When Xin Yu first heard of REACH, the European Union's new regulation on chemicals, his immediate response was to wonder if it was the same as RoHS, another EU regulation forbidding the use of hazardous substances.

It was a natural reaction for Xin: he doesn't have much time to think about regulatory changes these days. In fact, now is the busiest time of the year for the textile exporter in Ningbo, Zhejiang Province. He will fly to a factory in Nanchang, Jiangxi Province, on Monday, meet an American customer in Shanghai on Wednesday, and then return to Ningbo to check his suppliers' production schedule.

Xin's business, with exports of less than $10 million a year and half of those going to EU nations, is also too small to afford the REACH's registration fee.

The lack of awareness among Chinese companies about REACH concerns Zhang Xiangchen, director general of the WTO department of the Ministry of Commerce (MOFCOM).

"In the past three years, when the EU was drafting the new regulation, the reaction from our companies was very poor, but US and Japanese businesses followed the whole process," said Zhang.

REACH - the Registration, Evaluation, Authorization and Restriction of Chemicals - took effect on June 1. The new EU regulation requires manufacturers or importers of over 1 ton of chemical substances a year to register at European Chemicals Agency (ECHA) in Helsinki, which was also established on June 1.

Companies are urged to pre-register from June 1 to December 2008. Manufacturers or importers with over 1,000 tons must register before December 1, 2010, or they will be banned from the market. Companies that manufacture over 1 ton of chemicals a year should register before June 1, 2018.

"REACH is arguably the most ambitious chemicals legislation in the world. It aims at the highest level of health and environmental protection, while at the same time fostering innovation and competitiveness," said Gunter Verheugen, vice-president of European Commission at the opening of ECHA.

The regulation has been regarded as the largest technical barrier to trade that Chinese companies have ever faced.

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"Our estimation is that 5 million kinds of products, almost everything, will be impacted and this is likely to cause a reshuffling of our trade with the EU," said Zhou Chun, director of petroleum and chemicals department with China Chamber of Commerce of Metals, Minerals, and Chemicals Importers and Exporters (CCCMC).

The EU estimates that some 30,000 chemical substances will be covered, as well as products containing the substances, including textiles, automobiles and electronics.

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