[SCMP Column] What a Load of Rubbish

August 19, 2017

I have talked often in the past about China’s “deflationary gift” to the world economy over the past three decades. But there is a second huge and undiscussed “gift” – China’s “environmental gift”, or more specifically China’s “waste disposal gift”.

There has been wide recognition of China’s remarkable rapid economic emergence since 1980 which has radically altered the balance of the global economy – a balance over the past two centuries that has involved a necessarily poor majority of the world’s population producing and selling foods and raw materials cheaply to about 500m people Europe and North America.

There has at the same time been recognition that as China became the “manufacturer to the world”, it not only destroyed thousands of low-paid, low-value-adding jobs in the US and Europe (much to the alarm of Donald Trump and his supporters in the US), but reduced inflationary pressures in the consuming west, enabling retailers year after year to offer “stuff” more cheaply, and enabling western workers to stretch the spending power of their wage packets further than otherwise possible.

Of course, from 2001 when Beijing began to lift minimum wages to give Chinese workers more spending power and to create China’s own middle class consumer economy, this era of China’s “deflationary gift” has begun to unravel.

Few have yet begun to estimate the impact of the reversal as western retailers have found it increasingly difficult to keep consumer prices down. Nor have they begun to calculate the additional pressure on consumers following the 2008 global economic crash, since when real wages in the high-consuming west have flatlined. There can be no doubt that these factors have contributed mightily to what Pankaj Mishra calls “The Age of Anger” – the ugly and increasingly xenophobic populist politics that are tainting democratic politics across the affluent west.

But Beijing has just reminded us of a second “gift” invisibly provided to the consuming west over recent decades, which it now seems determined to withdraw: I call it China’s “environmental gift”.

It was on July 18 that China wrote to the World Trade Organisation to say that by the end of this year, it would no longer allow the import of a wide range of waste – including plastics, waste paper and waste textile materials and other forms of solid waste.

The decision comes right from the top, and is part of an increasingly anxious range of measures aimed to preventing China from disappearing under mountains of its own – and imported – waste. We know in 2013 when Beijing unveiled “Operation Green Fence” that it was getting serious in tackling the environmental harm being inflicted on China’s people, but until now measures have been patchy. It seems while progress on improved management of locally-generated waste remains slow, the intended new and total ban on imported waste is intended to send a strong political message both at home and abroad.

Every year since the late 1990s, China has imported increasing volumes of the west’s waste, enabling our hyper-consumers in the US and Europe to “export” the environmental consequences of their excess. The numbers for this invisible industry have become huge. Between 1995 and 2016 China’s imports of waste have jumped from 4.5m tonnes to over 45m tonnes.

At the same time, China has in its own right become the world’s leading producer of trash. The World Bank says it is 2015 produced 254 million tonnes of garbage – one third of the world’s trash – and that if unchecked this will rise by 2030 to 533m tonnes. So China’s core problems are at home, managing its own domestically created trash, but Beijing has decided that offering itself as the world’s main importer of trash is making matters unacceptably worse.

For waste paper, China accounts for 52 per cent of world exports, most of it from the US or Europe. The business has made many people very rich. Zhang Yin, known inside China as the country’s “waste queen” is said to be one of China’s richest private sector entrepreneurs. Her company Nine Dragons is valued over HK$57.12 bn (US$7.3bn). According to the Economist magazine, California-based Chung Nam last year exported 333,900 containers of waste – most of them to China – and making waste paper the US’s biggest export by volume.

For the immensely more damaging trade in plastic waste the story is similar. China in 2016 imported about 7.3m tonnes of waste plastic, costing US$3.7bn and accounting for around 56 per cent of world imports.

While the physical volumes are smaller, China has also built a global reputation as the world’s main destination for high-tech waste, supplying large volumes of recyclable metals like copper and vanadium. Towns like Guiyu in Guangdong have become world famous, “boasting” 100,000 scavengers eeking a living from sorting electronic waste in appallingly insanitary environments.

Of all this trade, none seems more dangerous and unsustainable than the trade in plastics, simply because of the formidable challenges being created by such huge production of materials that are going to take 400 years or more to degrade. From 2m tonnes created in 1950, the world is expected to produce 8.3bn tonnes this year – with just 9 per cent recycled, 12 per cent incinerated and 79 per cent dumped into landfills.

The habit of big-consumption, big waste economies like the US playing “pass the parcel” with the problem, simply filling containers and letting Chinese scavengers deal with the plastic as best they can, has allowed many governments to duck an increasingly grave environmental challenge. Without China to export to, few governments are in any way prepared to cope with our waste sustainably at home.

China’s July 18 letter to the WTO may change all that – and not least in Hong Kong, where our waste management challenge is running rapidly out of control. Not only are our three remaining landfills all close to bursting, but local efforts to control our production of waste are woefully inadequate, as Ian Brownlee at Masterplan Ltd wrote so vividly here in the SCMP on Wednesday.

It seems China’s terse July 18 letter to the WTO, in terminating its “waste disposal gift” to the globe, is set to concentrate minds worldwide on environmental problems that for decades we have been able to kick down the road. I suspect most economies – including our own – are set to become a great deal messier before appropriate (and radical) measures are taken.
David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view. Opinions expressed are entirely his own. 
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