July 27, 2007 -- Shipments of domestically made machine tools to mainland China have recently been stalled by the more stringent measures taken by mainland authority to approve import permits. Tongtai Machine & Tool Co., one of Taiwan's leading manufacturers of CNC machine tools, said it saw NT$30 million (US$914,630 at US$1:NT$32.8) worth of machine tools stalled by the delayed approval of import permits issued by the mainland authority in June.

Awea Mechantronic Co., a leading manufacturer of double-column machining centers, noted it failed to ship 11 machine tools in the middle of June because of the delayed approval of the import permits from the mainland. Because of the unexpected delayed import permits, the company saw June sales decline 4.11% year-on-year in June, the first slump over the past four months.

Hsu Hung-ping, spokesman of Awea, said domestic machine-tool manufacturers and exporters are worrying about the in-time approval of import permits issued by the mainland authority because the screening procedure for imports of machine tools has been tougher than ever before. In the past, local authority was in charge of the issuance of the import permits. But recently the task has been shifted to the central government, which takes much longer to issue import permits.

Awea said it failed to ship five units of double-column machining centers and six units of C-type machine tools, worth NT$53 million (US$1.61 million), in time in June because of the delayed approval of the import permits from mainland authority.

An executive of Tongtai said over the past few years, mainland authority has been tightening the technical criteria for imports of machine tools in an attempt to attract foreign investments.

Wang Cheng-ching, vice president of the Taiwan Association of Machinery Industry, noted since March of this year, the mainland authority has raised the technical criteria of positioning accuracy, rapid moving speed and feed rate on the imported tariff-free machine tools, forging machines and foundry equipment. Wang said approximately two-thirds of domestically made machine tools fail to meet the stringent criteria. He called for domestic manufacturers in this field take early action to offset the adverse impact of the stringent criteria. Otherwise, exports of domestically made machine tools to the mainland will encounter a big setback beginning from 2008.

The stringent measure has also adversely affected the manufacturer of PCB (printed circuit board) equipment. For instance, Ta Liang Technology Co. failed to ship NT$100 million (US$3.04 million) worth of PCB equipment to the mainland at the end of last year.

Source: Taiwan Economic News
Source: Factiva