></ul><ul><li>Environmental issue </li></ul><ul><li> Need to foster high value-added industries & upgrade industrial structure & environmental manufacturing </li></ul>Source: Hong Kong Trade Development Council
  26. 26. “ Front Office - Back Factory” Model Hong Kong Trading and financial center Southern China Manufacturing base Co-operation Logistics Marketing Product Design Administration & Management Land & utilities Labor Natural resources Supporting industries R&D Technologies
  27. 27. Position of Hong Kong <ul><li>Major economic engine of the Pan-Pearl River Delta, financial and service center </li></ul><ul><li>Over 40% of China’s Foreign Direct Investment - FDI is from Hong Kong </li></ul><ul><li>HK companies operate more than 60,000 factories in Southern China, employing > 10 million workers </li></ul><ul><li>40% of HK Manufacturing GDP is electronics </li></ul>Source: Hong Kong Trade Development Council
  28. 28. Advantages of Hong Kong <ul><li>Excellent infra-structure , transportation, telecom </li></ul><ul><li>Sound legal and tax system </li></ul><ul><li>Mature equity market </li></ul><ul><li>Efficient government with no corruption </li></ul><ul><li>Center for arbitration </li></ul><ul><li>Close political, economic and social relationship with China, </li></ul><ul><ul><li>e.g. Closer Economic Partnership Arrangement (CEPA) - easier access to China markets for Hong Kong-made products, and Hong Kong-based service companies </li></ul></ul>
  29. 29. Advantages of Hong Kong <ul><li>Cosmopolitan city – large number of foreign companies, promotion & exhibition </li></ul><ul><li>Easy communication , English, Chinese </li></ul><ul><li>Risk Management </li></ul><ul><li>IP Rights protection </li></ul><ul><li>Currency management - RMB </li></ul>
  30. 30. Hong Kong Companies As Business Partners <ul><li>Understand both international and Chinese cultures, acting as bridge </li></ul><ul><li>Connections with multinational companies, and foreign countries </li></ul><ul><li>Substantial business experience in China , know “ what not to do ” </li></ul><ul><li>Fast response </li></ul><ul><li>Strong business integrity </li></ul>
  31. 31. <ul><li>Finance: IPO, capital raising </li></ul><ul><li>Skilled Workers: education and training </li></ul><ul><li>Professional Services: legal, accounting, banking </li></ul><ul><li>R&D: co-operation with educational institutions </li></ul><ul><li>Logistics: supply chain management </li></ul>Hong Kong as Service Platform for Guangdong’s Industrial Development
  32. 32. HK – Boosting Technological Developments <ul><li>Administer under ITC – Innovation & Technology Commission – Funding ~ 4 Billion HK$ </li></ul><ul><li>8 Universities </li></ul><ul><li>Establish 5 R&D centers from 2006: </li></ul><ul><li>Auto parts, logistics, textile, nano tech, IT & telecom </li></ul><ul><li>ASTRI – Apply Science and Technology Institute </li></ul><ul><li>HK Science & Technology Park – IC design, photonics </li></ul><ul><li>Cyber Port – Digital entertainment </li></ul><ul><li>HK Productivity Council </li></ul>
  33. 33. <ul><li>Joint funding efforts between the 2 Government to support R&D projects </li></ul><ul><li>2004 > US$ 40 million in 6 areas: </li></ul><ul><li>RFID , Auto-parts, electronics & IT, energy tech, new materials, precision equipments </li></ul><ul><li>2005 > US$ 67 million in 6 areas: </li></ul><ul><li>communication, medical & bio tech, new materials green manufacturing, agriculture </li></ul>Guangdong/HK Technology Co-operation Funding Scheme
  34. 34. <ul><li>Green Challenge </li></ul>
  35. 35. Electronic Waste Source: Wen Wei Po
  36. 36. Electronics Industry <ul><li>One of the world’s largest manufacturing industry with over US$1 trillion output </li></ul><ul><li>Produced 21 million tons of electronics globally: </li></ul>Source: National Electronics Manufacturing Initiative, Inc.
  37. 37. Revolution: Product Life-Cycle “ Cradle to Cradle” Remanufacture & Reuse Obsolescence/ Return Customer Use Manufacturing Packaging/Distribution Eco- Product Design Parts, Materials
  38. 38. <ul><li>Energy-using Product (EuP) Directive : </li></ul><ul><li>Aims at product design to be energy optimized </li></ul><ul><li>Waste Electrical and Electronic Equipment (WEEE) </li></ul><ul><li>Directive : </li></ul><ul><li>Responsibility for collection, recovery and recycling of waste electrical and electronic equipment now rests with producers </li></ul><ul><li>Restrictions of Hazardous Substances (RoHS) </li></ul><ul><li>Directive : </li></ul><ul><li>Upper limit on 6 hazardous materials in electronics products </li></ul>European Legislation on Green Electronics Products
  39. 39. The Total Picture of EU Regulations Product Design Procurement Manufacturing Field Application End of life EuP RoHS Collect , Reduce , Reuse, Recycle WEEE (2007/8/11) (2006/7/1) (2005/8/13)
  40. 40. China’s Legislations <ul><li>“ RoHS-equivalent” law, “Administration on the Control of Pollution Caused by Electronic Information Products” 《電子信息產品污染控制管理辦法》 : </li></ul><ul><ul><li>Announced on 1 March 2006 </li></ul></ul><ul><ul><li>Effective 1 March 2007 </li></ul></ul><ul><ul><li>Manufacturers, importers, and retailers must comply </li></ul></ul><ul><ul><li>Apply to products manufactured in, sold in or imported into China </li></ul></ul>
  41. 41. <ul><li>Electronics Radar </li></ul><ul><li>Broadcast & Television </li></ul><ul><li>Household Electronic </li></ul><ul><li>Special Electronic Apparatus </li></ul><ul><li>Electronic Applications Equipment </li></ul><ul><li>Electronic Telecommunications </li></ul><ul><li>Computer </li></ul><ul><li>Electronic Measuring </li></ul><ul><li>Electronic Components </li></ul><ul><li>Electronic Material </li></ul>China’s Legislations China-RoHS covers following categories:
  42. 42. China’s Legislations <ul><li>Major requirements of China-RoHS: </li></ul><ul><ul><li>Producers should choose materials, technique and craftwork suitable for reuse and recovery </li></ul></ul><ul><ul><li>Other materials in addition to 6 stated in EU’s RoHS </li></ul></ul><ul><ul><li>Labeling: name & content of hazardous substances , “safe-use period” , packing materials </li></ul></ul><ul><li>Can be reviewed every year (vs. 3 years for EU’s law) </li></ul><ul><li>Punishable </li></ul>
  43. 43. <ul><li>Waste control measures and systems </li></ul><ul><li>Monitoring on materials and components suppliers </li></ul><ul><li>Testing of components </li></ul><ul><li>New production process technologies and equipments, e.g. lead-free soldering </li></ul><ul><li>Quality and reliability enhancement </li></ul><ul><li>Management practice </li></ul><ul><li>IT system upgrade, e.g. ERP </li></ul><ul><li> Issues of cost sharing, pressure from customers </li></ul>Legislations Increase Costs of Manufacturers
  44. 44. <ul><li>Recall of all goods sold in the markets since the enforcement date for the law </li></ul><ul><li>Fine on such goods, e.g. First WEEE prosecution - Boots Retail (Ireland), fined €1,200, and costs of €6,865 awarded to Environmental Protection Agency (Jan 06) </li></ul><ul><li>Impounding of goods </li></ul><ul><li>Banned from entering Europe </li></ul>Possible Penalties for Violating EU Regulations
  45. 45. <ul><li>Policy Framework for the Management of Municipal Solid Waste (MSW) </li></ul><ul><ul><li>Producer responsibility schemes to be introduced: </li></ul></ul>Hong Kong’s Initiatives 2009 Rechargeable Batteries 2008 Packaging Materials, Beverage Containers 2007 Electrical & Electronic Equipment, Vehicle Tyres, Plastic Shopping Bags Target Date Products
  46. 46. <ul><li>Policy Framework for the Management of Municipal Solid Waste (MSW) – Targets: </li></ul><ul><ul><li>Reduce MSW by 1% per annum up to the year 2014 </li></ul></ul><ul><ul><li>Increase recovery rate to 45% by 2009 and 50% by 2014 </li></ul></ul><ul><ul><li>Reduce total MSW dumped in landfills to < 25% by 2014 </li></ul></ul>Hong Kong’s Initiatives
  47. 47. Hong Kong Green Manufacturing Alliance
  48. 48. <ul><li>Southern China - hub for electrical & electronic manufacturing: > 40% of Guangdong’s industrial output </li></ul><ul><li>Hong Kong companies operate > 60,000 factories in Southern China (> 10 million workers) </li></ul><ul><li>> 40% of HK manufacturing companies are related to: </li></ul><ul><ul><li>electronics, electrical appliance, watch, toy </li></ul></ul><ul><li>Electronics products shared 45% of HK’s exports (2004) and 14% exported to EU (USD 16.3Billion) </li></ul><ul><li>Not many factories are ready for the directives </li></ul>Why We are Highly Concerned
  49. 49. Hong Kong’s Electronics Exports Source: Hong Kong Trade Development Council 2004 Total Electronics Exports = US$116 B 23% 5% Japan 22% 3% Singapore 20% 7% ASEAN 11% 12% US 28% 14% EU 28% 48% Chinese Mainland Growth Share Major Markets
  50. 50. <ul><li>A non profit making organization supported by manufacturing and trade associations </li></ul><ul><li>Alliance officially formed on February 1, 2005 </li></ul><ul><li>Chairman: Prof. KB Chan </li></ul><ul><li>Secretariat: Federation of Hong Kong Industries </li></ul><ul><li>Steering committee – holds regular meeting </li></ul><ul><li>Government support </li></ul>Establishment of Hong Kong Green Manufacturing Alliance (HKGMA)
  51. 51. <ul><li>Members </li></ul><ul><li>Federation of Hong Kong Industries </li></ul><ul><li>Hong Kong Electronic Industries Association </li></ul><ul><li>Hong Kong Electrical Appliances Manufacturers Association </li></ul><ul><li>Hong Kong Toys Council </li></ul><ul><li>Hong Kong Watch and Clock Council </li></ul><ul><li>Toy Manufacturers’ Association of Hong Kong </li></ul><ul><li>Hong Kong Watch Manufacturers Associations </li></ul><ul><li>Federation of Hong Kong Machinery and Metal Industries </li></ul>Background
  52. 52. <ul><li>Advisors: </li></ul><ul><li>Hong Kong Productivity Council </li></ul><ul><li>Hong Kong Trade Development Council </li></ul><ul><li>6 universities in Hong Kong such as City University of Hong Kong and Hong Kong Polytechnic University </li></ul><ul><li>Observer: </li></ul><ul><li>Innovation and Technology Commission, Government of Hong Kong Special Administrative Region </li></ul>Background
  53. 53. <ul><li>Mission </li></ul><ul><li>To facilitate transformation of HK manufacturing industry into “Green” & enhance its competitiveness </li></ul><ul><li>Activities </li></ul><ul><li>Raise awareness </li></ul><ul><ul><li>Seminar, promotions, Green campaigns </li></ul></ul><ul><li>Provide guidelines for compliance </li></ul><ul><ul><li>Workshops, factory visits </li></ul></ul><ul><li>Technology advancement </li></ul><ul><ul><li>Coordinates R&D, data base, global watch </li></ul></ul>Activities of HKGMA
  54. 54. <ul><li>Green Standard </li></ul><ul><ul><li>Set standards </li></ul></ul><ul><ul><li>Recognition of consultants, labs, factories </li></ul></ul><ul><li>Industry representation </li></ul><ul><ul><li>As spokesman </li></ul></ul><ul><ul><li>Liase and advice Government </li></ul></ul><ul><li>Platform for Networking </li></ul><ul><ul><li>Domestic & international </li></ul></ul>Activities of HKGMA
  55. 55. <ul><li>Purpose </li></ul><ul><ul><li>Start a dialogue channel with relevant European institutions </li></ul></ul><ul><ul><li>Gain understanding of and 1st hand information on related regulations </li></ul></ul><ul><ul><li>Liaise with other countries (member states) </li></ul></ul><ul><li>Meeting with </li></ul><ul><ul><li>European Parliament </li></ul></ul><ul><ul><li>European Commission </li></ul></ul><ul><ul><li>Trade and Commerce Associations </li></ul></ul>HKGMA Delegation to Brussels (5 – 9 March 2006)
  56. 56. Past GMA Events (over 3,000 participants) Organized/Coordinated > 20 events in 2005, e.g. seminars, workshops, conferences, study missions: > 100, 20 Seminar in Protec Japan, Study Mission to Japan Oct 05 > 150 World Electronics Forum (UK) Sep 05 > 600 Seminar on Restricted Substances Directive in China Feb 06 > 300 Asia Electronics Forum & CEF China Jul 05 Attendance Examples of Event Month
  57. 57. Coming Events HKGMA Introduction to and Discussion on WEEE & RoHS Hong Kong Seminar: Latest Development of WEEE & RoHS 3/2006 HKGMA Lecture on Green Manufacturing Compliance Hong Kong GMA Workshop 4/2006 HKEIA Seminar on Electronics Industry and Environmental Development Hong Kong World Electronics Forum (WEF) 9/2006 Organizer Agenda Venue Major Event Date
  58. 58. Summary <ul><li>The 3 major economics zones will be China’s industrial growth engine > 90% </li></ul><ul><li>Successful co-operative model of HK/ Guangdong helps boost the economy of Pan-Pearl River Delta </li></ul><ul><li>Electronics, automotive, petrochemical industries are major economic driving forces </li></ul><ul><li>HK’s technological development play an important role </li></ul><ul><li>Up & coming issue – to comply with green manufacturing </li></ul>

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