In Shanghai, the city’s administration excels in its commitment to electronic waste recycling, an ongoing ordeal that emerged from China’s digital boom. Urban mining potential is boosted by a collection plan integrating online private-initiative platforms, such as Alahb, with a door-to-door modality, to suit all requirements. The same also goes for used clothes and textiles, recovered using the internet or with traditional dumpsters and then either donated to solidarity projects, resold abroad, or most significantly recycled and reintroduced into the production chain 85% of the time.

Moving northwards, in Quingdao, former German colony and current Chinese beer capital, Semizentral Resource Recovery Centre collects wastewater and food waste from a population of about 12,000 people, converting it into power, heat, fertilizers and non-drinking water. In 2016, it hit its 100% wastewater reuse target, thus managing to almost halve the municipality’s water consumption.

Further north, Tianjin’s Teda, one of the Country’s largest industrial parks, has equipped itself with an Eco Centre collecting industrial sludge and waste materials from local plants, to be recycled thanks to the most innovative technologies available. Giving birth to a green and circular transition of the entire production process.

Flying south to the industrial megalopolis of Shenzhen, which has become the Asian model for public transport electrification, Gem China, a company dealing with recovery and valorisation of a variety of waste (mainly electronic), currently recycles 3 million tonnes of materials per year: 300,000 tonnes are in the form of used batteries leading to the extraction of nickel, cobalt and other rare earths. These are extremely precious for the industrial sector but highly polluting if released into the environment.

Circular China is already here. It often clashes with other aspects of China’s complex situation. In December 2015, for instance, Shenzhen hit international headlines for a harrowing tragedy destroying dozens of factories and killing more than 70 workers: literally smothered by an avalanche of waste and debris from a huge landfill. Industrial waste mismanagement is thus counterbalanced by cutting-edge experiences and case studies praised in international reports, such as the one published in 2018 by the Ellen McArthur Foundation. Such examples bring pride and joy, confirming the path chosen by the People’s Republic to move towards a circular transition of its economy. Besides, the cycle notion has always been engrained in the Dragon’s essentially Taoist culture. Not to mention pragmatism, which (albeit ethically debatable) goes hand in hand with China’s approach to communism, at least since Den Xiaoping’s times, and now urgently demands the embrace of the Xúnhuán jÄ«ngjì (“cycle economy”).

Laws and Five-Year Plans

“The circular economy concept was introduced in China in the early 90s by researchers and activists drawing on policies and practices already in use in Countries such as Germany and the United States,” explains Professor Hao Tan, now Professor at the Newcastle Business School University, Australia; as well as a consultant for Chinese industry and high-tech companies. Therefore, resource circularity principles first penetrated the world of industrial research and then reached lawmakers’ desktops. The Circular Economy Promotion Law dates back to 2008, approved under Hu Jintao’s Presidency with the aim to “improve the efficiency in using resources, protect and improve the environment and implement sustainable development.” While China’s Green New Deal watchwords were already all there, the real motivations actually lay in the term “efficiency”. “The concern for the environment is certainly not the main reason for the Chinese government’s commitment to the circular economy. The true drive is security in the supply of resources. The same applies to energy security and to laws on renewables,” points out Patrick Schröder, researcher at Chatham House Institute, who actively collaborates with the State Council of the People’s Republic of China on circularity issues.

Despite the purely practical motivations leading up to its enactment, the Promotion Law is currently facing criticism for being too theoretical and not practical enough. “Detailed guidelines are missing and many reckon this has prevented an actual law implementation,” explains Hao Tan. The revision, currently being debated, is likely to move towards a better definition of tangible objectives and specific goals for single materials, adopting part of the work already done for the last three five-year plans and for the 2017 Circular Development Leading Action Plan. Such document, Hao Tan reminds us, sets rather precise and ambitious objectives: “a 15% increase by 2020 (compared to 2015 levels) of resource production rate; a recycling rate of the main waste materials amounting to 54.6%; a 73% reuse rate of industrial solid waste; and above all the start of a circular transformation of 75% of national industrial parks and 50% of local ones.”

Industrial Parks and Symbiotic Systems

In the circular transition challenge, China’s trump card is its industrial parks. As Professor Hao Tan and his colleague John Mathews wrote on Nature (March 2016), more than half of China’s manufacturing is concentrated in these large production hubs. Creating circular ecosystems by exploiting the proximity of factories and plants and shared services (in many instances already existent), is obviously easier than starting from scratch or trying to connect distant structures. Green retrofitting of such large industrial areas is what China’s ministers are investing in, giving birth to new types of eco-clusters managed through various financing lines. “Circular Economy Industrial Parks – explains Schröder – refer to the National Development and Reform Commission, while Green Industrial Parks are promoted by the Ministry for the Environment and Ecology, and Low Carbon Industrial Parks have been enacted by the Ministry for Information Technology.” Although the former mainly focus on the efficiency of resources and the latter on CO₂ emission cuts, ultimately their goals complement each other.

They are inspired by the “industrial symbiosis” model, which was first developed in the 80s in Kalundborg in Denmark, in a site that became a textbook case to be studied all around the world. The principle is none other than that of a natural ecosystem where waste from any link of a chain feeds the following link. Materials, energy, water and by-products are thus shared and circulated, optimising resource yield, slashing waste, cutting CO₂ emissions and reducing externalities. The Suzhou New District, “The Venice of China” not too far from Shanghai, is one of the most inspiring examples of such restructuring. Already chosen in 2005 to be part of a pilot project on the circular economy, together with 12 other parks, today it hosts about 4,000 manufacturing companies. Its symbiosis examples include printed circuit board industries, using recovered copper instead of “virgin” metal. Furthermore, at Tianjin’s Teda (Economic-Technological Development Area), “wastewater synergic use saves about 300 tonnes of water a day,” explains Schröder. Experimental parks are then monitored so that collected data can improve processes and inform future national policies.

Waste, Restrictions and Eco-Dictatorships

While the structure of industrial clusters is an insider job, domestic waste is the public façade through which media depict China’s circular metamorphosis. Over the last few decades economic growth and the extraordinary thrust to urbanisation (today 57% of Chinese people lives in cities) have transformed the People’s Republic, once a rural nation, into a Country with the world’s largest middle class. And the middle class, at any latitude, boasts the highest consumption rates, generating waste and affecting resources. What is more, the peculiar consumption habits of Chinese people make matters worse: takeaway food (those of you who visited China know very well how tempting that can be…) and online trading generate abnormal amounts of packaging, most of which is not recycled.

As usual, the Chinese government faces the situation head on, with top-down approaches that leave little space for trust in simple and selfless individual goodwill. In spring, for instance, the umpteenth zero waste city pilot programme, including huge urban areas such as Schenzhen and Chongquing, began. Other programmes, with more or less stringent goals, carry on in many other cities including Shanghai, where it seems that the social credit system is being experimented to convince citizens, threatened with penalties to their “social credit scores,” to commit to separate waste collection. Journalist Lily Kuo, on The Guardian (12^th July 2019), even talks about “eco-dictatorship” and about people getting cold feet when it comes to choosing in what dumpster to discard chicken bones or a broken smartphone. “Skipping altogether educational methods for sheer imposition is certainly a very Chinese approach” comments Patrick Schröder. “After living in Beijing for many years, I can say that there are reasons for that. In the block of flats where I used to live, despite many separate waste collection signs, nobody cared and I was actually advised not to bother! I can testify that the voluntary approach does not work: middle classes do not worry about generating waste. Although there are several associations endeavouring to raise awareness on this issue.”

“Shanghai’s pilot programme – adds Schröder – is an attempt to bring together the circular transition’s various facets ranging from domestic waste collection and management, to recycling and supplying secondary raw materials for the industry.” The implementation of restrictions on waste imports from abroad in 2018 not only put a strain on the recycling routes of many Western Countries, but also on Chinese industries that are currently faced with a shortage of raw materials. “The most immediate solution – continues Schröder – seemed to be the implementation of recycling processes, starting from domestic waste in China. However, this initiative is not sufficiently successful, since industries are still complaining about not having enough high-quality materials.”

The Future Depends on Cities

Up until now, the industrial sector has been at the core of China’s transition towards a circular economy. But now it’s the turn of cities.

In China, there are over 100 cities exceeding one million inhabitants and some of the planet’s largest urban areas with the highest concentrations of people (Shanghai hosts 26 million inhabitants, with the municipality of Chongquing reaching even 30 million). By 2030, 67% of the population is expected to live in cities and already today the urban system alone is responsible for 82% of GDP. The Chinese government boasts extensive projects for its cities and is keen on presenting them as innovation hubs where science-fiction technologies can be experimented (mobility, social credit, face recognition systems, artificial intelligence) as well as the home of solutions with which to reduce the impact of middle-class lifestyles.

The Ellen MacArthur Foundation believes this to be true. In 2018 it released a detailed report on the coming opportunities of the circular economy for China, mainly focusing on the role urban systems have to play. Along with the contribution of an adequately organised separate waste collection amongst citizens, to the textile and electronic industries, an interesting aspect of the research is the will to extend the concept of a circular economy to practices not strictly connected to industrial processes. Therefore, mobility, the construction sector and the food system come into play. Consumption optimisation, waste elimination, product (and building) life extension are links in a chain that must be improved. Solutions, for example, are provided by digital platforms such as Alibaba’s JuTuDi now experimenting a new agriculture model on demand so as to avoid production surplus and unnecessary waste in the food supply chain.

Further upstream, we can talk about design and planning. With regards to the built environment, for instance, the rapid obsolescence of buildings in China is a scourge. Buildings crop up like mushrooms after the rain but deteriorate after just a few years. On top of the need to monitor the quality of building sites and materials, some help could come from offsite construction. Indeed, the Chinese government is planning to reach 30% new prefab builds by 2026. This approach could also create increased modularity, simpler disassembly and therefore increase component reuse. Finally, in order to extend product life and consumption, a sharing economy is crucial. From cars to scooters, from bikes to flats, in China there is a plethora of platforms for sharing goods. True, everything must be carried out sensibly, lest we find ourselves with more images of abandoned bicycle cemeteries, as happened in Xiamen. Or, to avoid the same fate as the Shenzhen manager who, spurred by the Mobike frenzy, invented an umbrella sharing service, producing 300,000 coloured umbrellas and losing them all in just a few weeks.

Gem China, http://en.gem.com.cn/gongsijianjie

Circular Economy Promotion Law of the People’s Republic of China, www.lawinfochina.com/display.aspx?id=7025&lib=law

H. Tan, J. Mathews, “Circular economy: Lessons from China,” Nature, March 2016, www.nature.com/news/circular-economy-lessons-from-china-1.19593

Suzhou New District, http://english.snd.gov.cn

L. Kuo, “‘A sort of eco-dictatorship’: Shanghai grapples with strict new recycling laws”, The Guardian, 12 July 2019, www.theguardian.com/world/2019/jul/12/a-sort-of-eco-dictatorship-shanghai-grapples-with-strict-new-recycling-laws

Zero waste city pilot program, http://en.chinacace.org/events/view?id=6080

Ellen MacArthur Foundation, New report highlights opportunity for China’s cities to lead global circular economy transition, September 2018, www.ellenmacarthurfoundation.org/news/new-report-highlights-opportunity-for-chinas-cities-to-lead-global-circular-economy-transition

Interview with Patrick Schröder, researcher at Chatham House

by G. M.

From China to the World

Dr. Patrick Schröder is senior research fellow at the Energy, Environment and Resources Department at Chatham House, where he specialises in studies on the global transition towards an inclusive circular economy. From 2008 to 2015 he lived in Beijing, working on climate change cooperation programmes between China and the EU.

We talk with Patrick Schröder – researcher at Chatham House, the Royal Institute of International Affairs – about the influence of Chinese domestic policies and international trade disputes on the development of a global circular economy.

Since the Law for the Promotion of the Circular Economy was passed in 2008, many Chinese policies seem to have focused on the development of the circular economy. Has this commitment turned into tangible achievements?

“The Promotion Law has certainly been very important to spread the concept of circularity. Over the last few years, various regulations and specific policy measures have been passed to support the implementation of the Promotion Law. The circular economy has also been included in China’s 12^th and 13^th Five-Year Plans with goals for the reduction of waste and pollution. A number of studies and data show that pollutants have been reduced along with the adoption of circularity criteria in production processes.

Having said that, we cannot really say the Promotion Law has achieved the target of a circular transition of China’s economy. During my last stay in Beijing, this year in August, I talked to members of the China Association for Circular Economy and with various other stakeholders. Currently, there are discussions about a revision of the 2008 Law underway. Many experts and policymakers would like to eliminate the term ‘promotion’ to have a more direct ‘Circular Economy Law’. The issue is certainly not just the name, but the fact that the Promotion Law is not effective enough to guarantee a true transition and these groups would rather include more tangible and specific efficiency targets for several materials.

In this regard, researchers like myself and colleagues from Chatham House have been involved in an international task force of the China Council for International Cooperation on Environment and Development to provide recommendations on the circular economy, including on specific targets for materials and industries for the 14^th Five-Year Plan which will start in 2021. In the past, a number of such targets on waste reduction and resource consumption, which we recommended to China’s State Council, were actually included in previous five-year plans.”

What has been – if any – the role of public opinion in pushing the government towards circular policies?

“I don’t think public opinion has had any significant influence. In China, people don’t know the Promotion Law, which came along more as an industrial development strategy. For instance, early this year I taught a course on the circular economy at the Sussex Business School and almost half the students were Chinese. I asked them what they thought about the Promotion Law and only a couple of them knew what it was.

It is certainly true that the perception of problems on environmental issues has changed in China as well. People are suffering because of air pollution and are increasingly worried about their health. Increasing household waste is a nagging issue and its mismanagement has caused serious concern in large cities that are running out of space for landfills. This has led the government to take charge, fully aware that the amount of waste produced is no longer manageable, and it has become a political priority to reduce it.”

The decision to apply strict restrictions on waste imports for recycling was introduced in this context. How are these restrictions working?

“I believe they are working. Although detailed data is difficult to find, what we can see is that exports from Europe and the USA to China have drastically reduced and have been diverted to other countries, especially to Southeast Asia. We must go deeper, though, in order to understand how the system has really changed. The demand for recycled materials for industry is still strong in China, that’s where the market is. Thus, ultimately, what happens is that waste is processed in other countries, but recycled materials, for instance pellets from plastic, return to China where they are used to manufacture new products that are likely to be re-exported to Europe and the USA. Actually, it seems it is just the intermediate phase of the recycling process that has been moved to other countries.

However, accurately tracing these routes is rather complicated due to the lack of data and transparency of waste shipments. But as the global economy becomes more circular, it will be increasingly important to understand the dynamics of waste and secondary raw material trade flows. As well as how they are influenced by geopolitical factors, such as international trade disputes and the laws of countries involved, China and the USA above all.”

What are the effects of the China-USA trade war on the global development of the circular economy?

“There is no systematic evaluation of these impacts yet. Generally speaking, we can say that they will be negative, especially because the USA and China are the two biggest global economies and account for a large share of global trade. In order to develop the circular economy effectively on a global level, their active collaboration is crucial. So far, both countries have enjoyed a mutually beneficial trade of secondary resources and waste, particularly various types of scrap metals, paper and waste to be recycled, but now this relationship is under threat. For the time being, damage is still manageable, but should the trade war continue there will be repercussions on the economies of other countries as well.”

Let us talk about the Global South: what role could China play, in particular through the Belt and Road Initiative, in the promotion of the circular model in developing countries?

“This is the very question that I asked in Beijing this summer. The truth is that at the moment there are not many projects on this, but many people I spoke to agreed that it is time to start getting serious about it. I believe that the next phase of the One Belt One Road Programme, after the initial efforts to build infrastructure, will include projects which include circular economy principles. One option could be investing in recycling facilities and potentially replicating China’s eco-industrial parks and industrial symbiosis models.”

Such as the one built by Shenzhen-based GemChina in South Africa?

“How they deal with battery recycling is certainly an interesting example. I think what is happening – due to the restrictions we were talking about – is the relocation of recycling industries outside China. But these are not relocations included in the One Belt One Road plan: unfortunately, there is a lack of coordination between policy and industries and this complicates things. Chinese factories were no longer access secondary due to the new import restriction policies, nevertheless they have been quick to react and built new plants elsewhere. The problem is that all this has been done in a hurry without any environmental impact assessments in the countries where they moved to.

What is encouraging – as far as the development of circular policies for the New Silk Road is concerned – is investor interest. For instance, the Industrial and Commercial Bank of China (ICBC), one of the most important Chinese banks, is creating green investment lines for the One Belt One Road Programme, which will hopefully be implemented. Now more than ever, it is paramount to highlight the importance of the circular economy for investors, businesses and countries, not only to reduce waste, but also to support climate mitigation actions.”

Chatham House, www.chathamhouse.org

Belt and Road portal, https://eng.yidaiyilu.gov.cn

In this article: images of a transitioning China. Pictures taken between 2011 and 2012 on the roads of Beijing, Shanghai, Nanjing and Suzhou. Credit: Martino Cipriani

Top image: Zhangjiajie – YHBae/Pixabay