Zhou Hongchun, Research Department of Social Development

Research Report No 50, 2008

With the constant increase of incomes for urban and rural residents and the improvement of their consumption level, the number of waste materials, such as scrapped cars, waste hardware, worn-out electric and electronic products, waste paper, waste plastic, used tyres and rubber scraps has gone up rapidly. Some of the materials, being reclaimed and processed, can be reused or recycled, which provides a material base for the development of China's renewable resources industry. On the basis of a systematic study of the recovery, categorization, circulation and processing of the waste materials¹, this paper has summarized the present development of China's renewable resources industry and analyzed the existing problems with a view on laying a foundation for the formulation of relevant policies.

I. Present Development of China's Renewable Resources Industry

The per capita possession of major natural resources in China is lower than the world average, and the contradictions between natural resources and the environment have long existed. Stepping up the efficiency in utilizing natural resources is an inevitable choice for realizing the sustainable development of Chinese economy. "Repair and utilize old or discarded things and let all things serve their proper purpose" is a fine tradition of the Chinese working people, an important way to enhance the efficient utilization of resources, as well as a cultural base for the development of the renewable resources industry.

1．Development of renewable resources industry is just beginning to take shape

In general, over 30 years of reform and opening up, with the constant improvement of socialist market economy, China's renewable resources industry has gradually expanded, regional distribution markets have begun to take shape and the technical competence has been increased.

The waste reclamation system has changed a lot and the systematic functions have been gradually perfected. In the beginning since the founding of the People's Republic of China, companies at various levels for reclaiming various kinds of materials (including retrieval of metals) and companies under the supply and marketing cooperatives for collecting waste materials were set up throughout the country, becoming then the most perfect wastes reclamation system in the world. After the implementation of the policy of reform and opening up, with the constant improvement of China's market economy，the reclamation system set up under the planned economy has started to shrink owing to reposition of the redundant reclamation workers, the workers' switch to other professions or retirement of the workers; and in particular, after the cancellation of the material management departments, the reclamation companies under the material management departments and the supply and marketing cooperatives in some localities have been playing a smaller and smaller role. On the other hand, farmers entering cities for employment have been engaged in great numbers in the wastes reclamation sector, and the profit-oriented public wastes reclamation system aimed mainly at enterprises or industrial parks is growing steadily and is playing an ever-increasing role. Studies show that over 500,000 tons of waste aluminum, 400,000 tons of scrap copper and almost 300,000 tons of lead scraps across China are collected each year by the public reclamation system. The restructuring and development of the waste reclamation system has laid a foundation for the development of China's renewable resources industry.

Some regional distribution centers and trading markets have been established. Since reform and opening up, with the widening income gap between urban and rural residents, especially the updating of the daily necessities of the urban residents, some of the products that fall into disuse are little used or even completely unused and can be utilized again, thus bringing about the circulation of the secondhand goods from big cities to medium-sized and small cities and then to rural areas, which can be felt by the existence of waste reclaiming, processing and trading markets around the cities. At the same time, as supply of resources in China has become tight, import of waste materials has become a burgeoning industry at the port cities in coastal areas. Since 1990s, in such coastal areas as Guangdong, Zhejiang, Jiangsu, Shanghai and Tianjin, importing and unraveling scrap metals has gradually developed into an industry on a large scale; provinces like Shangdong and Hebei are also regions where importing and unraveling scrap metals has been developing fast. In Guluo and Yongxing of central China's Hunan Province, the renewable resources industry has developed into a sector with distinctive characters.

The technical competence of utilizing renewable resources by enterprises has been enhanced. We have found out through our survey that in China the technical competence of a great many small and medium-sized enterprises, which are mainly small workshops or involved in manual operations with renewable resources, is on a low side, whereas some enterprises growing larger and larger have a higher technical competence in processing and utilizing the renewable resources and some have even introduced advanced foreign production lines. Some enterprises have developed and manufactured, jointly with Chinese and foreign scientific research institutes, the equipment or devices suitable for the treatment of China's waste materials and some equipment or devices have been exported to other countries. Some joint ventures or foreign-invested enterprises are using advanced devices and production equipment. All these have effectively enhanced the technical competence of China's renewable resources industry.

2. Remarkable economic results and social effect have been achieved in the development of renewable resources industry

According to relevant studies, during the Tenth Five-year Plan period, the renewable resources reclaimed in China totaled about 400 million tons, with the average annual recovery reaching 80 million tons and the average annual growth rate registering over 12%. In 2006, the reclaimed renewable resources in China, such as scrap metals, waste plastic and waste paper, totaled 102.755 million tons worth of RMB242.098 billion yuan, making up 1.15% in the total GDP of 20.94 trillion yuan in the same year.

Reclamation and import of waste materials have become an important supplement to the supply of resources. While some mineral resources such as copper, iron and aluminum cannot be regenerated, the scrap iron, steel and aluminum can be reused or can be recycled. Developing and utilizing these resources can not only increase resource supplies but can also reduce the damages to the ecosystem caused by the development of natural resources and can cut down the pollutant emissions, so as to relax the pressure on resources and environment for economic development. By reclaiming waste materials or unraveling and processing imported waste materials, some places have developed into relevant bases for the production of raw materials, such as Taizhou of Zhejiang Province, Taicang of Jiangsu Province, Qingyuan of Guangdong Province, Guluo and Yongxing of Hunan Province as well as some renewable resources processing parks in Tianjin.

Reduction of energy consumption and waste emissions helps to meet the target of saving energy, reducing consumption and waste emissions set in the Eleventh Five-year Plan. Scrap iron, steel and aluminium as well as waste plastic consume energy in production and are energy-carrying products; and they can save energy, reduce consumption and waste emissions when used to make new products. Relevant studies show that each ton of scrap iron and steel can be used to produce 0.85 tons of new steel, with 2 tons of iron ores and 0.4 tons of standard coal equivalent being saved and 1.2 tons of slag being reduced; and 10,000 tons of waste paper can be used to produce 8,000 tons of paper pulp, with a thrift of 30,000 cubic meters of wood, 12,000 tons of standard coal equivalent and 1 million cubic meters of water and with a discharge of more than 900,000 cubic meters being reduced and 6 million kwh being saved. Wastes of various kinds recycled in China in 2006 saved the energy equaling 114.8419 million tons of standard coal equivalent, making up 4.6% in the total of energy consumption of 2.46 billion tons in the same year; reduced a discharge of 2.3971 million tons of SO2, making up 9.24% of 25.94 million tons of emissions; and lessened a discharge of 1.258 million tons of COD, making up 8.8% of 14.31 million tons of COD emissions (See following table for details).

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¹Policy Research on Promoting the Development of Renewable Resources Industry in China, No. 70641001-70641009, 2006, an emergency response management project of National Natural Science Fund.