Developing the Circular Economy in China

China consumes the most resources in the world and produces the most waste, but it also has the most advanced solutions in creating a “circular economy”. If left unchecked, such levels of consumption and waste wwould strain the nation and the planet.

For the past decade, China has led the world in promoting the re-circulation of waste materials through setting targets and adopting policies, financial measures and legislation. The ultimate goal of closing industrial loops to turn outputs from one manufacturer into inputs for another. This approach reduces the consumption of virgin materials and the generation of waste.

Taxation, fiscal pricing, and industrial policies were introduced. A fund was allocated to support the conversion of industrial parks into eco-industrial agglomerations. Tax breaks were provided to enterprises in the reuse sector. Western countries have struggled for decades to get companies to collaborate along a supply chain. China has the advantage that more than half of its manufacturing activities are conducted in industrial parks and export processing zones. Targeting these parks is beginning to slash the intensity of China’s resource use.

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