China's Printed Circuit Industry in Changing Phase; Environment and Standards are Key

Driven by domestic and overseas markets and policy changes, the increasing requirements of environmental protection and China's policy changes to industry development, the Chinese electronic circuit industry is entering into a changing phase for adjustment and relocation in which environment and standards are key for sustainable development.

The Chinese PCB industry has quickly developed in past years and the strong growth of output in China is one of the main drivers for world development. However, with regard to the challenges facing China's PCB industry, environment and standards issues should be solved for further development.

Turning Point in the PCB Industry

According to CPCA 2007 information department statistics, the total output of China's PCB industry reached 150 million square meters--a value of US $15.5 billion (with an exchange rate of 7.5 RMB to 1 USD). According to the Administration of Custom General, the import and export total reached US $20.37 billion with a deficit of US $1.23 billion. The of China takes 30% of the world total. However, since 2007, the PCB industry in China has entered a turning point compared to traditional development and growth.

Presently, the global green industry is the trend. After the EU released RoHS, WEEE and REACH directives, China RoHS was released taking energy saving, emission reduction, consumption saving and efficiency as the primary objects. China is enforcing a strict currency policy, reduced the cost advantage of processing trade industry of the country.

With the global price of oil reaching and exceeding US $140 a barrel, weak USD and a strong RMB have increased raw materials prices. Domestically, the increased requirement for waste treatment, tax reform, new labor laws and salary increases have also increased production costs. In the first half of this year, many enterprises, including PCB and CCL, increased their sales revenue, but profit is dropping significantly. This is a general condition, which has serious impact upon the industry as a whole.

Facing increasing costs, China's production enterprises should take an immediate active strategy by communicating with the upper and lower levels of the industry supply chain. Factories should have a clear understanding of the cost and impact, the change to the product structure and develop competitive and innovative technologies and products with management improvement to be competitive in global market. Meanwhile, product prices should be flexible according to the cost-change environment.