China’s TBM Export Curbs: Parts and Resales

China will place tunnel-boring machines, specialised components and remanufacturing technology under export controls from Nov. 18. The rules, announced by the Commerce Ministry and customs authorities on Oct. 19, also cover cutting tools, cutterheads and main drive units supplied separately from the machines.

Under Announcement No. 50, exports to “sensitive countries and regions that have disputes with China” will require a Commerce Ministry licence. Shipments to other destinations will require registration and an export certificate. The announcement does not name the countries or regions covered by the stricter licensing requirement.

The Commerce Ministry said on Oct. 19 that the equipment had both civilian and military uses and that the measures served national security and non-proliferation objectives. It said applications that met the requirements would be approved.

Tata Projects shipped a tunnel-boring machine from China to Chennai port for work on the metro’s Corridor 3, according to a June 7, 2023 statement from Chennai Metro Rail. The machine was named Anaimalai and numbered S-98. The operator identified its manufacturer as the Australian company Terratech.

In an October 2018 announcement of an equity partnership with Japan’s JIM Technology, TERRATEC said JIMT made major components, including cutterhead drive units, in Japan. Electrical, hydraulic and other key components came from Japan, Australia and Europe, while the machines were assembled and tested at TERRATEC’s Guangzhou factory.

Foreign-owned manufacturers exporting controlled equipment from China must follow the same destination-based procedures. The provisions governing subsequent transfers outside China apply to controlled items of Chinese origin. Chennai Metro’s statement does not specify S-98’s country of origin for regulatory purposes.

TERRATEC’s tunnelling packages combine machines and ancillary equipment with spares, consumables and personnel to help operate and maintain them during construction. China Railway Engineering Equipment Group lists new-machine production, remanufacturing and engineering services among its businesses. Its overseas service centres supply parts, monitor equipment and provide training.

Once a machine has been delivered, later shipments from China of listed cutting tools, cutterheads or drive units will still need a licence or registration, depending on the destination. The announcement does not impose blanket controls on general repairs, standard parts or personnel services.

If a controlled spare part arrives late, a contractor may be able to draw on stock or find a compatible replacement. Without either, excavation schedules could slip. Suppliers may have to rearrange production and shipping, while contractors could incur extra procurement or idle-equipment costs. Who pays would depend on the contract.

Chennai Metro’s 2023 statement described plans to use 23 tunnel-boring machines for its Phase II underground works, including newly imported machines and equipment remanufactured in India. The machines were to be deployed repeatedly at different locations until construction was complete.

China Railway Group reported in July 2022 that a machine previously exported to Dubai had been bought back and remanufactured in Tianjin as CREC R303, with plans to use it on a railway tunnel project in Fortezza, Italy. Engineers changed the disc cutters’ paths and reinforced the cutterhead faceplate to suit the rock at the new site. The rebuilt machine had an excavation diameter of 11.05 metres. The company said the work met the project’s equipment requirements at a relatively low cost.

After the new rules take effect, overseas contractors and equipment dealers will need permission before shipping controlled used machines of Chinese origin to the specified sensitive destinations. If an application is rejected, the planned delivery cannot go ahead, potentially disrupting the seller’s expected sale proceeds and the buyer’s equipment schedule for its next project.

Article 49 of China’s dual-use export-control regulations, which took effect in 2024, already allows the Commerce Ministry to impose requirements on transfers of specified Chinese-origin items outside China to designated destinations or recipients. Announcement No. 50 does not order machines already overseas to be shut down or recalled, but it provides no specific exemption for existing contracts or previously exported equipment.

The new controls also cover walking excavators and high-altitude wet-mix shotcrete sprayers that meet specified technical thresholds, along with related components or technology. The available records do not establish that the Chennai project has suffered supply interruptions or stoppages under the new rules, or provide a basis for estimating industry-wide losses.

A separate measure, Announcement No. 52, took effect immediately on Oct. 19. When customs questions whether an export is controlled, the shipper must provide contracts, technical documents and other required material within seven working days of receiving notice. The goods cannot be released during the review.

Customs has 15 working days after receiving complete documentation to make a determination or refer the goods to the Commerce Ministry for assessment. The ministry then has 15 working days from receipt of complete documentation to reach a conclusion. Time spent supplying additional documents or testing goods is excluded, and major or complex cases are not bound by those deadlines.