Sand ban threatens Taiwan's building boom

China's move to end sand exports could hit island's construction firms


TAIPEI - SINGAPORE is not the only place facing a sand ban. Taiwan has found itself in a similar predicament.

Following Indonesia's recent ban on sand exports to Singapore, China has also imposed a ban on sand exports, citing environmental concerns aggravated by illegal sand dredging across the country.

China's move has triggered worries in Taiwan that a shortage of the building material could dampen the island's construction boom.

The Chinese sand ban, which took effect this month, has dealt another blow to Taiwan's construction industry, which is already reeling from price hikes due to a shortage of other raw materials.

However, Taiwanese officials say there is no immediate threat of a sand shortage as domestic supply - mainly from the dredging of rivers - accounts for 80 per cent of the island's total demand.

Mainland sand exports make up the remaining 20 per cent.

Still, some Taiwanese companies say they are beginning to feel the pinch as work resumed at construction sites after the long Chinese New Year break last month.

Some 25 per cent of construction projects across Taiwan could be delayed as a result of the projected sand shortage, the Economic Daily News reported yesterday, citing industry sources.

A shortfall in supply would also lead to a further hike in the price of Taiwanese sand, they said.

A senior Taiwanese mining official confirmed yesterday that the island stopped receiving sand shipments from the mainland from this month.

But Mr Chen Tai-shiung, deputy director of the Bureau of Mines, said Taiwan has enough sand stockpiles to last for at least 11/2 months.

'We imported about 1.2 million cubic metres of sand from China a month. But we have some 2 million in stockpile. So there is no immediate threat of a dearth,' Mr Chen told The Straits Times.

Meanwhile, the Taiwanese government has authorised the quasi-official Taiwan External Trade Development Council to negotiate the ban with China.

Taiwan will implement a series of 'emergency measures' from next month if the negotiations fail to yield results by then, said Mr Chen.

These measures include importing 3 million cubic metres of sand from the Philippines, crushing rocks for sand and increasing the volume of sand dredged from rivers.

But businessmen said these alternatives would push up prices because of the higher costs involved.

Some were hopeful that the mainland may agree to postpone the ban, citing a similar extension of a deadline by Beijing last year.

The Chinese government first announced in March last year that it would impose a ban on sand exports, citing environmental concerns.

But Beijing later decided to postpone the move to allow affected parties a longer grace period to seek alternative sources.

Shipments to Taiwan, Hong Kong and Macau form the bulk of China's sand exports. According to Taiwanese statistics, it sent 60 per cent of its total sand exports to Taiwan in 2005.

The mainland revisited the issue this year by announcing on Jan 5 that it would restrict sand exports from this month.

But barely two weeks into the ban, Beijing said on Tuesday that it would resume sand exports to Hong Kong and Macau on March 25.

A spokesman for China's Cabinet-level Taiwan Affairs Office said the government would also 'consider' easing the export restrictions to Taiwan.

But some observers said that Taiwan may not enjoy the same privilege, especially following Taiwanese President Chen Shui-bian's recent provocative remark that the island 'must be independent'.

Chinese Commerce Minister Bo Xilai had said on Monday that the sand issue would not be a problem if Taiwan had returned to mainland rule, like Hong Kong and Macau.

Beijing's latest move has underscored the potential economic damage China could inflict on Taiwan, which also imports other Chinese raw materials such as coal used for generating power.

'The best strategy is still to be self-reliant. The government should open up more areas for river and land dredging,' said Mr Lin Kuang-yang, president of the Taiwan Chamber of Gravel Quarrying United Society.

The impact of China's sand ban appeared to have a lesser impact on Japan, which also imports Chinese sand.

Japanese companies can get alternative sources of sand from within the country by crushing rocks from mining activities, said Japanese economic officials.