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1. Waste Management In China

BEIJING, April 28 (Xinhua) -- Experts say China's waste management industry is heading toward prosperity, as relevant annual output value growth rate in the coming two to three years might hit 30 percent.

"In the coming two to three years, the waste management sector will encounter a booming period as the government continues to make efforts to strengthen waste management," said Hou Yuxuan, a researcher with an affiliated Web site of the China Investment Corporation.

The State Council, China's Cabinet, recently approved proposals by 16 ministries on strengthening the work of urban domestic garbage management companies.

A report from China Solid Waste Net shows that by 2015, China's annual urban refuse output will reach 184 million tonnes, of which 82 percent will go through treatment to make it less environmentally harmful.

Xiao Qiong, a researcher with the China Solid Waste Net, said, "China's investment in refuse treatment facilities will reach 170 billion yuan by the end of 2015, at least double the amount invested from 2005 to 2010."

The expanding construction of refuse treatment facilities will help promote the marketization of the industry and attract more investment from companies both at home and abroad, said Hou.

China's waste management approach will gradually switch from putting refuse in landfills to incinerating it, in order to reduce environmental impact. By the end of 2015, incinerated waste will account for 35 percent of China's total managed waste, said Xiao.

Currently, waste in China is processed via landfills, incinerators and composting facilities. Landfill currently accounts for 85 percent of refuse, while incineration accounts for 17 percent.

Many cities in China, including Dalian and Xiamen, are constructing large incinerators. Beijing plans to build nine large-scale incinerators by the end of 2015.

The country's first refuse incinerating plant which is able to handle 2,000 tonnes of refuse each day went into service in February this year in the city of Wuxi in east China's Jiangsu Province.

Waste recovery is also a focus of the proposals brought by the 16 ministries. Recycling rates in urban areas are required to hit 30 percent, and some municipalities and provincial capitals are being asked to bring that number to 50 percent.

China's recycling industry has been expanding rapidly. Statistics show that in 2009, China recycled 140 million tonnes of refuse. This recycling resulted in 500 billion yuan in value.

Experts say that new policies, technologies and information are the three factors that affect the development of China's recycling industry.

It is estimated that China loses as much as 30 billion yuan as the result of poor waste management each year. However, if new waste management procedures and techniques are put into place, it is believed that the country can reap economic benefits of at least 250 billion yuan annually.

One Mans Trash: Chinas Growing Waste Problem

No nation has witnessed a growth in waste at the rate that China has seen in the past two decades. Industrialisation and an urban population explosion have propelled China to overtake the USA in waste generation in 2004. Urban areas alone generate 1.5 billion tons annually or 1kg per capita daily.

Chinas Waste Management systems have failed to develop to manage the increasing amounts of waste. The domestic industry does not have the necessary infrastructures or expertise in efficient collection, treatment, disposal of waste nor designing and operating facilities.

A highly underdeveloped sector with good potential, Waste Management presents problems for China, but opportunities for foreign firms. Currently, only 70% of Municipal Solid Waste (MSW) generated is collected and only 60% is treated before disposal. Domestic firms in the industry underperform due to inadequate financial capacity and technical expertise, with informal private players dominating certain sectors. The growth of the industry has also been stagnated by the lack of incentive for private investment.

The government has invested around 9.5 billion USD in waste management in the past 5 years. But further investment, improvements to infrastructure and expertise are still needed to improve current daily operations management, systems design and technological resource use. At present, the majority of firms operating in the industry are small to medium Enterprises (SMEs) that lack the technical or financial capacity needed to develop and improve the industry.

Waste management in urban areas consists of a primary and secondary phase. Waste is collected from households and taken to local collection areas during the primary phase and transported to treatment and disposal areas during the secondary phase. The second stage is the responsibility of the government, but it is the primary stage that has greater areas for improvement.

The primary phase remains a largely informal market due to the non-existence of a managed recycling or waste separation system for households. Therefore sorting and transporting recyclables is carried out by small private informal collectors such as street foragers. As a result, many recyclables not picked up will end up in landfills. The recycling industry needs to be consolidated and developed whilst utilising the labour of these informal private collectors.

Chinas landfills are poorly managed with enhanced planning and enhanced system design needed. The industry is characterised by substandard practices and knowledge, substandard daily operations and is in need of an overhaul in planning, acquisition of more physical capital and improved technical knowledge. Chinas landfills are also rapidly filling to capacity, so this method of waste management will quickly become unsustainable without improvement.

Another Mans Treasure: Opportunities for foreign companies

Given the issues and need for improvement, experienced foreign firms in the industry may find opportunities to expand into China. Foreign enterprises should look to win contracts to provide waste handling, disposal and treatment technologies, operational design and management in different sectors of the industry. International firms may be able to outsource their services and equipment through build-own-operate systems. Systems to generate energy using organic waste, which makes up 60% of MSW, could also be introduced with foreign expertise.

The recycling sector could prove particularly fruitful for foreign investors. According to a recent BCC market research report, Chinas recycling industry will process 244.8 million tons of material in 2013, growing at a compounded rate of 9.1% per annum from 142.3 million metric tons in 2008. Chinas generates aggregate recycled matter at a rate of increase of 12%. In major first-tier cities, paper and plastic waste now compose of around a fifth of total waste. Domestic enterprises are virtually non-existent in the industry, creating a huge potential market for foreign enterprises.
Foreign waste management firms eyeing further growth should look to china. Investment, enterprise and expertise are in high demand among all facets of waste collection operations. As China will only continue to generate waste at an astounding rate, there is great long term potential for the industry. Chinas trash may indeed be a foreign businessmans treasure.

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