January/February 2012
When local officials suddenly shut down northern China’s largest concentration of scrap plastic processors, the effect rippled down to Beijing’s peddlers. Was the move a much-needed environmental reckoning, or something much more mundane?
By Adam Minter
On July 15, 2011, the price of plastics suddenly crashed in Beijing. Over the course of several days, some grades fell more than 50 percent in value. There was no advance warning, nor were there any market indications that something was amiss, but it didn’t take the city’s many scrap plastic traders to figure out what had happened: North China’s largest concentration of plastic scrap recyclers had been shut down en masse by the once-supportive local government of the county where they operate. Why? Nobody could say.
What a shift! A day earlier, Wen’an, a 400-square-mile county roughly 100 miles east of Beijing, was home to 10,000 to 20,000 plastic scrap processors as well as some of China’s largest wholesale markets for domestic and imported plastic scrap. I visited Wen’an in 2009 with Josh Goldstein, an associate professor of history at the University of Southern California (Los Angeles), who has long studied the waste and recycling trade in north China. There are no official estimates of the volumes Wen’an’s recyclers were processing, but in 2009 Goldstein and I had no problem locating businesses that shipped as much as 200 mt of processed plastics a day. The industry was huge.
In China, such volumes can come at a terrible price, however. Wen’an was and is one of China’s largest and most polluted recycling zones, now totally unsuitable for the agriculture that once defined the area. In the nearly 10 years I’ve been covering China’s scrap recycling trade, it’s the most contaminated processing zone I’ve visited—much worse, even, than Guiyu, the notorious electronics recycling zone in Guangdong that has been the subject of countless media reports. Yet for all of the volume processed there, and the devastation it created, Wen’an was almost entirely unknown outside of the industry—which is how the local government and industry leaders preferred it.
When, in the November/December 2009 issue, Scrap published my account of the visit Goldstein and I made to Wen’an, I used pseudonyms for the people we met as well as for Wen’an itself—calling it Guibei—out of concern for the people who took risks to facilitate our visit. Months after our visit and the article’s publication, Chinese journalists, including many from state-owned organizations, followed with their own investigations, making it possible for us to now reveal the county’s true name.
In the two years since publication, Goldstein and I have kept in touch via e-mail, sharing information on Wen’an and other mutual interests. The July shutdown struck us both as strange: Contamination was nothing new to the region, and, in Chinese terms, it was rather thin justification to shut down an industry that employed, according to conservative estimates, hundreds of thousands of people. Still, reports filtered in that the local water used for irrigation was so contaminated last summer that vast stretches of farmland were simply killed off. Perhaps someone in Beijing was concerned that the destruction of so much good farmland would set off unrest. That would make sense: According to one rumor, the county’s new Communist Party secretary was keen to impress Beijing, and the shutdown was his means of doing it. Whatever the cause, I vowed to get to the bottom of it on my next visit to Beijing, in September.
The View From Beijing
By 9 a.m., Beijing’s scrap peddlers are always busy, piling the backs of their tricycles with the scraps of the capital city’s consumers: liquor boxes, bits of wire, plastic take-out containers, broken plastic buckets. The pickings are particularly good in a wealthy residential compound that houses Chinese military officers, where the city has deployed a new recycling program, complete with containers. Peddlers are anxious to get their hands on this value-rich, pre-sorted material, I’m told.
One of them, a laborer from Sichuan province, is pedaling through the compound with a few detergent bottles on the back of his bike when Chen Liwen reaches out for him. A young researcher at the Green Beagle (Beijing), an environmental nongovernmental organization that focuses on waste and recycling issues, Chen is my guide for the day, in part because she’s trying to understand the market dynamics of Beijing’s scrap peddler trade. “How is the market for your plastics?” she demands of the peddler. “Has the price fallen?” The peddler—a migrant without legal status in Beijing whom I’ll call Mr. Li—glances at Chen, then me, nervously. “The price has fallen by half,” he says.
We later find Mr. Li in the shipping container that serves as both his home and the warehouse for the recyclables that he sorts. He waves his cigarette at a pile of broken plastic buckets. It’s the kind of low-grade material that Wen’an’s scrap processors specialized in turning into raw materials for north China’s manufacturers. “Before they shut down Wen’an, I’d get 2 yuan (about 13 cents) per kilogram for that,” he tells us. “Now I get RMB 1.2 (about 7 cents) per kilogram.” He points at other grades piled neatly in his trailer, all devalued since July. It’s not easy work: Even in good times, Mr. Li only makes RMB 2,000 to 3,000 (US$312 to $469) a month. But he’s not entirely pessimistic. A carpet factory is buying PET in the Beijing area, and, more encouraging from his standpoint, there are rumors that Wen’an’s factories and workshops are relocating to Baoding, a nearby city.
That news comes as no surprise to Josh Goldstein in Los Angeles. “No serious effort was ever made to work with the thousands of small-scale, mom-and-pop processors [in Wen’an] to solve [environmental and safety] problems,” he wrote to me in an e-mail. His message expressed considerable regret that the local government didn’t try to improve scrap plastic recycling in Wen’an rather than shut it down, and he expressed further dismay at the rumors we were hearing in Beijing, that the city’s plastic “is already being rerouted to Baoding, where pollution regulation is horribly lax.” Chen just shakes her head in anger when we discuss the shutdown of the industry in Wen’an and its subsequent relocation to Baoding. “So then we will have two areas as polluted as Wen’an, not just one. It makes no sense.”
Real Reform, or Real Estate?
From Mr. Li’s home and workshop, we take a taxi to one of Beijing’s dozens of recycling markets. This one, the Yujinlai Branch of the Beijing Gucheng Recycling Co., is a privately leased set of warehouses and stalls that rent for as little as RMB 300 (US$47) a month. We walk into one of the warehouses, where we find stalls filled with enormous, tied-together bundles of detergent, soap, and shampoo bottles of the kind that used to supply Wen’an’s processors. Workers and stall owners labor together, sorting the material into as many as 20 different commodity grades. But that sorting isn’t nearly as profitable as it once was, according to a migrant trader and stall owner I’ll call Mr. Hu (to protect his quasi-legal status in Beijing). Pointing at a pile of shampoo bottles, he tells us that before officials shut down Wen’an’s scrap processing industry, he could get RMB 3.8 to 4 (59 to 62 cents) a kilogram for the grade. “Now we only get RMB 3 (46 cents) by sending it to Baoding.”
Unlike other participants in this market, Mr. Hu seems optimistic. In part, it turns out, this is because he’s from Wen’an, and he’s heard rumors that Wen’an’s scrap processors will eventually re-open. “The industry is too big,” he assures us. “We don’t want to see it move to Baoding.” For the time being, he says, the residents of Wen’an are either moving into other industries, relocating to Baoding to restart their plastics businesses, or “playing mahjong.”
In the end, the problem is uncertainty. Among Beijing’s scrap traders and the NGO community, there’s widespread belief that environmental concerns were merely the excuse, but not the real reason, for the shutdown. Had the local government been truly concerned with environmental protection, it would have found the money and will to upgrade Wen’an’s processors rather than turn the county into an empty, barren wasteland.
“As is often the case in China today, decisions about local development boil down to cashing in on crony real-estate deals,” Goldstein writes from Los Angeles. The real estate to which he refers is an empty eco-recycling park on the edge of Wen’an that could never before compete with the existing market. The strong arm that shut down Wen’an’s plastics trade is now pushing what remains of it into this development. “From now on, plastics processors will only be allowed in the county if they locate their plants in this park,” Goldstein writes, “which only a handful of local enterprises will be able to afford.” Those who can’t will seek out cheaper, less-regulated options such as Baoding.
Either way, scrap plastic processing will resume. “There is a shortage of recycled plastics in China,” Mr. Hu tells us, “so no matter what the government does in Wen’an, there will be demand for this material.”
Adam Minter is a journalist based in Shanghai, where he writes about business and culture for U.S. and international publications and maintains a blog, www.shanghaiscrap.com.
When local officials suddenly shut down northern China’s largest concentration of scrap plastic processors, the effect rippled down to Beijing’s peddlers. Was the move a much-needed environmental reckoning, or something much more mundane?