According to the recently issued The Annual Report (2014) of the Integrated Use of China's Resources by the State Development and Reform Commission, in 2013, the output value of the integrated use of China's resources reached RMB 1.3 trillion Yuan. Through integrated use of resources, at least 140,000 mu of storage area has been reduced.

Waste resources now sought-after

Yuguang Gold and Lead, one of the first circular economy pilot organizations of the national "waste metal recycling field", has by now established 2 waste lead-acid battery regional disposal centers, disposing lead-acid battery 540,000 tons annually, and recycling 300,000 tons of lead, 2.4 tons of polypropylene, and 48,000 tons of sulphuric acid.

"If waste lead-acid battery is thrown away, it would not only waste resource but also greatly damage and pollute the environment", said Li Xinzhan, vice general manager of Yuguang Gold and Lead. According to Li, Yuguang Gold and Lead, using the lead recycling model developed by the company, can extract about 1 ton of lead from 1.8 tons of waste battery, and the energy consumption is only about one third of that of lead and zinc smelting, literally turning waste into treasure.

The Annual Report (2014) of the Integrated Use of China's Resources shows that in 2013 the output value of the integrated use of China's resources reached RMB 1.3 trillion Yuan, the recovery rate of nonferrous metal milling in some mines was as high as 80 percent and above, the volume of integrated use of industrial solid waste was 2.059 billion tons, and the output of main recycled metals accounted for 26.6 percent of total output of 10 nonferrous metals in the year. 140,000 mu of storage area has been reduced due to the integrated use of resources.

"As the volume of the industry of the integrated use of resources keeps expanding, the vehicle for the integrated use of resources has also been growing, and public awareness of the integrated use of resources has also improved significantly", said Cheng Yutao, an analyst of the Strategic Emerging Industries Research Center of CCID Consulting.

According to Cheng Yutao, since 2010, the State Development and Reform Commission and the Ministry of Finance have established 5 groups of "urban minerals" demonstration bases; the endeavor has cultivated a number of outstanding parks and key enterprises, provided a development vehicle for companies in this field, and promoted the sound and rapid development of the resources recycling industry, turning a great amount of conventionally wasted resources into attractive materials sought after by companies.

Recycling system still a burden

In the integrated use of waste resources, the establishment of recycling system is a subject that can't be avoided. In 2013, the volume of recycled main renewable resources, including waste steel, waste nonferrous metals, and waste plastic, amounted to 160 million tons, with a recycled value of RMB 481.7 billion Yuan, more than 100,000 recycling companies, and more than 18 million employees.

"Recycling is the key in the integrated use of waste resources". Cheng Yutao said that on the practical level, the construction of recycling system is now the weakest link in the industrial chain of China's integrated use of resources.

Li Xinzhan said that there had been many long-term problems in China's waste lead-acid battery recycling industry, including excessive amount of small companies, unregulated operation, tax evasion, high recycling cost, and serious environmental damage, resulting in the long-term raw material shortage of legitimate lead recycling companies.

In fact, not only Yuguang Gold and Lead has the problem of short supply in its waste lead-acid battery recycling, recycling problems in other fields are also causes for concerns. A person from a company in Shandong province whose main business is to extract biodiesel from waste oil said that although the company's 100,000-tons production line had been completed, the company's production capability is not being used now because the recycling channel of waste oil is not clear and production material can't be supplied as scheduled.

Longben (Qingdao) Retread Technology is a company capable of producing 100,000 pieces of retreads annually. Gu Jinshan, a leading official of the company, said that in China recycling tires is very difficult and used tires are serious worn; the technology index of many tires don't meet the conditions for retreading, so the company had to spend a lot of many on importing used tires from other countries.

"As a large resource-consuming nation, China has rich waste resources; the problem of the supply shortage of waste resource recycling companies is a rather clear indication that there is big flaw in the construction of China's waste resource recycling system", said Cheng Yutao.

Joint efforts required from government and market

According to the Circular Economy Development Strategy and Short-term Action Plan issued by the State Council, by the end of the 12th Five-year Plan, the yield of China's main resources will increase by 15 percent and the output value of the resource recycling industry will reach RMB 1.8 trillion Yuan. In order to achieve this goal, China will accelerate the development of the circular economy and achieve the high-efficiency use and recycled use of resources. This will provide opportunities for the development and growth of the industry of the integrated use of resources.

"Judging from the current conditions, China still faces many difficulties in accelerating the development of the industry of the integrated use of resources and improving the development standard of the circular economy". According to Cheng Yutao's analysis, at present China's resource utilization technology is rather backwards, resulting in the low level of integrated use of China's resources and the low added value of products; therefore, the profit is low, and companies are not able to carry out extensive technology R&D, thus resulting in a vicious circle.

Meanwhile, the producers of large amount of industrial waste are generally not the entities that make integrated use of resources. This would result in the disparity of interest of the two sides, restricting the maximization of the benefits of the integrated use of resources. Besides, in the resource recycling industry, recycling companies don't have expenditure proof, and this would lead to high VAT rate, creating heavy burden for companies and limiting the development of legitimate companies.

Experts point out that China needs the joint effort of the government and market in order to expand the market of the integrated use of resources. Cheng Yutao suggests that the government should give full play to the guidance effect of policy, formulate and refine policy system that are conducive to the development of circular economy, direct social capital to the field of circular economy industries, study tax policy that can promote the integrated use of resources, give greater tax support for companies that develop circular economy, include products of integrated use of resources into the government's purchase catalogue, and help relevant companies to grow bigger and more competitive.