Manufacturing has been a driver for a number of sectors over last decades in China. And this industry has been making efforts to transform the value chain from low-value products to products and brands boasting greater value-added and global recognition. This requires plans to shift manufacturing from labor-intensity to industrial systems featuring automation and high efficiency, which can realize higher resource productivity. This was made official in 2015 by China’s State Council, under the framework of Made in China 2025 Initiative.
This vision plays a great role in electronics sector. China is world’s leading producer of electronics. The country produces about 70 percent of the world’s mobile phones and many of the biggest companies in electronics industry have their products manufactured in China. Contract companies including Pegatron and Foxconn have developed into huge employers. China also presents a host of world’s leaders in this sector, such as Lenovo, Huawei, and new players Oppo and Xiaomi are also brands of world fame in the PC and mobile markets.
China is the world’s biggest consumption market of electronics, where roughly 82 percent of its population mobile users. This sector has been playing an important role in driving GDP growth.
However, the increasingly growing production and consumption of electronic devices burden the environment and human health with electronic and electrical wastes (e-waste), which can contain hazardous substance, especially when there are no formal systems for the proper disposal and recycling of used devices. There are cases that discarded electronics end up piling e-waste dumps and untrained people dismantle them to get a trace amount of valuable materials such as gold, tin and cobalt. The concern here is, the casual dismantling by untrained people can pose a danger to people’s health and surrounding environment, as poisonous materials can release during the dismantling. These process are also unproductive in terms of recycling.
As early as 2012, during China’s 18th National Congress of the Communist Party, the government proposed an ecological civilization. President Xi Jinping reiterated on occasions that an ecological civilization is of “fundamental importance for the sustainable development of the Chinese nation”, citing issues of air pollution and waste management.
Electronic wastes do have economic value. For example, the amount of gold in a tonne of smartphones can be as high as 70 times the amount in a tonne of gold ore. The United States put the annual worth of waste at about $63.18 billion in 2016. But recovery rate of main materials in China and globally is unsatisfactorily low. A recent study report released by the World Economic Forum and Tsinghua University shows that now in China, recycling rates of four key metals and metal groups ranges from 10.7 percent and 6.1 percent for aluminum and tin to 0.6 percent for cobalt and 0 percent for rare earths. And on a global level, the rate is about 13 percent.
China has made the move on this front. The State Council has established the Producer Responsibility Extension System Implementation Program (“PRE Program”), which has ambitious targets including increasing the recycling rate of all e-waste to no less than 50 percent by 2025, and working towards a circular economy in electronics sector.
China’s leading academic institutions, such as Tsinghua University, have been studying the issue and have joined hands with the World Economic Forum to identify opportunities and roll out solutions to deal with issues in the whole life cycle of electronic devices, from collecting and recycling used equipment to incorporating industrial scarps into new devices. These ambitions are echoed by both domestic companies, such as Huawei and Lenovo, and global players including Phillips and Apple. Greater innovation and cooperation will be what’s needed to make waste into worth.