The electrical and electronics (EE) industry has come under increasing pressure to adopt extended producer responsibility (EPR) policies through the introduction of the European Union's Directives on Waste Electrical and Electronic Equipment (WEEE) and the Restriction of Use of Certain Hazardous Substances (ROHS). Based on the findings of 50 questionnaires and in-depth interviews with China's EE manufacturers, this paper investigates the perception of and readiness of companies for implementation of WEEE and ROHS in China. It identifies key difficulties encountered by manufacturers in fulfilling the requirements and evaluates the effectiveness of these two directives in promoting environmental reform. The findings indicate that the extent of companies' responses largely depends on their market structure and client requirements. Supply chain management, raw material testing and cost implications appear to be key challenges in addressing issues surrounding the directives. There is little evidence to suggest that these directives have effectively driven China's EE manufacturers towards systematic eco-design. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.