The government has drafted a rule that will lead to the creation of a producer-oriented system for collecting and recycling waste electronics equipment (WEE) this year.

The draft rule by the National Development and Reform Commission (NDRC) still awaits approval of the State Council, according to an NDRC official who declined to be named.

According to the draft rule, manufacturers of computers, TV sets, refrigerators, washing machines and air-conditioners will be held responsible for recycling their products.

Enterprises that refuse to participate in the recycling program will face severe punishment, which could include fines of up to 100,000 yuan ($12,500) or having their licences revoked, said the draft.

Few manufacturers recycle their products at the moment, mainly because most of them cannot afford to.

According to the draft, the NDRC and the Ministry of Finance plan to establish a special fund to defray some of the manufacturers' costs arising from the program.

Industry professionals also urged manufacturers to focus more on "eco-design", or environmentally friendly components and manufacturing techniques, to help them cut their costs over the long term.

The regulation is expected to affect a wide range of appliance and electronics equipment makers from around the world, since China is emerging as both a major manufacturing base and a big market for home appliances and electronics products.

The EU unveiled a rule last year requiring all manufacturers of electronics products destined for export to the EU to have their own recycling systems.

"The implementation of the rule is in line with the EU's regulations," said the official.

The official added that many European firms that have established manufacturing operations in China export products to the EU.

According to experts, the rule will reduce the environmental pollution caused by stockpiled WEE and also promote the rehabilitation of second-hand electronics products.

The country's WEE recycling market is currently loosely-managed, with many household vendors recycling and selling WEE, raising concerns about pollution and quality, according to Wang Yukui, deputy secretary-general of the country's National Home Electric Appliances Service Association.

"The rule, together with two previous laws in the field, will form a strict network to regulate the recycling market," said Wang.

However, some experts said the market for re-used goods would be tight.

Xu Xiangdong, deputy secretary-general of the China Home Appliances Association, said WEE recovery companies would suffer losses if less than 400,000 pieces of WEE are produced each year.

The regulation comes when the amount of so-called e-waste in China is at a peak.

The NDRC has forecast that about 4 million refrigerators, 5 million washing machines and as many TVs will be discarded nationwide in the next few years.

The NDRC set up four WEE reproduction pilot projects at factories in Beijing, Tianjin, Qingdao and Hangzhou this month.

The Beijing project has the capacity to recycle and reproduce 1.2 million pieces of WEE.

Experts estimate that Beijing produced 115,200 tons of e-waste last year alone, including 3.6 million old TV sets, refrigerators, washing machines, air-conditioners and personal computers as well as 2.3 million mobile phones.

Experts say Beijingers will throw away 158,300 tons of e-waste a year by 2010.

Editor: Yan