What’s Next for China?

While the ban on recycling caught the rest of the world off guard, China’s move towards a circular economy actually began with an academic paper published 20 years ago.

In 1998, Chinese scholars published an academic paper touting the merits of adopting a circular economy in China. At that time, the Chinese State Environmental Protection Administration (SEPA) was already trying to address local environmental degradation and pollution.

The idea of a circular economy intrigued the staff of SEPA and soon after, China launched a series of eco-industrial park pilot projects across the country. Each park had two collocated manufacturing companies, and one company’s waste output would serve as the other’s resource input – literally closing the loop.

The successful pilot projects led to several new laws governing cleaner manufacturing processes. Eventually, the National Development and Reform Commission (NDRC), a high-level governmental body that oversees economic strategic planning in China, became responsible for developing a circular economy – meaning that environmental sustainability was now an economic priority.

Perhaps most importantly, in 2008, China adopted the Circular Economy Promotion Law and became the first country in the world to pass legislation establishing the circular economy as a development strategy.

But as the largest manufacturing – and most populous – country in the world, China began to lose control of its waste consumption.

For four decades, waste and recycling commodities from around the world fed China’s booming manufacturing industry. But over the course of just 13 years, the country was using about 30% of the world’s natural resources and its consumption had tripled. Years of policy change and pilots just weren’t enough.

Taking aggressive environmental action became a matter of survival.

China severely tightened regulations and is poised to enforce the ban on recycling imports.

That wasn’t all: in July, China and the European Union (EU) signed a joint Memorandum of Understanding on Circular Economy Cooperation. The MOU specifies annual coordination meetings for the next five years, as well as the exchange of management systems and policy tools related to:

• Eco-design for products
• Eco-labelling
• Expanded producer responsibility
• Green supply chains 
• Best practices for industrial parks, chemicals, plastics and waste

The Ellen MacArthur Foundation, which promotes the transition to circular economies, notes that China and Europe are the world’s two largest economies, and the agreement “could accelerate adoption of circular economy practices at a global scale, creating potential for a ‘system shift’ towards a low carbon, regenerative economy.”