Manufacturing News

Recycling industry in China slumps in 2015

Despite China’s attempt to promote more responsible and sustainable environmental policies, the county’s massive but largely informal recycling industry still fell 20.1 percent year on year from 2014 to 2015, shrinking to just over 514.9 billion RMB.

Due to unfavorable economic conditions and limited government oversight, China’s recycling industry is suffering a large-scale recession. Many recycling-related enterprises are running at great losses, while some mid-sized and small companies have already shut down, according to Economic Information Daily.

There were only 130,000 enterprises related to recycling left operating in China in 2015, 7,000 fewer than in 2014. Over 3 million workers in the recycling industry were let go in 2015, and 50,000 recycling stations were shut down, according to statistics from the Ministry of Commerce.

Some experts believe that a lack of industry standards is a main reason for the recession. Most of the people who earn a living from recycling in China are migrant workers and disabled people, many of who are relatively uneducated. At the same time, enterprises’ crude management and excessive reliance on government policies have reduced their market competitiveness.

“Chinese recycling enterprises are facing problems such as low risk resistance and recycling capacity. Once changes occur in policies, prices or the market, those enterprises will be at risk,” said Peng Xushu, a research fellow at the Chinese Academy of Social Sciences.

The uneven development of the recycling industry and a lack of innovation are also factors in its recession. Currently, most recycling centers in China are located in central areas of cities, while suburban areas and villages have limited access to recycling facilities. What's more, few enterprises are willing to invest in research and innovation, leaving the industry sluggish.

Though development of the recycling industry has slumped, experts believe that its future is still promising. Chinese authorities have launched a series of policies to promote green and low-carbon development, offering recycling enterprises tax deductions and guidance. According to China’s Medium and Long-term Development Plan for Renewable Resources Recycling Systems (2015-2020), the recycling rate of goods will pass 75 percent in large and mid-sized cities by the end of the plan period.

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