By staff reporter LU RUCAI

Before Xu Feng sold his old personal computer to a mobile scrap collector, he called Dell's recycling hotline. Since the end of 2006, Dell has run a recycling service for both corporate and private users. When he was told Dell could "collect his computer within a week, but wouldn't provide any recompense," Xu decided to sell it to a mobile scrap collector for RMB 200.

Xu's story points to a fundamental problem with China's E-waste recycling industry. Despite the immense amount of electronic waste being generated in China, "official" recycling operations simply don't receive enough material to make recycling a profitable business. Instead, 90 percent of China's electronic waste goes to family workshops, whose manual dismantling practices create highly toxic secondary pollution.

The accelerating technological redundancy turnaround times are making the waste problem even worse. Based on CBC Market Research's latest survey of the urban cell phone market, over 60 percent of China's legion of mobile users have replaced their phones at least once. Replacement frequency is the highest in Guangzhou, where users have gone through an average of three phones each. Data from Searchina Co., Ltd. shows that in Shanghai, cell phones are now replaced on average every two to three years. For some "fashionistas," keeping a phone for less than 12 months is not uncommon.

This cycle of consumption is generating astronomical amounts of electronic garbage. According to statistics from the State Environmental Protection Administration of China, every year the nation throws away a staggering 30 million cell phones. Added to these are 4 million refrigerators, and 5 million each of TV sets, washing machines and PCs. China's daily electronic waste output adds up to some 3,000 tons. In addition to this domestic garbage, vast amounts of overseas electronic waste is being dumped illegally in China, most of it officially imported as "secondhand goods."

Where's the waste going?

In 2006, Greenpeace's Beijing Toxins Office launched an investigation into where the capital's electronic waste was going. As Xu Feng's story indicates, the investigation found most of the city's discarded electronic products are purchased by moble scrap collectors. The street dealers convey these items to areas on Beijing's periphery such as Houbajia in Haidian District, or Dongxiaokou in Changping District. Here the goods are sorted, and those in working order, or only needing minor repairs, are fixed and cleaned to be resold as second-hand goods. The remainder are sent to a distribution center near Shibalidian Township, Chaoyang District, or transported directly to Guangdong Province in the south, where they are manually disassembled in family workshops.

A few months ago, Greenpeace volunteer Lai Yun conducted a survey in Guiyu Town in Shantou, Guangdong Province, China's largest electronic waste disassembly area. Eighty percent of the town's 150,000 inhabitants are engaged in the business of dismantling electrical junk. The 52-square-kilometer town not only disposes of domestic electronic garbage, but also imports waste from abroad. Wu Yuping, chief scientist of the State Environmental Protection Administration of China, explains, "To send electronic waste to China, American merchants need to pay Chinese businessmen, but it's well worth their while. If it costs RMB 300 to dispose of a certain amount of waste in the U.S., it will only cost them RMB 100 to illegally export it to China." According to the Greenpeace report, about 70 percent of the world's 40 million tons of electronic waste is sent to China each year, most of it passing through Guiyu.

Lai Yun's report continues, "Most of the electronic garbage disposal industry in Guiyu comprises family workshops, which generally lack the necessary equipment and technology, to say nothing of the funds, required to control the pollution created in disassembling electronic goods. To save costs, the family workshops usually disassemble the garbage in the fastest and most direct way possible, causing severe pollution to the surrounding soil and groundwater."

Computers, cell phones and TV sets contain a cornucopia of toxic substances, including cadmium, mercury and lead, all of which have extremely negative impacts on human health. When electronic goods are disassembled manually in small workshops that have virtually no protective measures in place, both workers and the surrounding environment are poisoned. But so long as mobile scrap collectors are willing to pay for electronic waste, there is little incentive for Chinese consumers to hand their old electronic products to larger recylcers capable of disposing of these items in a safer manner.

The economics of the recycling industry

Presently there are no regulations governing E-waste recycling in China, so Chinese manufacturers face a pressing cost issue in trying to make their operations more environmentally friendly. Safe recycling of electronic waste is expensive, so if enterprises were to introduce such practices it would undoubtedly push up costs, which in turn would curtail the price advantage Chinese manufacturers enjoy over most of their overseas competitors. And few individual consumers in China are wealthy enough to willingly foot the bill for safely recycling old household electric appliances.

Despite this, after Lenovo and Dell announced free recycling computer collection services in December 2006, HP initiated a similar scheme in September 2007. Yue Yihua, director of Greenpeace's BeijingToxins Office, lauds these developments; "Safe recycling is a key link in the product's overall lifecycle, and is important in avoiding secondary pollution." But the fact is when faced with the choice of handing their used goods to manufacturers with no compensation, or selling them to scrap collectors, the vast majority of Chinese consumers chose the latter. For this reason critics have labeled the recycling services offered by the computer companies nothing more than fancy tricks.

"Dell does not pay private users for their old computers, even when the products have secondary value," said Mr. Ding from Dell's recycling department. "Consequently, we receive few items from private consumers." There is some financial incentive for companies to hand over their old computers, but only if they recycle 30 or more machines at one time. If the quantity is less, companies are required to pay Dell to collect old computers.

The problem with the economics of E-waste recycling in China is graphically illustrated by the situation of various trial recycling projects designated by the National Development and Reform Commission. Test operations have been set up in Beijing, Tianjin, Qingdao and Hangzhou. Huaxing Environmental Protection Development Co., Ltd. is the experimental unit for Beijing, but unlike their counterparts in Guiyu, they face the ironic situation of not being able to obtain enough waste. According to company executive Wang Yong, although Huaxing has signed recycling agreements with electric appliance supermarkets like Suning and Gome, the company has to purchase most of its material from scrap collectors.

As Wang Yong explains, "There is no legal basis to the E-waste recycling industry," so most goods end up in the hands of street mobile scrap collectors, who can afford to buy the goods because they are ultimately recycled in the cheapest way possible. If environmentally sound operations like Huaxing have to pay for their recycling materials, their businesses simply aren't viable. Huaxing has an annual capacity of treating 1.2 million pieces, but currently only has one production line in operation dismantling TV sets and computers. The company's situation is far from unique; Nanjing Jinze Company also has no way of supporting itself due to a dearth of scrap appliances.

Regulations: a crucial step

While safe recycling operations are not currently viable in China, it is hoped the government will follow the example of other countries and introduce financial subsidies for recyclers, and begin policing the unofficial recycling industry.  Regulations for the Administration of Recycle and Disposal of Waste Household Electric Appliances and Electronic Products was drafted in 2004 to solicit public opinions, but so far it has not been made a decree.

Without legislation that brings some financial advantage to both consumers and legitimate recycling operations, it seems unlikely that the companies like Huaxing will ever be able to compete with bicycle-bound mobile scrap collectors. But if the industry is regulated to help put safe recycling operations on a sound financial footing, the potential rewards for these enterprises are enormous. "The road is long and tortuous, but future prospects are bright," says Wang Yong with a wry smile. Only by benefiting larger recycling enterprises will safer recycling practices replace the outdated mobile scrap collectors and family workshops.

(China Today January 8, 2008)