The Chinese State Council has recently begun circulating their plans to ban 24 types of solid waste materials, including unsorted recovered paper (RCP), by the end of 2017. The Chinese government’s plan also outlines improvements to the country’s solid waste import management system.
This ban is the next step in a lengthy cleanup effort that began with China’s Green Fence initiative in 2013 and continued with their National Sword campaign beginning earlier this year.
The General Administration of Customs, the Ministry of Environmental Protection, and other departments were ordered to implement the necessary changes, including import license restrictions, stricter application examinations, and import volumes reductions.
While restricting waste imports, China is supporting domestic collection and processing with the goal of upping domestic material recovery by more than 100 million tons by 2020. In just over two years from now, the Council intends to completely phase out imports that can be substituted with domestic materials, particularly non-wood fiber such as bamboo, reeds, bagasse, and straw.
Will China’s material bans hurt the US economy?
China is a BIG import market for US, European, and Asian material exporters. Producers and Shippers may soon feel the burn if they have not put in place contingency plans that include shipping to alternative material markets.
In 2016 alone, China accepted 7.3 million tonnes of recycled plastics with a value of $3.7 billion and a global import market share of 56 percent. International Trade Centre data shows that the US accounts for 10 percent of this volume. Recovered scrap paper is also a major US export, amounting to hundreds of millions of dollars in trade.
Officials at the Institute of Scrap Recycling Industries (ISRI) have warned China’s drastic measures could increase unemployment and slash tax revenues. Robin Wiener, president of ISRI, notes US export activities directly support more than 155,000 workers, who earn on average $76,000 each and collectively pay over $3 billion in federal, state, and local taxes.
Past studies conducted by the institute suggest that the US recycled export market generates nearly $29 million in total economic benefits.
Because China is the single largest recovered export market to the US, some question whether alternative markets, including the Middle East, Latin America, Bangladesh, India, and Pakistan, can match Chinese demand. For the time being, though, these import countries could offset potential revenue losses.
The stricter material ban, however, may be an opportunity to create waste sorting and processing jobs in the US since China, the main competitor, is out of that market.
The transition to a global industry without China will be painful for most; however, forming partnerships with experts in the industry is going to be crucial for future success.
If you generate, handle, or process waste and would like to strengthen your position in this uncertain market, please contact our industry veterans at Berg Mill Supply. As we have done in the past, Berg Mill continues to work hard on creating solutions to overcome fluctuating commodity markets, including opening markets in other countries, forging strategic alliances, and improving domestic processing capabilities.