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China's Recycling Market on the Brink of Collapse

May 19, 2009

The global economic crisis can be felt everywhere. Bankers in the US and the UK are hit, textile workers in Bangladesh or carmakers in Japan. But the most affected are those already on the bottom rungs of society. For example, China’s rubbish collectors and sorters. The Chinese recycling industry is on the brink of collapse. The market for recyclable waste paper, metal, glass and plastic has plunged with the export market.

A garbage collector in Gansu province, China
A garbage collector in Gansu province, ChinaImage: picture-alliance / dpa

The 43-year-old Li Li has been sitting in front of her bag of bottle tops for hours, removing the plastic from the metal. Her yard in Dongxiaokou, on the northern edge of Beijing, smells of waste. Roughly 700 people from Henan live and work here -- surrounded by mountains of plastic bottles, scrap electronic equipment and waste paper.

"People who were born in Beijing don’t want to do this work," says Li Li. "Just some unemployed people who have no other alternatives perhaps. But we outsiders are used to tough conditions. The work is filthy and painstaking."

Li Li and her three children practically live on the rubbish. Their tiny house is filled to the brim with piles of plastic bottles. For years, they were able to earn a decent living from collecting and selling recyclable waste. Factories in southern China needed plastic, paper and metal. But now the world is buying fewer textiles, plastic toys and electronics from China. The prices have gone down by half or more.

Plunging demand

Just a stone’s throw from the Lis, people are sorting through huge mountains of plastic bottles, weighing them and shredding them in simple machines. People are filling bags with plastic chips and piling them up. Before, they would have been sold on immediately and made into synthetic fibres for fleece jackets for example. But not anymore, says 35-year-old Zhang who is surrounded by a sea of bottles and is pulling off their labels:

"These synthetic fibres used to be exported but foreigners don’t want them any more. The domestic demand is covered. The warehouses are full. This raw material isn’t worth anything any more."

China made a fortune recycling. The head of Nine Dragons Paper, a southern Chinese paper firm, became the richest woman in China by importing waste paper from the US. But shares have fallen by 90 percent since the beginning of the crisis.

Facing debt problems

Even though in Dongxiaokou the figures are much lower, many people also lost out from mis-speculation. In Ying Zuozhang’s yard, a guard dog is pulling impatiently at his chain. The 63-year-old Ying stands before several mountains of waste paper and cardboard. He bought it all a year ago when the times were still good. He was banking on rising prices. Now he can't get rid of the card.

Ying Zhuozhang would rather close shop but he can’t because of his debts. However, Li Li is seriously thinking of giving up:

"I want to sell everything and give up now. We can rent a flat somewhere, find work and earn a couple hundred yuan a month. After the financial crisis, we’ll find a new place for our business but right now we’re just making losses."

However, like many other rubbish entrepreneurs, Li Li hasn’t yet found anyone to take over her business. Nobody wants anything to do with the once lucrative rubbish mountains of Dongxiaokou.

Author: Ruth Kirchner / Anne Thomas
Editor: Thomas Bärthlein