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China's Circular Economy: Current Landscape and Future Development

By Arcas & Callisto Consulting


More than ten Chinese partners are represented in the RECONMATIC project by China Association of Circular Economy, including policy departments, industry associations, research units and enterprises, such as China Academy of Building Research, China Building Materials Academy and Beijing Chaoyang Environment Group etc. China is playing an essential role in circular economy around the world. Let’s have look at China’s current landscape and its future plan.


Circular economy is an economic system that aims to eliminate waste and use resources sustainably. Circular systems promote reusing, sharing, repairing, refurbishment, remanufacturing and recycling to create a closed-loop system that minimizes resource use, waste generation, pollution and carbon emissions. In the EU, the public and governments started to debate about circular economy began in the 1980s and 1990s. In the US, more than half of the states have enacted legislation to promote recycling since the mid-1980s. Japan is the country with the most comprehensive circular economy legislation and one of the early developed countries in the world to have established a legal system for a circular economy. The basic principle of all Japanese relevant laws is to mobilize society as a whole to reduce its environmental impact by curbing the consumption of natural resources.


The concept of “clean production” was introduced in China in the 1990s, and theories and examples from Germany and Japan on developing a circular economy were introduced into the country around 2000. By 2005, the State Council of China issued "Several Opinions on Accelerating the Development of Circular Economy", when the concept of the circular economy really began to take the stage in China. Since then, the National Development and Reform Commission (NDRC), including the Ministry of Environmental Protection, and other government departments have begun to issue guidelines and case studies on the implementation of the circular economy. Between January 2017 and January 2018, China issued a total of 68 policies related to the development of the circular economy, covering almost every major national department.


Why must China develop a circular economy?


China has a large amount of natural resources, but the per capita possession is small. Most mines are lean and there are few rich mines. The distribution of resources is also uneven. Of the 45 major minerals that have been proven in China, in 2010, only 21 were able to meet the needs of economic development, and in 2020, the number dropped to only 6. Therefore, if China is to change its excessive dependence on the international market for resources and safeguard national economic security, it must change its mode of economic growth by developing a circular economy and speeding up the establishment of a circular economy system. This would ease the growing pressure from the population, resources and environment, reduce the dependence on key resources importation, reduce environmental pollution, and resolve the conflict between economic development and environmental protection.


What has China achieved in the circular economy?


China's circular economy-related laws and regulations were based on international best practices and China's actual situation, starting with the most polluting and resource-dependent industries and gradually expanding to other sectors. The relevant regulations have steadily progressed from energy conservation, recycling and pilot demonstrations to industrial integration and policy support on technological innovation and taxation. It can be said that the concept of circular development has been integrated into China's fundamental policies, and in the future, more laws, regulations and policies will be introduced to support the development of the circular economy.


Beijing Chaoyang Circular Economy Industrial Park, built in 2002


Workers monitor the machines, which are used to process bulk waste from residential communities in Chaoyang Circular Economy Industrial Park. [Photo by WANG JING/CHINA DAILY]


Compared to 2012, China's energy consumption per unit of GDP in 2021 has dropped by 26.4%, Co2 emissions per unit of GDP has dropped by 34.4%, water consumption per unit of GDP dropped by 45% and the output rate of major resources has increased by about 58%. In addition, with the construction of pilot demonstrations of circular economy, circularization of industrial parks, and the improvement in the comprehensive utilisation of bulk solid waste, the comprehensive utilisation rate of bulk solid waste has reached 56.8% - an increase of nearly 16%. The annual treatment volume of key electrical and electronic products has increased by 73 million units, and the regulated treatment rate increased by 44%. The recycling volume of 9 major types of recycled resources, including scrap iron and steel, non-ferrous metal scrap, plastic, and paper, reached 385 million tonnes, more than twice the volume in 2012.


Although China has achieved certain results in promoting the development of the circular economy, overall, China's circular economy is still in its infancy, and there are still many difficulties and problems that need to be solved in both theories and practices.


The challenges China is facing

The legal and economic systems need improvement


The concept of circular economy has only been promoted in China for a relatively short period of time, therefore, the governing legal system is yet to be improved, especially in lacking systematic, operable and corresponding implementation rules or other safeguarding measurements.


Lack of key technologies


As a new and advanced form of economic model, circular economy is a systemic project that integrates economy, technology, and society. It calls for a revolution in technology through institutional innovation and is an advanced form of New Industry. Development of the circular economy relies on the support of technological innovation. In some industries, the lack of advanced technologies, outdated processes and ageing technical equipment meant that it cannot support the development of the circular economy.


Misconceptions still exist


Some people believe that the development of a circular economy does not fit in with China’s current development state and is somewhat ahead of its time. Those who hold this view believe that China is still a developing country and that the main problem to be solved at present is poverty eradication. Some people have a rather one-sided understanding of the circular economy that it is only applicable to certain areas and fields. Some believe that it’s only possible to "develop first, treat later" and merely setting up standards for the disposal of pollutants is good enough for now. However, green food, green consumption and a green environment have become an international trend for development. After China's accession to the WTO, the internationalised market means a greater emphasis on the unification of economic, social and ecological interests, and the need for a circular economy has long been present.


Five-Year Plan (2021-2025) for Circular Economy

Development


China’s high-level economic planner, The National Development and Reform Commission (NDRC), released the 14th Five-Year Plan (2021-2025) for Circular Economy Development on 7 July, outlining a blueprint for circular economy development in the country. By 2025, a model of recycling production will be fully implemented, green design and clean production will be widely promoted, a resource recycling industry system will be established and a resource recycling system covering the entire society will be completed. By then, resource utilisation efficiency will be substantially improved, and the replacement rate of primary resources by renewable resources will be further increased, said the plan.


China’s 14th Five-Year Plan for Circular Economy Development


Under the plan, by 2025, the productivity of major resources is set to increase by about 20% compared with 2020. The energy consumption per unit GDP and water consumption per unit GDP will be reduced by 13.5% and 16% respectively. The comprehensive utilisation rate of crop stalks will remain above 86%, and the comprehensive utilisation rate of both bulk solid waste and construction waste is set to reach 60%. By 2025, the use of wastepaper and scrap steel will hit 60m tonnes and 320m tonnes respectively, and the output of recycled non-ferrous metals will reach 20m tonnes.


By then, the output value of the resources recycling industry will hit 5 trillion Yuan (CNY). The NDRC said it will boost clean production in key industries by making corresponding policies specific to petrochemicals, chemicals, coking, cement and nonferrous metals. It will promote the circular development of industrial parks and promote the comprehensive utilisation of waste, gradient utilisation of energy, and the recycling of water resources.


At the same time, China also needs to:

  • Continuously improve the laws and regulations

In the legislative process, "reduce, recycle and decontaminate " should be established as a legislative requirement for the development of the circular economy, providing legal protection for the fundamental transformation from end-of-pollution treatment to source control.

  • Adjust the industrial structure and optimise the economic pattern

China plans to build a resource-saving industrial production system focusing on energy saving, material saving and water saving, develop high-tech industries, upgrade traditional industries, and increase the proportion of high-tech industries in the national economy. China plans to also implement an import and export policy that is conducive to the sustainable use of resources and environmental protection.

  • Strengthen the support for science and technology

The technological carrier of the circular economy is environment-friendly technology. In this sense, it is essential to propose a green technology support system for the development of a regional circular economy. The "green technology support system" includes: (1) recycling technologies. These include waste recovery and recycling technologies, resource reuse and substitution technologies, etc.; (2) environment-friendly technology, including environmental engineering technology, pollution control technology and clean production technology, etc.; (3) valorised low-emission technologies, mainly including information technology, environmental monitoring technology, network transport technology, as well as zero-emission technology, sustainable development technology, etc.

The Shenzhen East Waste-to-Energy Plant in Shenzhen, China. Designed by Schmidt Hammer Lassen Architects and Danish firm Gottlieb Paludan Architects. It utilises the most advanced technology in waste incineration and power generation.

  • Promote a sustainable view on resources and values

A sustainable mindset needs to be established to see circular economy not as a simple ‘waste economy’, nor as merely a matter of technical process within each industry, but as an epoch-making social change to the last industrial revolution and economic growth and an accelerator for building a harmonious society. The RECONMATIC project aims to improve automation in the construction waste recycling process and promote high-added-value recycling. The project stands for Automated solutions for sustainable and circular construction and demolition waste management, therefore, will develop a digital information management system for stakeholders' collaboration and waste traceability and push circular economy in the built environment to another level.


Ref.

Ning Li, Wei Zhao, Research on the main problems and countermeasures for the development of circular economy in China

李宁,赵伟,我国循环经济发展存在的主要问题与对策措施研究 2010


Sedex China Circular Economy Research Report 2021

2021循环经济调研报告


Yu Yunfeng China unveils 5-year circular economy plan for environmental goals

于云峰,中国公布循环经济五年规划以实现环境目标 2021

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