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Cover Story Series> Business
UPDATED: July 9, 2012 NO. 28 JULY 12, 2012
Embracing the Recycling Way
Steering the country away from highly polluting and energy-depleting model in favor of the circular economy
By Lan Xinzhen

TURNING WASTE TO RESOURCES: A worker turns kitchen waste into agricultural fertilizer and animal feed in a company in the Circular Economy Industrial Park in Chaoyang District, Beijing on July 28, 2010 (LUO XIAOGUANG)

China National BlueStar Co. Ltd., a member of the state-owned giant China National Chemical Corp. (ChemChina), and Cabot Corp., a U.S. specialty chemical company, in April agreed to expand their joint venture in central China's Jiangxi Province. The new project is to turn Bluestar's byproducts into chemical products for reuse. Bluestar is an organosilicon manufacturer, one of its byproducts methyl trichlorosilane will be turned into fumed silica, a raw material for producing organosilicon at Bluestar.

Compared with similar chemical products, fumed silica has little competitiveness in the market because it's more expensive. However, by recycling the methyl trichlorosilane, the production process can avoid pollution caused by emission of methyl trichlorosilane. The project, a representative of the recycling economy, has won support from the Jiangxi Provincial Government and is already being implemented.

The Chinese Government hopes to jump-start similar projects as it seeks a sustainable development model. The preference was shown in the 12th Five-Year Plan for the Circular Economy (2011-15), which has been handed in to the State Council by the National Development and Reform Commission (NDRC). It's expected to be released soon, to become the first national plan for bolstering the circular economy.

To date, the output value of China's circular economy has surpassed 1 trillion yuan ($157.4 billion), offering over 20 million jobs, according to the NDRC. Most industrial output comes from return on technological innovation in highly polluting and energy-depleting industries, such as iron and steel, cement and power generation.

Expectations abound that the output value of the circular economy will reach 1.5 trillion yuan ($236.1 billion) by 2015. A new economic growth point is emerging.

Current condition

China's circular economy is still in its infancy. In 2005, the State Council released a regulation to facilitate development of the sector, including it in the national development strategy. After that, the NDRC, together with the Ministry of Environmental Protection, Ministry of Science and Technology, Ministry of Finance and National Bureau of Statistics, selected 178 companies in 20 provinces to develop this economic model on a trial basis. By setting up pilot projects in highly polluting and energy-depleting iron, chemical and non-ferrous metal companies, the government is exploring an effective model in developing the circular economy.

Zhou Hongchu, a research fellow at the Research Department of Social Development under the Development Research Center of the State Council, often studies circular economy practices in enterprises. He found out some have done pretty well while some are still undergoing technology innovation.

Different regions and sectors are actively accelerating the development of the circular economy and, meanwhile, the country has worked out institutional arrangement, technological path, successful experience and growth pattern that are conducive to its development.

However, obstacles—like small economic scale, low technological level and severe pollution—hinder its development. Also, some multi-industry chains are restricted, which requires the country to clear the way for any viable boom, said Zhou.

"Policy incentives and national fiscal subsidies have been huge in driving the development of the circular economy, and are one of the main reasons for local governments' resolution to facilitate its development," said Zhou.

Major steps

Sitting at a critical point in its industrialization and urbanization, China faces both challenges from economic development and environmental protection. Now is the right time for the country to make the plan.

Yang Chunping, Director of the Circular Economy Research Center of Economic Mechanism and Management Institute under the NDRC, has participated in the research of the plan.

The development of the circular economy in China will be a gradual process. During the 12th Five-Year Plan period (2011-15), the focal point should be in-depth development, shown in the following four aspects, said Yang.

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