a case study on worldwide waste paper and weee flows between europe and china projecten... ·...

Develop a Case Study on Worldwide Waste Paper and WEEE Flows between Europe

and China

Beijing Jiaotong University

Ru Yihong

November 2007

Preface

“Develop a Case Study on Worldwide Waste Paper and WEEE Flows between

Europe and China” commissioned by RMS Erasmus University, started in April 2007

and completed on schedule. Our research team was composed of staff from value

added logistics institute, Beijing Jiaotong University. We mainly studied WEEE flows

in China.

Our research team visited Beijing Municipal Administration Commission, Beijing

Chaoyang District Bureau of Commerce, Beijing Chaoyang District Office of Recycle

Management, The Haier Group, The Gome Group, Beijing Zhongxing second-hand

market, Beijing Dong Du Zhongxing renewable resources Limited. This research was

supported and assisted by them.

The team is led by Professor Ru Yihong and the research is divided as follows:

� Teacher: Wang Yacan, Lan Hongjie, Lin Zikui;

� Doctoral student: Fan Wenji, Zheng Kai, Zhu Yu, Wang Ruijiang;

� Master student: Yu Min, Dong Yu; Zhu Hongyi,Sun Minghui.

This report is revised by Wang Yacan. Many thanks for all the participation and

assistance during this research.

Content

3. WEEE CLOSED-LOOP SUPPLY CHAIN IN CHINA........................................ 1

3.1 WEEE CLASSIFICATION AND CLOSED-LOOP SUPPLY CHAIN ................................................... 1

3.1.1 WEEE Classification ........................................................................................................ 1

3.1.2 Closed-loop Supply Chain Process Mapping ................................................................... 3

3.2 LITERATURE REVIEW ............................................................................................................... 5

3.3 STATISTICAL ANALYSIS ............................................................................................................ 6

3.3.1 Total Scale ........................................................................................................................ 6

3.3.2 Using and Scrapping ........................................................................................................ 8

3.3.3 Collecting ....................................................................................................................... 11

3.3.4 Treating .......................................................................................................................... 14

3.3.5 Disposing ....................................................................................................................... 17

3.3.6 Key Points ...................................................................................................................... 18

3.4 THE ROLE OF SECOND-HAND MARKET .................................................................................. 21

3.4.1 Brief Introduction ........................................................................................................... 21

3.4.2 Positive Role .................................................................................................................. 21

3.4.3 Negative Role ................................................................................................................. 22

3.5 LAWS AND REGULATIONS ...................................................................................................... 24

3.5.1 General Regulations ...................................................................................................... 24

3.5.2 Specialized Regulations ................................................................................................. 25

3.6 CASE STUDIES ....................................................................................................................... 31

3.6.1 Haier .............................................................................................................................. 31

3.6.2 Gome .............................................................................................................................. 36

3.6.3 Zhongxing....................................................................................................................... 39

3.7 COUNTERMEASURES AND SUGGESTIONS ............................................................................... 42

3.7.1 Making relative laws and policies .................................................................................. 42

3.7.2 Building up the recycle system suitable for the China ................................................... 42

3.7.3 Standardizing the second-hand WEEE market ............................................................... 43

3.7.4 Strengthening Recycling Collaboration between Government and Enterprise .............. 44

REFERENCE ............................................................................................................. 45

APPENDIX ................................................................................................................. 48

APPENDIX1: QUESTIONNAIRE ON THE WEEE OF BEIJING ........................................................... 48

APPENDIX2: QUESTIONNAIRE ON SECOND-HAND MARKET OF WEEE IN BEIJING ....................... 51

1

3. WEEE Closed-Loop Supply Chain in China

3.1 WEEE Classification and Closed-loop Supply

Chain

3.1.1 WEEE Classification

Waste Electrical and Electronic Equipment (WEEE for short) means such used

equipment with decreased values. Usually the consumers do not use the equipment

again. According to EU WEEE directive, Electrical and Electronic Equipment

generally includes 10 types such as large and small household appliances, small

household appliances, IT and telecommunications equipment, consumer equipment,

lighting equipment, electrical and electronic tools (with the exception of large-scale

stationary industrial tools), toys, leisure and sports equipment, medical devices (with

the exception of implanted and infected products), monitoring and control instruments,

automatic dispensers (see Table 3-1). Therefore, WEEE refers to the equipment that

consumers abandon and disuse in the 10 types.

In China, Electrical and Electronic Equipment refers to the equipment which

runs by electrical current and electromagnetic field and also the equipment which

produces, transforms and measures the electrical current and electromagnetic field.

And the designed working voltage not exceeds 1000 volt of alternation current or

1500 volt of direct current. The classification of Electrical and Electronic Equipment

is similar to EU WEEE. The specific products of WEEE include large and small

household appliances, small household appliances, IT and telecommunications

equipment, electrical and electronic tools (with the exception of large-scale stationary

industrial tools), toys, leisure and sports equipment, medical devices (with the

exception of implanted and infected products), monitoring and control instruments,

automatic dispensers (see Table 3-1).

It is shown from the Table 3-1 that the WEEE classifications in China are similar

to that in EU, except for the “consumer equipment” and “lighting equipment”. In

China, the “consumer equipment” is incorporate to “large and small household

appliances”, and “lighting equipment” is incorporate to “small household appliances”.

2

Table 3-1 WEEE Classifications in China and EU China EU

Classification Items Classification Items large and small household appliances

Refrigerator, washing

machine, microwave

oven, air conditioner

large and small household appliances

Refrigerator, washing

machine, microwave

oven, air conditioner

small household appliances

Cleaner, electric

shaver，Electric light

small household appliances

Cleaner, electric

shaver

consumer equipment

Radio, TV set, camera,

sounder

lighting equipment Electric light

IT and telecommunications equipment

Computer, printer,

electrograph,

duplicating machine,

telephone， Radio, TV

set, camera, sounder

IT and telecommunications equipment

Computer, printer,

electrograph,

duplicating machine,

telephone

electrical and electronic tools (with the exception of large-scale stationary industrial tools)

Drill, electric saw electrical and electronic tools (with the exception of large-scale stationary industrial tools)

Drill, electric saw

toys, leisure and sports equipment

electronic toys, fitness

apparatus

toys, leisure and sports equipment

electronic toys, fitness

apparatus

medical devices (with the exception of implanted and infected products)

Radiation treatment

equipment, heart

disease therapy

apparatus, perspective

equipment

medical devices (with the exception of implanted and infected products)

Radiation treatment

equipment, heart

disease therapy

apparatus, perspective

equipment

monitoring and control instruments

Smog detector,

thermostat

monitoring and control instruments

Smog detector,

thermostat

automatic dispensers (beverages)

Vending machine automatic dispensers (beverages)

Vending machine

As a part of WEEE, household appliances are closely related to people’s daily

life. With the development of science and technology, replacement period becomes

shorter and shorter, and the waste of household appliances increases year by year. In

this report, we choose such 5 important household appliances like refrigerator, air

conditioner, washing machine, color TV set and computer as the research objective,

and also call them WEEE.

3

3.1.2 Closed-loop Supply Chain Process Mapping

In China, the closed-loop supply chain for electrical and electronic equipment is

made up of forward supply chain and reverse supply chain (see Figure 3-1). First of

all, it includes the traditional forward supply chain management such as “supply”,

“produce”, “sale” and “consume” etc. Based on it, it also includes the reverse supply

chain that is opposite to the forward one.

Figure 3-1 General Mapping of WEEE Closed-loop Supply Chain

The reverse supply chain consists of the following parts:

(1) Collect: to obtain the used products from the end users, that is, collect WEEE.

Because of different location of the end users, the collection of WEEE is one of the

main problems that affect the closed-loop supply chain.

(2) Test and sort: to test, sort and evaluate the collected WEEE and decide their

next step. This activity is decisive in the movement of WEEE, because only after the

quality test and sort with the pre-decided standard, can we decide the next step of

WEEE and the site to recycle them.

(3) Disassemble: after testing and sorting, WEEE is disassembled. Useful spare

parts are moved to “produce”, useless component are moved to “refine” and the

remainders are moved to “dispose”.

(4) Refine: to obtain useful component from needless spare parts, then send them

to “supply” as the raw materials. The remainders are moved to “dispose”.

4

(5) Dispose: to obtain the remainders from “test and sort”, “disassemble” and

“refine”, then conduct final disposal.

Our next research is based on the different parts of the WEEE reverse supply

chain.

5

3.2 Literature Review

In recent years, the research on WEEE has been paid more and more attention in

China. These researches mainly concentrate on two parts:

� Analysis on the current situation of WEEE in China � Analysis on the reverse logistics of WEEE in China

(1) Analysis on the current situation of WEEE in China

Luo Zhihua (2006) concluded that WEEE was now experiencing high growth in

China on the basis of the prediction of WEEE volume; and through presenting and

analyzing the current treatment technology of WEEE in China. He also concluded that

the existing WEEE treatment plants are not able to cope with the high growth

problems of electronic waste. Song Xu (2007) made a general analysis on the

estimation model of WEEE in Henan Province; and the outputs of 6 species of WEEE

in Henan province are calculated. Pan Hongmei (2007) analyzed the impact of

dismantling WEEE on surrounding soil environment.

(2) Analysis on the reverse logistics of WEEE in China

Reverse logistics originated from some developed countries in early 1990s, and

the study of reverse logistics in China started in recent 10 years. Zhou Chuiri (2004)

put forward a mixed integer linear programming to optimize the infrastructure design

and the reverse network flow for WEEE. Wei Jie (2004) put forward a circular

economy model and a reverse logistics model for WEEE. Xu Jian (2006) explained

several main factors that enterprise must consider when it chooses reverse logistics

model，and proposed a decision way while choosing the reverse logistics model at last.

Sun Yunli (2007) focused on the discarded printed circuit boards (PCB), and brought

forward the suggestions to refine metals from discarded PCB.

Presently, the research on WEEE in China is concentrating on the analysis of

current situations, countermeasures and reverse logistics network model construction,

the majority of which keeps on the introduction stage. As is known, the process of

constructing a reverse logistics network model is very complicated because there are

too many uncertain factors that affecting the model. Current studies are more likely to

focus on a specific part of the reverse supply chain, rather than on the whole process.

6

3.3 Statistical Analysis

3.3.1 Total Scale

(1) Volumes

China has become one of the world’s largest entities producing and consuming

household appliances. In 2005, China produced 8238 color TV sets, 2987 refrigerators,

3035 washing machines, 6764 air conditioners and 12670 computers. (Data source:

China Statistical Yearbook-2006).

Entering into families since the early 1980s, the household appliances now have

reached a very high possessing volume. According to the statistical yearbook of

plastic industry, the possessing volume of TV sets has reached 580 million,

refrigerator 230 million, washing machine 260 million, air conditioner 210 million,

computer 150 million by the end of 2005.

In view of international standards of household appliances using life, Chinese

household appliances have reached the scrapping peak since 2003. Every year over 53

million household appliances would be scrapped, including 27 million TV sets, 5.8

million refrigerators, 12 million washing machines, 5.5 million air conditioners and

2.6 million computers. Besides, a great number of mobile phones, duplicating

machines, electrographs and printers have been replaced every year. Because of

lacking normal recycling system of WEEE in China at present, most of WEEE

couldn’t be recycled effectively, causing great waste of resources and serious risk of

environmental.

Although the volume of WEEE is much smaller than that of municipal solid

waste (MSW), the growth rate of WEEE is much faster than that of MSW. According

to China Statistical Yearbook from 2000 to 2006, the average growth rate of MSW is

5.4% per year, while of WEEE is 14.3%, the percentage shows the growth rate of

WEEE is 2.65 times as much as MSW. (see Table 3-2).

7

Table 3-2 Volumes and growth rate of MSW and WEEE

Volumes of MSW

(10000 tons) Growth rate

Theoretical volume

of WEEE

(10000 unit)

Growth rate

1999 11415.19 ／ 2633.87 ／

2000 11818.88 3.54% 2730.72 3.68%

2001 13470.40 13.97% 3087.54 13.07%

2002 13650.00 1.33% 3364.92 8.98%

2003 14856.50 8.84% 4214.36 25.24%

2004 15509.30 4.39% 5160.17 22.44%

2005 15576.80 0.44% 5811.14 12.62%

Data source: China Statistical Yearbook-2006

(2) Output and growth rate

Table 3-3 is about the output and growth rate of 5 household appliances from

1999 to 2005 in China, and it suggests that the output of any household appliances is

very huge. On the whole, the output increases year by year with average growth rate

of 23.5% per year. These household appliances will become WEEE after their end of

life.

Table 3-3 Output and Growth Rate of Main Household Appliances (10000 unit)

Year Refrigerator Air Conditioner

Washing Machine Color TV Set Computer Total Growth Rate

1999 1210.0 1337.6 1342.2 4262.0 405.0 8556.8 ／ 2000 1279.0 1826.7 1443.0 3936.0 672.0 9156.7 7.0% 2001 1351.3 2333.6 1341.6 4093.7 877.7 9997.9 9.2% 2002 1598.9 3135.1 1595.8 5155.0 1463.5 12948.3 29.5% 2003 2242.6 4820.9 1964.5 6541.4 3216.7 18786.0 45.1% 2004 3007.6 6390.3 2533.4 7431.8 5974.9 25338.1 34.9% 2005 2987.1 6764.6 3035.5 8283.2 8084.9 29155.3 15.1%

Data source: China Statistical Yearbook-2006

The growth rate curve of total volume for the 5 household appliances can be

plotted based on table 3-3. As is shown in figure 3-2, the growth rate reaches the

maximum in 2003, and then slows down, but still above 10%.

8

Figure 3-2 Growth Rate of Main Household Appliances

3.3.2 Using and Scrapping

The household appliances in consumers will become WEEE after their life. In

China, the volume of household appliances in consumers is called “possessing

volume”, which means the future volume of WEEE. We will analyze the consuming

part in the general mapping of WEEE closed-loop supply chain (see the following

figure).

9

(1) Possessing Volume

Table 3-4 shows the possessing volume of the 5 main household appliances from

1999 to 2005. From Table 3-4, the possessing volume of color TV set is the highest,

followed by washing machine, refrigerator, air conditioner and computer, while the

possessing volume of computer is the lowest.

Table 3-4 Possessing Volume of Main Household Appliances (10000 unit)


Washing Machine

Color TV Set

Computer Total Growth Rate

1999 12061 3167 16977 28953 1982 63140 ／

2000 13271 4505 18320 33215 2387 71698 13.6%

2001 14550 6331 19763 37151 3059 80854 12.8%

2002 15901 8665 21104 41245 3936 90851 12.4%

2003 17500 11800 22700 46400 5400 103800 14.3%

2004 19800 14600 24200 51000 9100 118700 14.4%

2005 22808 20990 26733 58432 15075 144038 21.3%

Data Source：China Plastics Industry Statistics Yearbook 2006

Figure 3-2 shows the total possessing volume of the 5 main household appliances

from 1999 to 2005.

0

20000

40000

60000

80000

100000

120000

140000

160000

1999 2000 2001 2002 2003 2004 2005

Figure 3-2 Total Possessing Volumes of Main Household Appliances

From Figure 3-2, total possessing volume of 5 main household appliances is 144

million by the end of 2005. The average growth rate from 1999 to 2005 is 14.8%.

(2) Theoretical Forecast Volume of WEEE

The theoretical forecast volume of WEEE can be deducted by the output and life

span of 5 main household appliances. For example, the life span of washing machine

is about 7 years; so the theoretical forecast volume of waste washing machine from

10

2006 to 2012 can be deduced by the output of washing machine from 1999 to 2005.

According to the average situation in the world and situation in China, the life

span of the household appliances is: 12 years for refrigerator, 10 years for air

conditioner, 7 years for washing machine, 7 years for color TV set and 7 years for

computer. The total scrapping volume of the 5 main household appliances can be got

from Table 3-5.

Table3-5 Theoretical Forecast Volume of WEEE (10000 unit)


Washing Machine

Color TV Set Computer Total Growth

Rate 2001 670.8 63.0 1094.2 1435.8 24.6 3288.4 ／

2002 463.1 158.0 948.4 1689.2 83.6 3342.2 1.6%

2003 469.9 346.4 1074.7 2057.7 138.8 4087.6 22.3%

2004 485.8 393.4 1254.5 2537.6 206.6 4877.8 19.3%

2005 596.7 682.6 1207.3 2711.3 291.4 5489.3 12.5%

2006 768.1 786.2 1342.2 3497.0 405.0 6798.5 23.9%

2007 918.5 974.0 1443.0 4262.0 672.0 8269.5 21.6%

2008 979.7 1156.9 1341.6 3936.0 877.7 8291.8 0.3%

2009 1044.4 1337.6 1595.8 4093.7 1463.5 9535.0 15.0%

2010 1060.0 1826.7 1964.5 5155.0 3216.7 13222.8 38.7%

2011 1210.0 2333.6 2533.4 6541.4 5974.9 18593.4 40.6%

2012 1279.0 3135.1 3035.5 7431.8 8084.9 22966.4 23.5%

Table 3-5 shows that the theoretical forecast volume of WEEE has been

increasing year by year from 2001 to 2012, with 2012 being the year of the most,

which is 230 million. The average growth rate from 2001 to 2012 is 19.9%. The

highest growth rate will occur in 2011, up to 40.6%.

0 5000 10000 15000 20000 25000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Refrigerator Air Conditioner Washing Machine Color TV Set Computer

Figure 3-4 Theoretical Forecast Scrapping Volume of Main Household Appliances

11

From Figure 3-4, the growth rate of computer is the highest, which is 76.3%,

followed by 48.1% for air conditioner, 16.7% for color TV set, 10.5% for washing

machine, and 7.2% the lowest growth rate for refrigerator.

3.3.3 Collecting

In this sector, we will analyze the collecting part in the general mapping of

WEEE closed-loop supply chain (see the following figure).

Supply Produce Sale Consume

CollectTest &

Sort

Disassem

bleRefine

Dispose

Forward Supply Chain Reverse Supply Chain

Spare PartsRaw Materials Repaired products

There are mainly four channels for the collecting of WEEE in China, as is shown

in Figure 3-5. Through the channels of “individual vendors”, “second-hand market”

and “professional recycling companies”, customers sold out their needless household

appliances. Through the channels of “present to friends”, customers present their

needless household appliances to their relatives and friends.

12

Figure 3-5 WEEE Recycling Channel

From Figure 3-5, we can see the proportion of recycling in each channel.

(1) The individual vendor (55%)

Individual vendors are still the main parts of collecting, and WEEE is collected

in spontaneous state, resulting in low collecting efficiency. Much WEEE is assembled

by the individual vendors themselves, and then sold to the remote rural regions.

(2) Second-hand market (15.3%)

There are plenty of second-hand markets in China. Most of them is small scale

and nonstandard. The proportion of WEEE sold directly to the second-hand markets is

not so much, while the individual vendors also sold the WEEE to the second-hand

markets.

(3) Professional recycling company (8.2%)

There are two forms of professional recycling companies in China.

� State-owned recycling company

The state-owned recycling companies are the earliest department to collect

WEEE and have played an important role for a long time in China. While in recent

years, the state-owned recycling companies faced more and more intense competition

with individual vendors.

� Professional WEEE disposal center

In recent two years, some professional WEEE disposal centers have been set up

in order to recycle and dispose WEEE safely and scientifically. These centers are

characterized by high-tech and high recycling ratio. However, owing to the high

operational cost, these centers are difficult in making profit.

(4) Present to relative and friend (21.5%).

13

Table 3-6 comparing the main body dealing with WEEE in China System

Index

Individual vendor WEEE Disposal Center System

Second-hand market

Operating Time Moderately long Short Short WEEE Recovery Start Point

Late 1980s or Early 1990s 2000s 1990s

Operational mode

Family Workshop Professional Scaled Operation

Family Workshop

Annual Capacity 1.5 million tons 50 thousand tons 70 thousand tons Recovery Source Plenty:

Overseas and domestic Extremely Short: Self Acquisition, Producer Commission and Cooperative Recycling

Moderately Plenty: Self Acquisition

Acquisition Cost Low High Moderate Employment Long-term and short-term

Short-term as a majority Public recruitment Formal employees and

Public recruitment Workforce Cost Migrant workers as a

majority A low wage of 1000 (including overtime) without welfare or insurance

High wage, overtime, welfare and insurance

Fixed formal staff as a majority, overtime, welfare and insurance

Tax No tax; Only “Administration fees” to the government

Normal Tax incentives

Disassembling Mode

By hand By machine By hand

Disassembling Rate

High Moderately High High

Industry Type Labor-intensive Capital-intensive In-between Recovery Rate Very Low Moderately High Moderately Low Pollution Heavy Little Moderately Low Profitability High Loss Balance Profit Source Sale of the second-hand

electronic products made from the recycled parts

Sale of the recycled materials, precious metals, deep processing products and byproducts

Sale of the recycled materials, mainly steel, cotton, paper and plastics

Currently China has not yet established formal WEEE recycling and treatment

system, which causes most majority of WEEE, cannot be effectively recycled and

safely treated. China's WEEE recycling has several characters:

(1) The main purpose of recycling is to resell scrapped. Therefore, most products

come into the consumption market again after simple processing.

(2) The collected products will be sold again as merchandise through the

second-hand markets. The second-hand markets will dispose them. First of all, it will

do wholesale. The main buyers are the floating population of the city (such as migrant

population), various business markets, and some bulk purchase, including some

14

parents who are willing to buy a more economical second-hand computer for the early

intelligence development of their children, and the buyers in rural areas where there is

also a huge demand of second-hand electrical and electronic products. Secondly, after

recycling, markets will do some simple maintenance to commercialize the products to

make a sale. Finally, the rest of a few electronic products will be scrapped and be

disposed in a specialized treatment.

(3) The recycle system of WEEE is not standard, imperfect and with primitive

techniques. Because there is neither a standard for WEEE recycle system nor a

specialized department responsible for this recycling, the management of WEEE is

still a vacancy. The electronic waste disposal center only takes a small proportion of

the whole amount of disposal. Driven by economic interests, individual vendors

recycle the wastes, which will be maintained and reassembled to resell or be

disassembled to sell as reproducible materials. Not only are there potential safety

problems but also it has interfered the normal market order and damaged the interests

of the consumers.

(4) WEEE recycling system lacks policy support. Currently, there are no

regulations concerning WEEE discarding, recovery and treatment. And all activities in

the market are spontaneous. The lack of WEEE regulation causes big market risks so

that very few companies are willing to enter the market. It is expected that the WEEE

recycling draft law will be enacted and issued this year, which can help to establish

and standardize the recycling channels.

3.3.4 Treating

In this sector, we will analyze the treating part (including “test and sort”,

“disassemble” and “refine”) in the general mapping of WEEE closed-loop supply

chain (see the following figure).

15

In China, 55% of WEEE are collected by the small dealers. In terms of the old

electronic appliances disposal, small dealers only wash, repair or assemble the old

appliances and then sell them to the second-hand market. After testing and sorting,

they generally clean, repair, assemble and sell the old applications to the second-hand

market or rural consumers. If the collected waste electronic appliances are 100%,

74.5% of them will be refurbished or repaired and then sold to the second-hand

market for the second selling; 15.9% of them will be disassembled and sorted into

groups first, and then the vendors use the components to assemble the old electronic

appliances; 9.6% of them will be land filled (see Figure 3-6).

16

Figure 3-6 the flows of WEEE after sorted

For the components that is disassembled from the waste electronic appliances,

about 40% of the reusable components will be used for repair or assembling new

electronic appliances which will be sold for the second time in second-hand market

(Figure 3-7); about 5% of the waste components which can not be used any more will

be land filled; other 55% will be recycled by the recycling centers through the testing

and sorting. After the recycling (Figure 3-8), about 80% of the circuit boards and

copper wires of the waste electronic appliances will be transported to other places and

then will be abstracted for heavy metals. The rest materials, such as glass, plastic and

metal, which can not be used will be sold if possible. Except the materials that can be

recycled directly, other materials can be also used as the raw material of construction

and insulated material. About 20%, including amount of harmful material will be

thrown away as trash which will be buried as the common trash.

17

disassembly

Shredding

splitting

Recycle center landfillrepair

remanufacturing

Second-hand market

55% 5%

40%

Figure 3-7 the flow of WEEE after disassembled

Figure 3-8 the flows of WEEE had been sent to the waste product station

3.3.5 Disposing

In this sector, we will analyze the “dispose” part in the general mapping of

WEEE closed-loop supply chain (see the following figure).

In terms of the landfill of WEEE, after testing, sorting, disassembling and being

delivered to recycling center, some WEEE are land filled.

18

3.3.6 Key Points

In conclusion, if we assume that the quantity of new electronic appliances is

100% and all of the electronic appliances can be only recycled once, 66.4% of them

will enter into the second-hand market and finally will be sold to consumers; 21.5%

of them were presented by their owners to the relatives and will be used longer; 4.4%

of them will be abstracted for the heavy metal and plastics to turn to raw material;

7.7% will be land filled (Figure 3-9).

In terms of the landfill of WEEE, after testing and sorting there are 6.1% of

WEEE land filled; after disassembling, there are 0.5% of WEEE land filled; after

being delivered to recycling center, there are 1.1% land filled.

19

Figure 3-9 Detailed Mapping of WEEE Closed-loop Supply Chain in China

From the analysis above, the key control points of WEEE closed-loop supply

chain are:

(1) Individual vendors: major force of collecting WEEE. The percentage of

WEEE collected by the individual vendors is the highest of all, and the individual

vendors` collection is the main force of China’s WEEE recycling. So, the individual

vendors are one of the key control points of WEEE recycling system.

(2) Second-hand market: major circulation place of WEEE.66.4% of WEEE

enter into the second-hand market, including the ones directly sold to the second-hand

market by the consumers and the ones that are collected by the individual vendors

first and then sold to the second-hand market. Most of them come back to the

consumption market again. So, we can see that the second-hand markets in China play

an indispensable role in WEEE recycling since they make most of WEEE reused.

20

Figure 3-10 the key points of China WEEE closed-loop supply chain

21

3.4 The Role of Second-hand Market

3.4.1 Brief Introduction

Second-hand markets are special businesses in China. They cover almost every

city in the country. There are 40-50 second-hand markets in Beijing, and about 15 of

them deals WEEE. Unfortunately, only a small proportion of them are operating

formally with license. Second-hand markets are mainly engaged in the repair and

disassembly of WEEE. In formal second-hand market, the land and infrastructures are

owned by the government and rented by dealers of second-hand goods. These dealers

are small-sized and facing competitions from other dealers. After buying the

appliances from individual vendors, dealers fix them or change some parts if they can

be reusable, and then sell out to customers in remote areas. Or the appliances are sold

to agent companies. For those cannot be reused, they are disassembled and used as

parts of other appliances. The prices of second-hand products are determined by their

quality and age, but also influenced by the bargaining. There are no official prices set

by the government. There is a market supervisor (like administration office) related to

government.

Presently, the main sources of second-hand markets are:

� Individual consumers. Commodities from individual consumers are often out

of date but in good shape, which can meet some specific customers’ needs.

� Local businesses. Goods of this source differ greatly in quality and are often

sold in large discount because of big scale.

� Smuggling goods from foreign countries. They are sold at very low price

because of the illegal sources.

3.4.2 Positive Role

(1) The second-hand market makes the recycling of old products possible.

Second-hand markets can exist because of the following reasons: first of all, the

second-hand products are very cheap. For example, the second-hand computers are

one third or half the price of the totally new products of the same type. Besides,

there is still much room for bargaining in the second-hand markets. Secondly, the

qualification of entering second-hand markets is very low. The individual dealers can

get the operation license only if they apply from the Business Administration Bureau.

22

(2) The second-hand market can effectively ease the environmental pollution

caused by WEEE.

As majority of household appliances in China will come to the end of lifecycle,

China enters the summit period of scrapping household appliances. There are an

estimated 2,000,000 household appliances like TV sets, computer and air conditioning

coming to the scrapping deadline, which causes the whole market scale of

second-hand household appliances to exceed more than ten billions RMB. The

second-hand market postpones the scrapping and increases the recycling of WEEE,

thus ease the environmental pollution caused by WEEE.

(3) The second-hand markets can solve employment problems.

In 1998, there are 82 thousands people in rural come to Beijing for collecting

waste goods, including WEEE. In the formal second-hand markets, there are about 30

thousands formal employments. This can create the employment of 100 posts. It is

very important to solve the problem of unemployment and re-employment. And it can

promote society effectiveness.

3.4.3 Negative Role

(1) The second-hand market is not standardized in operation and supervision.

Most of the markets are automatically formed. These markets had the low

efficiency and resource waste in WEEE recycling, risk for environmental pollution,

leading to pollution environments again. Chinese government has established some

WEEE recovering centers as pilot projects in some places. Unfortunately, the

recovery rate of these centers could not reach 2% so far. The reasons are: firstly, 70%

of citizens are more willing to sell WEEE to individual vendors because they

normally offer higher price and come to people’s house to deliver WEEE. Most of the

WEEE collected by individual vendors is sold to second-hand markets. Secondly, the

formal recycling companies suffer from economic loss caused by high operation

costs.

(2) There are too many second-hand markets, but the scale is too small, the

technology level is low.

40-50 second-hand markets are scattered around in Beijing, small in scale and

chaotic in management and most of them are too small in scale and are hard to

improve management level due to low technology standard. In the formal

second-hand markets, the area does not make much sense because the rent is very

cheap (600-1000 RMB per month). The size depends on how much products they sell

23

and at what price. For example, if vendor communicates with the agent (the agent sell

the product to the villages), normally in large quantities, it has a bigger size. The

second-hand markets are characterized in heavy labor load and original disassembling

techniques. Treating equipment is usually by hand. The technology level is low.

(3) The quality of employment in the second-hand markets is poor.

It’s common that the second-hand markets have the poor working conditions and

the indiscrimination of employment of different levels (for example, no certificates

are required to take a position). The individual dealers are very poor in treatment

technology and knowledge. They do the sorting and testing, disassembling, repairing

and refining all by themselves. Currently the fact that the individual dealers in the

second-hand markets are generally of low quality has constrained the development of

the second-hand markets. Health of employees in the second-hand markets is not

adequately guaranteed. Majority of current workers are not able to realize the real

danger of dealing with WEEE. Usually, they disassemble the wastes without

necessary tools. Consequently, they create many hidden troubles of their health and

their family’s.

24

3.5 Laws and Regulations

A series of laws and regulations have been formulated to strength the

management of WEEE in China. These laws and regulations can be divided into

general regulations and specialized regulations according to their scope. The general

regulations cover the whole WEEE closed-loop supply chain; while the specialized

regulations cover only one or several parts of the WEEE closed-loop supply chain.

3.5.1 General Regulations

(1) Law on Prevention and Control of Environmental Pollution by Solid

Wastes (http://www.lawinfochina.com/law/display.asp?db=1&id=3874)

This Law was adopted on October 1995, amended on December 2004, and came

into force on April 2005. There are some contents that are related to the management

of WEEE.

� “It is forbidden to dump, pile up or treat any solid waste from abroad within the territory of China.” (Article 24)

� “The State forbids the import of solid wastes that cannot be used as raw material and those that can’t be utilized through harmless treatment, and restricts the import of the solid wastes that can be used as raw materials and implements the classification management of automatic licensing import thereto”. “The imported solid wastes shall comply with state environmental protection standards and be inspected to be qualified by the quality supervision, inspection and quarantine department.” (Article 25)

� “When dismantling, utilizing or disposing abandoned electronic appliances and motor vehicles and vessels, measures shall be taken to prevent environmental pollution according to relevant laws and regulations.” (Article 37)

� “Entities engaged in the collection, storage and treatment of hazardous wastes shall apply to the environmental protection administrative department of the people's government at or above the county level for business licenses. Entities engaged in businesses of utilizing hazardous wastes shall apply to the environmental protection administrative department of the State Council or the environmental protection administrative department of the people's government of a province, autonomous region and municipality directly under the Central Government for business licenses.” (Article 57)

� “It is forbidden to transfer hazardous wastes overseas via the territory of the People's Republic of China.” (Article 66)

(2) Law on Appraising of Environment Impacts

(http://www.lawinfochina.com/law/display.asp?db=1&id=2496)

25

This Law was adopted on October 2002, and came into force on September 2003.

The law stipulates, “to build any project within the territory of the People’s Republic

of China… appraisals shall be conducted about the environmental impacts”, and also

stipulates the procedure of the Appraisal of the Environmental Impacts in China.

3.5.2 Specialized Regulations

This report summarizes the main specialized laws and regulations related to the

WEEE closed-loop supply chain in China, as is shown in Table 3-7.

(1) Law on Cleaner Production Promotion

This Law was adopted on June 2002, and came into force on January 2003.

There are some contents that are related to the management of WEEE.

� “Within the territory of the People's Republic of China, any units or individuals engaged in activities relating to production or provision of services and their corresponding management agencies must organize and implement systems for cleaner production.” (Article 3)

� “New construction, construction renovation and expansion projects shall conduct environmental impact assessments with respect to analysis and assessment of use of raw materials, resource consumption, comprehensive utilization of resources, as well as generation of pollutants and their treatment; shall accord priority to adopting cleaner production technologies, processes and equipment, which maximize the resource utilization rate and generate few pollutants.” (Article 18)

� “Any enterprise producing large-sized electromechanical equipment, motor-driven transport apparatuses… shall place the standard label listing material composition on a main structural component of the product in accordance with the technical specifications devised by the relevant administrative department responsible for such standardization under the State Council or its duly authorized organizations.” (Article 21)

26

Table 3-7 Corresponding laws and regulations of WEEE CLSC Process Name of Laws and Regulations Type Full Text

Produce Law on Cleaner Production Promotion National Law

http://vip.chinalawinfo.com/Newlaw2002/SLC/SLC.asp?Db=chl&Gid=40272

China RoHS National Regulation http://www.mii.gov.cn/art/2006/03/02/art_521_7344.html

Sale

1st sale China RoHS National Regulation http://www.mii.gov.cn/art/2006/03/02/art_521_7344.html

2nd sale

China RoHS National Regulation http://www.mii.gov.cn/art/2006/03/02/art_521_7344.html Quality Appraisal for Second-hand Goods — Part I. General Rules (SB/T 10398.1-2005)

Trade Standard http://www.feijiu.net/news/html/20065/24/000875.html

Quality Appraisal for Second-hand Goods — Part II. Appraising requirements for Household Appliances (SB/T 10398.2-2005)

Trade Standard http://www.tysflm.com/Html/Article/200611/2_3163.html

Collect

Administrative Measures on Collection of Renewable Resources National Regulation http://www.gov.cn/ziliao/flfg/2007-03/30/content_566242.htm

Administrative Measures of Hazardous Wastes Business License National Regulation http://www.legalinfo.gov.cn/zt/2004-12/28/content_173062.htm

Announcement about Strengthening Environmental Management of WEEE

National Regulation http://www.sepa.gov.cn/info/gw/huangfa/200308/t20030826_86626.htm

Technology Policy of WEEE Pollution Prevention National Regulation http://www.sepa.gov.cn/tech/hjbz/bzwb/wrfzjszc/200607/t20060720_91676.htm

Disposal Planning of Solid Waste in Beijing 11th 5-year Period Local Regulation http://www.beijing.gov.cn/zfzx/ghxx/sywgh/t705871.htm

Administrative Measures of Hazardous Wastes Pollution Prevention in Shanghai

Local Regulation http://www.envir.gov.cn/law/danwast.htm

Administrative Measures of Hazardous Wastes Transferring in Shenzhen

Local Regulation http://www.gf.sz.gov.cn/View.aspx?id=76&pid=34

Provisions of Solid Wastes on Prevention and Control of Environment in Guangzhou

Local Regulation http://huanbao.by.gov.cn/newsdetail.asp?id=279

Test and sort

Administrative Measures for the Prevention and Control of Environmental Pollution by WEEE

National Regulation http://www.lawinfochina.com/law/display.asp?db=1&id=6416


Administration of Hazardous Wastes Business License National http://www.legalinfo.gov.cn/zt/2004-12/28/content_173062.htm

Quality Appraisal for Second-hand Goods — Part I. General Rules (SB/T 10398.1-2005)

Trade Standard http://www.feijiu.net/news/html/20065/24/000875.html

Quality Appraisal for Second-hand Goods — Part II. Appraising requirements for Household Appliances (SB/T 10398.2-2005)

Trade Standard http://www.tysflm.com/Html/Article/200611/2_3163.html

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Disassemble




Administration of Hazardous Wastes Business License National Regulation http://www.legalinfo.gov.cn/zt/2004-12/28/content_173062.htm

Refine





Dispose

Basel Convention on Control of Trans-boundary Movements of Hazardous Wastes and Their Disposal

International Convention http://www.basel.int/



Technology Policy of Hazardous Wastes Pollution Prevention National Regulation http://www.sepa.gov.cn/tech/hjbz/bzwb/wrfzjszc/200607/t20060720_91676.htm



Disposal Planning of Solid Wasted in Beijing 11th 5-year Period Local Regulation http://www.beijing.gov.cn/zfzx/ghxx/sywgh/t705871.htm

Administrative Measures of Hazardous Wastes Pollution Prevention in Shanghai

Local Regulation http://www.envir.gov.cn/law/danwast.htm

Administrative Measures of Hazardous Wastes Transferring in Shenzhen

Local Regulation http://www.gf.sz.gov.cn/View.aspx?id=76&pid=34

Provisions of Solid Wastes on Prevention and Control of Environment in Guangzhou

Local Regulation http://www.law-lib.com/law/law_view.asp?id=36576

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(2) China RoHS

China RoHS is the short for “Administrative Measures on the Control of

Pollution Caused by Electronic Products”. This regulation is jointly issued by

Ministry of Information Industry of the People’s Republic of China, National

Development and Reform Commission, Ministry of Commerce of People’s Republic

of China, State Environmental Protection Administration of China, etc. and came into

force on March 2007.

This regulation covers the “produce” and “sale” process of electronic product,

which includes the contents as follows.

� Technical measures should be adapted in the design and production process to reduce or eliminate the toxic and harmful substances.

� The names and contents of toxic and harmful substances should be indicated during the design, production, import and sale process.

� The import of electronic products should be banned that do not comply with the related national standards or trade standards for the prevention and control of environmental pollution.

(3) Administrative Measures on Collection of Renewable Resources

This regulation is jointly issued by Ministry of Commerce of the People’s

Republic of China, National Development and Reform Commission, State

Environmental Protection Administration of China, etc. and came into force on May

2007.

This regulation covers the “collect” process of WEEE. The regulation stipulates,

“Within the territory of the People's Republic of China, any units or individuals

engaged in activities relating to collection of renewable resources must comply with

this regulation.”

(4) Administrative Measures for the Prevention and Control of Environmental

Pollution by WEEE

This regulation is issued by State Environmental Protection Administration of

China, and will come into force on February 2008.

This regulation covers the “disassemble”, “refine” and “dispose” process of

WEEE, which includes the contents as follows.

� New construction, construction renovation and expansion projects related to disassemble, refine and dispose WEEE, shall be conducted about the environmental impacts appraisals. (Article 5)

� The government carries out license system toward WEEE disassemble, refine and dispose enterprises. (Article 7, 13)

� To disassemble, refine and dispose WEEE, the requirements of environmental protection shall be complied with. (Article 11)

29

� Any enterprises that generate WEEE have to entrust the specific enterprises with business license to disassemble, refine and dispose WEEE. (Article 15)

(5) Technology Policy of WEEE Pollution Prevention

This regulation is jointly issued by Ministry of Commerce of the People’s

Republic of China, Ministry of Information Industry of the People’s Republic of

China, State Environmental Protection Administration of China, etc. and came into

force on April 2006.

This regulation stipulates the objective and principles on the “collect”, “test and

sort”, “disassemble”, “refine” and “dispose” process of WEEE in China.

(6) Basel Convention

The Basel Convention on the Control of Tranboundary Movements of

Hazardous Wastes and their Disposal is the most comprehensive global

environmental agreement on hazardous and other wastes. The Convention has 170

Parties (including China) and aims to protect human health and the environment

against the adverse effects resulting from the generation, management, transboundary

movements and disposal of hazardous and other wastes. The Basel Convention came

into force in 1992.

The Basel Convention stipulates, “Each Party shall take the appropriate

measures to:”

“(a) Ensure that the generation of hazardous wastes and other wastes within it is reduced to a minimum, taking into account social, technological and economic aspects;”

“(b) Ensure the availability of adequate disposal facilities, for the environmentally sound management of hazardous wastes and other wastes, that shall be located, to the extent possible, within it, whatever the place of their disposal;”

“(c) Ensure that persons involved in the management of hazardous wastes or other wastes within it take such steps as are necessary to prevent pollution due to hazardous wastes and other wastes arising from such management and, if such pollution occurs, to minimize the consequences thereof for human health and the environment;”

“(d) Ensure that the transboundary movement of hazardous wastes and other wastes is reduced to the minimum consistent with the environmentally sound and efficient management of such wastes, and is conducted in a manner which will protect human health and the environment against the adverse effects which may result from such movement;”

“(e) Not allow the export of hazardous wastes or other wastes to a State or group of States belonging to an economic and/or political integration organization that are Parties, particularly developing countries, which have prohibited by their legislation all imports, or if it has reason to believe that the wastes in question will not be managed in an environmentally sound manner, according to criteria to be decided on

30

by the Parties at their first meeting;” “(f) Require that information about a proposed transboundary movement of

hazardous wastes and other wastes be provided to the States concerned, according to Annex V A, to state clearly the effects of the proposed movement on human health and the environment;

“(g) Prevent the import of hazardous wastes and other wastes if it has reason to believe that the wastes in question will not be managed in an environmentally sound manner;”

“(h) Co-operate in activities with other Parties and interested organizations, directly and through the Secretariat, including the dissemination of information on the transboundary movement of hazardous wastes and other wastes, in order to improve the environmentally sound management of such wastes and to achieve the prevention of illegal traffic.”

Based on the Basel Convention, Chinese government state that 11 kinds of WEEE are forbidden to imported from April 1, 2000, including scrapped TV set, scrapped computer, scrapped duplicating machine, scrapped camera, scrapped telephone and so on.

Besides the laws and regulations above, several regulations are in formulation

now, including:

� Administrative Measures on Collection of WEEE � Administrative Measures on Import of Solid Waste

Based on the analysis of the laws and regulations related to WEEE in China,

some conclusions can be drawn:

� The fundamental framework of laws and regulations related to WEEE has

been set up in China, and the related regulations are in formulation step and

step.

� The import of WEEE is strictly forbidden according to the laws in China.

� There also exists vacancy of laws and regulations in the “sale”, “collect”,

“test and sort” process of the WEEE closed-loop supply chains.

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3.6 Case Studies

3.6.1 Haier

1. General Introduction

Haier Group is one of the forth-greatest manufacturers of household appliances

in the world, ranking 1st among China’s 100 electronic and informational enterprises.

Products of Haier are listed as followed: refrigerators, air conditionings, washing

machines, TV sets, water heaters, computers, mobile phones etc. which amounts to 16

major products.

Towards the resource and environment, Haier follows sustainable development

and carries it out in each business operation. She holds the comprehensive utilization

of resources and sticks to circular economy with the ultimate purpose of developing

resource-circulated enterprise. In 1996, Haier becomes the first refrigerator

manufacturer passing ISO, after which successively pass ISO9001, ISO14001,

ISO10015 and OSHMS18001; She takes the lead in passing and implementing WEE

E Authentication issued by EU.

2. Developing circular economy, achieving ecological management

On the basis of enforcing ISO14001, Haier develops circular economy, which is

propelling ecological design, ecological manufacturing, ecological consumption and

ecological recovery to achieve ecological management to set up a wholly

conservation-oriented enterprise. Haier has made excellent achievements in energy

saving, consumption reduction, dirty decreasing and effects increasing.

(1) Ecological Design

� Implementing ecological design to reply for trade barriers. Ecological design,

with the aim of penetrating ecological consciousness into designing and the

purpose to reduce the influence of lifecycles; prolong the service life of

products or components. Making LCA can enlarge products exportation, in

addition, it ensures performance of environmental protection achieve

international advanced level.

� Developing Freon-free replacement products to protect and improve

ecological environment. Haier refrigerators and air-conditionings take the

lead in realizing Freon-free replacement domestically; Haier becomes the

leading enterprise in domestic in order to protect ozonosphere and improve

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ecological environment.

� Developing energy-saving and material-saving products to save social

resource. In these years, Haier persists in developing energy-saving,

water-saving and environmental protection products, and then marks

significant achievement. Haier has passed the most energy-saving

authentication and specification.

(2) Ecological design

� Carrying out the ISO14001 Environment Management System Authentication.

Up to 2003, Haier has completed ISO9001, ISO14001, ISO10015 and the

OSHMSl8001 system authentication and its management system has

achieved the international advanced level.

� Carrying out clean production. Haier carries out the clean production in the

production process, on one hand, it optimizes techniques, substituting poisons

materials, on the other hand, it enhances the power-saving and

wastes-reducing ability in the production progress.

In order to strengthen the disposal of WEEE and limit six harmful home

appliances, European Union has promulgated WEEE and the RoHS to reduce the

environmental pollution. Haier replies actively, investing 4,000,000 Yuan to develop

substitution of lead-free welding, then increases the reuse and recycling rate of spare

parts.

(3) Ecological consumption

According to requirement of the Central Committee and the State Council, Haier

develops various propagandas, mentioning energy-saving consumption, ecological

consumption and promotion the concept of ecological consumption. In addition,

Haier also runs the users’ school, provides room services, trains clients and the

potential consumers, in order to lead them to buy the suitable products.

(4) Ecological recovery

On January 7, 2004, with the approval of State Council and confirmation of the

State Development and Planning Commission, Qingdao becomes the first state-level

experimental city of the disposal of WEEE, and the project was undertook by

Qingdao New World Ecological Cycle Technologies Inc, which is established by

Haier Group and Qingdao New World Investment Company. From the standpoint of

the whole country, Haier is the only domestic one which has participated in the

disposal of WEEE.

33

� Introduction

The comprehensive demonstration project, aiming to the recovery of the wastes

and resources application effectively, is invested 81,300,000 Yuan by Haier and

covering 100 acres in plan. The plan is divided into 3 stages: Firstly, dismantling

manually with the total amounts of 50,000 per year; secondly, crashing and separating

with the total amounts of 20,000 per year; thirdly, scalable dismantling to improve the

techniques of wastes and total amounts of 60,000 per year. After that time, the copper,

the aluminum, other various metalloids, the plastics, the precious metal mixture

achieved up to more than 8000 tons; the recycling spare parts up to 2000.

In March, 2006, Haier completed 5500 square meters to open the dismantling

workshop, independently designs the waste television, the refrigerator, the air

conditioning, the washing machine and so on. It symbolizes completion of the first

stage. The second stage (2-3 years) will process 200,000/year, the separation and

other essential equipment need to be imported overseas.

This project uses mature technology, with the modular structure and facilitates

for different types of WEEE to dispose and adjusts the production scale; through the

high-purity products and the best production cost to gain more profits. Through

disposal, 70% of the abandons in the refrigerator can be recycled, 60% of wasted can

be transferred to regenerative resources. After checked by the disposal enterprises, the

materials can be sold. Adopting the scalable industrialization production, it is not only

to increase the recycling rate, but also good for products’ sales and departments’

supervision.

According to the materials flow, the disposal is divided into collection and

transportation, disposal and handling, material sales and final calculation. Collection

and the transportation are the key links.

� Setting up the recycling system

In view of recycling difficulty, the New World Company established four

recycling channels. Aiming at the different characteristics of each recycling channel,

different recycling method is adopted.

Firstly is the community inhabitant. The investigation shows that the numbers of

the old home appliances reached to 429,500 by the inhabitants in Qingdao, accounting

for 81.9% of the total numbers, mostly are televisions and refrigerators. The majority

of the old appliances are purchased by vendors door to door, and the selling price is

generally between 50-300RMB. In addition, 17.4% left unused could not be recycled

fully. In view of the community inhabitants, the New World Company announces the

34

recycling service hot line; builds the network service platform and the recovery

network system of WEEE linking with Haier after-sale network. Sometimes, the

recovery comes from the incorporated recovery dealers. In 2006, total number of this

kind of recovery is 2635. Among them, 1467 are from the inhabitant directly, 1168

prefers incorporated recovery dealers.

Secondly is the home appliances seller. Su Ning and other 33 large malls sell

118526 sets of television, in which trading-in the new ones are 2855 (2.4%). This

potential activity is always made between the appliances manufacturers and the malls,

generally with the price between 60 and 200. In 2006, the malls recover the old

appliances 1893 sets through trading-in.

Thirdly is the home appliances manufacture. There are Haier, Hisense, Aucma

and other manufacturers in Qingdao, which may produce some old appliances when

they research, produce and distribute. The New World Company has reached an

agreement with Haier about the recovery of WEEE. In 2006, total amount of recovery

is up to 1400 sets from Haier.

Forth is the government departments, the enterprises and institutions. The New

World Company has made a survey of 16 government departments, the enterprises

and institutions. The survey data shows that the total number of the old appliances is

94,500, accounting for 18.1% totally. The majority is computer, television and air

conditioning, accounting for 87.2% totally, in which 77.2% for computers. But the

recovery rate is low and half left unused. With the large remains, high frequency and

recycling, the New World Company has reached an agreement to some banks and

communication enterprises. In 2006, 1296 sets and 792 sets are recovered from

government departments, the enterprises and institutions, the communication

enterprises respectively.

Through the above recovery methods, the New World Company has recovered

nearly 10,000 sets of the old appliances, and at the end of May, 2007, the company

has finished the target of 30,000 recovered sets which is proposed by Development

and Planning Commission at the end of 2006.

35

Figure 3-11 the Mapping of WEEE Closed-loop supply chain in Haier

� Exploring recovery processing management

A. Establishing information dispatch center

Through information dispatch center, the New World Company collects,

dispatches and manages the relevant information of each recovery procedure. The

main modes are:

Firstly is information management and dispatch. Set up the information website

for recovery processing of the old home appliances and hotline, then transfer the

information from clients to the information dispatch center, the recovery dictation

from information dispatch center transfers to the recovery station, finally the workers

make recovery door to door;

Secondly is capital management. Information dispatch center prepays to the

recovery station, after the old appliances are delivered to the disposal factory, the

disposal factory should pay funds to information dispatch center.

Thirdly is the overall process supervision. Regularly, information dispatch center

should report the recovery condition and capital-used condition to the government;

disposal factory should report the disposal condition to the government, which

supervises the disposal enterprises.

B. Setting up “Bills in 5 parts” system

In order to strengthen the supervision and management of the whole recovery

36

process, the New World Company proposes “Bills in 5 parts” system. The process is

as follows: After recovery, the workers fill “Bills in 5 parts” system and the clients

should sign for confirmation. Then the second bill should remain to the clients and the

first bill, as the evidence with the disposal factory should be kept by the financial

department. The third bill should be kept by the temporary warehouse, and the forth,

the fifth bill should remain to the development and reform committee, financial

bureau in order to realize the supervision of the recovery and disposal enterprises.

(3) Future plan

The next goal of Haier is to improve, innovate and update the current ecological

management model. It is a complicated project to develop circular economy and

construct resource-economized society and it need the attention and participation of

enterprises, government, and all social members. Haier will construct a

resource-economized enterprise, develop circular economy, improve ecological

operation process and create more ecological products and operation modes, then

update the successful modes which is the core developing concept for enterprises.

Ecological management: The enterprise has set circulation economic development

project. In the aspects of not only enterprise process optimization, management

principles and measures, but also ecological design, resource saving, water saving,

comprehensive utilization of resource and etc., Haier entirely advances the

construction of resource conservative enterprise.

3.6.2 Gome

(1) Brief Introduction

Gome appliance Co. Ltd was established on January 1st in 1987. It is affiliated

by Beijing Pengrun Co. Ltd, which is a national retailing chain enterprise engaging in

operating all kinds of appliance.

The Group has become the largest and most influential retail enterprise in the

industry. It has chain groups in Beijing, Tianjin, Shanghai, Chengdu, etc, around 130

chain stores. In addition, it has become the biggest dealer of companies like

Changhong, TCL, Konka, Xoceco, Hisense, Toshiba, Sony, LG, Philip, Sharp, Sanyo

etc. Products like television, air conditioning, CD player and so on of Gome have

ranged on the top since it has been a number of the commercial information web of

the national information industry center and the agent of national statistics.

(2) Network for appliance recovery

In 2004, the D&R community established Zhejiang as the first national appliance

37

and electric products recycling spot. As the national appointed spot for recycling,

Dadi environmental company has set up three communities recycling of waste

appliances in Hangzhou. However, "performance" is not satisfied, because the price is

lower than that of individual vendors. Therefore, Gome and the Dadi environmental

company of Hangzhou have established a long-term collaborative partnership for

exploring an orderly recycled mode and industry chain. Thus, Gome has become the

first home appliance retail enterprise of waste recycling.

Since August 2005, Gome has set up recycling spots in all stores in shanghai. If

consumer just simply makes a phone call; there will be some professionals picking the

up waste appliances in their homes. Regardless of whether the waste appliances

purchased from Gome, it will recycle and give certain fees to consumers according to

the market price, say, a TV set usually sells at several ten yuan. The cost is shared by

brand appliances manufacturers, professional environment companies and Gome.

All these recycled appliances will be sent to the Dadi environmental co. Ltd. to

be disassembled. And then, they will be further handled according to their own

features. For some toxic components, they will be burned to purify and landfill, and

some useful non-toxic components will be assembled, as second-hand electrical goods

sales.

Gome plans to cover the entire region of East China Electric Waste recycling

business network and subsequently will expand nation wide. Also, it will also

integrate its retail business into a giant cover of the waste recycling all over the nation.

Gome will enlarge the scale of recycling and reusing through the following three

ways: First, in all subsidiaries of Gome for recycling; Second, through news

conference to promote recycling of waste appliance; Third, try to contact the

producers to promote together, and establish some recycling programs with recycling

center around China, build up special network for waste appliance recycling etc.

38

Figure 3-12 the Mapping of WEEE Closed-loop supply chain in Gome

(3) Developing various recovery activities

Before cooperation with Dadi environmental company, Gome often financed

trading the old for new activities which aimed at recycling waste home appliance. For

example, in 2004 Gome launched the old free refrigerator replacement project. Only

in a week, the number of old refrigerator that below 10 years replaced is 570. The

number of old refrigerator that over 10 years replaced is 310. According to the request

of the activity, the refrigerator which is more than 10 years can freely be replaced by a

new equal value one. The refrigerator and washing machine whose using time was

less than 10 years can be seen as 200-400 yuan for purchasing new one in Gome.

Gome currently has invested more than one million yuan for the activity, and plans to

increase investment to meet the requirement of more consumers.

In 2007, the Gome together with Tianjin Environmental Protection Department

initiated citywide "waste battery recycling" activities. 28 chain stores of Gome set the

price of each waste battery as 10 yuan for all residents. Within two days, the stores

collected 6 million waste batteries, nearly 800 kg.

Gome has carried out such a large number of such "buy" activities of the used

electrical equipment frequently all over the nation. Society and environment have got

significant benefit from the activities.

(4) Problems in Recovery

� Phenomenon

Currently, Gome, Suning and other appliance chain stores have gradually

39

launched Waste appliance recycling programs. There are "recycling of waste electrical

cards" which are provided in many special counters. As long as dialing the telephone

number on the card, shopping centers will provide specialized personnel who repairs

and dismantle the machine freely. The recycle has very broad categories, including

color TV, air conditioners, refrigerators, washing machines and other traditional large

appliances, also including computers, mobile phones, digital cameras and other

products. However, consumers pay little attention on it. This program is not received

ideal effect as expected. Take Yongle as a example, its more than 50 stores in

Shanghai recycles obsolete home appliance less than 200 monthly.

� Problems

Now the main problem is the recycling price. That is, the price offered by home

appliance stores is far less than the price of individual vendors. As consumers, the

electronics waste is sold to the individual vendors both conveniently and profitably, so

it became their first choice.

� Solutions

The forthcoming national "appliance recycling waste management practices" has

stipulated that, "electronics dealers and service institutions are obliged to recycling

waste home appliance and recycled waste appliances should be sent to qualified

treatment companies, or they will be punished a fine of 100,000 yuan." Accordingly,

home appliance stores may become main waste recycling platform in the future. It has

promising development prospect.

Home appliance chain stores can adopt the following measures to increase

recycling efforts:

First, major appliance retailers should intensify publicity and intensify the waste

appliance recycling efforts;

Second, appliance chain stores should set up more collection channels to

facilitate inhabitants;

Third, the stores should establish own recycling companies.

3.6.3 Zhongxing

(1) Brief Introduction

Beijing Dong Du Zhongxing renewable resources Limited Corporation

(Zhongxing for short) original belongs to Chaoyang District recycling companies. It

has specialized in waste materials recycling and the obsolete materials management

for many years. Its major business are: The recycling industry(including waste metal,

40

waste material, waste home appliance and electron product); selling of building

material , hardware etc. The staff of the company is more than 200 people. In 2004 the

total waste material recycling comes to70 million tons. The revenue is 13,548 million,

profit 1.16 million yuan.

Zhongxing Corporation in 1998 was appointed as designated company to

standardize recycling industry by the government. The company has invested over 25

million to build 6 major renewable resource-recycling markets that covered the

Chaoyang District. Zhongxing Corporation was the first one who passed the ISO 9001

quality management system, ISO14001 environmental management system double

certifications in 2002. On October 27, 2005, the National Development and Reform

Commission, the National Environmental Protection Administration and other

departments have jointly issued a document - "announcement of on the organization

of the economic cycle in the pilot (first)" (D&R funding [2005] 2199), ZHONGXING

Corporation was designated as the recycling industry pilot units (only two appointed

companies of the project, only one in Beijing).

Currently, the accomplishments of ZHONGXING renewable resources system

are listed as followed:

The construction and management of recycling system in Chaoyang District;

taking the lead in China to create in the domestic distribution model of market

renewable resources;

Initiated business of recycling into enterprises and government, schools,

organizations in door collection service; Active exploration of specialized packing of

waste paper; vigorously carried out the business of waste appliances and electronic

products recycling;

Launched "Olympic volunteer, service Olympics". It has established a recycling

spot in the Olympic Plaza, and has become the only company, which participates in

the Olympic renewable resource recycling.

(2) Second-hand electronics market

ZHONGXING Corporation has set home appliances and electronic products

recycling, transaction as a strategic goal, and carry out specific investigation for the

entire process, which help them, put forward an effective method on waste electrical

appliance recycling. On July 28, 2005, the Chaoyang District Commerce Bureau

approved ZHONGXING to establish second-hand electronic products trading centers

projects, and appointed ZHONGXING as waste recycling home appliance and

electronic products designated unit.

41

Figure 3-13 Products transaction processing model of Zhongxing

42

3.7 Countermeasures and Suggestions

Because it is difficult to dispose the electronic wastes, the way of recycling and

utilization must be sizable and industrialized. We need to improve the technique level

and eliminate pollution. Based on the analysis of the statue quo of China’s electronic

wastes, we give out the following management suggestions and countermeasures.

3.7.1 Making relative laws and policies

Through the analysis of China’s WEEE recycling and utilization, it is known that

there are no favorable laws and policies in China, which lead to high risk of the

market. Therefore, few companies are willing to enter the market. Therefore, a

complete law and regulation system of WEEE disposal together with the law

enforcement in the WEEE recycling can facilitate the whole range management of

WEEE and also serve as a reliable guarantee to improve the WEEE recycling

industry.

The “Electronic Waste Disposal Law” in China should include the following

issues. Firstly, the manufacturers of the electronic products have the obligation to use

the recyclable material and recycle a certain proportion of electronic waste with their

brands, i.e., they have “Extended Producer Responsibility”. And sometimes we can

add some allowance and cut down some taxes for encouragement. Secondly, the

consumers also have the obligation to sort together the electronic wastes and send

them to the designated recycling places. Thirdly, the individual vendors should send

the electronic wastes to the designated recycle places and get the equal pay and

allowance. It is forbidden to transport and sell the wastes to the rural places. At last,

the environment protecting departments should also supervise the processes of

producing and the recycling of the electronic products.

3.7.2 Building up the recycle system suitable for the China

Building up the recycle system successfully is the foundation of the WEEE

recycling and utilization, and also the precondition to achieve industrialization

because only after the stable collection channels are built can the recycling companies

reduce the investment risk and the present electronic waste disposal center being

benignly developed.

43

Therefore, we suggest building up the integrated collection network, which has

three parts. The most important is the collection by producers from door to door; the

second is the collection by dealers at designated places, and the third is the collection

by professional recycling firms. The individual vendor, as one of the key control point,

is the most important cut-in point to solute the electronic waste problems at present in

China. Based on the present material recycling firms, we need to set up the

professional recycling firm. Then we need to bring the individual vendors into the

system and establish relative WEEE recycling standards, such as the workers must

unify dresses and wear nameplate and so on. At the same time, we also need to

publicize and educate more, to help people to take the reject attitude towards the

illegal recycle, and improve supervision too.

Besides, we need to push the recycling model of tracking corporations in line

with Extended Producer Responsibility. For those firms who cannot attend to the

self-recycling, they will be asked to pay taxes of “Electronic Waste Disposal Tax”, to

deliver the fee of disposing electronic wastes. We also need to carry out the system of

“Electronic Waste Disposal License”. For those electronic firms who have not got the

license, they need to pay the taxes of “Electronic Waste Discharge Tax”, and their

electronic wastes will be sent to the certified firms for disposal. And the taxes will be

used as the allowance given to the firms that recycle and dispose for those uncertified

firms.

3.7.3 Standardizing the second-hand WEEE market

The standardization of the second-hand market is the key to the healthy

development of the whole industry. However, most of the second-hand markets, at

present, are formed spontaneously and lack management. Some formal second-hand

markets are only managed in the hardware. There are no interference in the specific

operation and the quantity and safety of the dealing products.

Therefore, the standardization of the second-hand market must base on the

products management. First, we must clack down on booths and stalls that operate

without license or do unlawful business. Second, firmly obey the guiding standard,

such as “The Quality Authentication for Second-hand Products and Home Appliance”.

The standard not only gives out the normal criterion of the second-hand home

appliances in the market, but also fixes the duration of WEEE products. Every

second-hand home appliance must be pasted with this sign, which will make the

process of recycling and selling more transparent. At the same time, we need to

44

intensify the supervision of the second-hand market and make sure the effective

enforcement of the standard.

3.7.4 Strengthening Recycling Collaboration between

Government and Enterprise

The resolve of WEEE recycling needs reinforcing the cooperation between

enterprise and government.

Firstly, the enterprise, especially the enterprise producing electronic products,

should strengthen own social sense of responsibility. They should take the reverse

logistic to the high level of enterprise strategy. Though it may increase the operation

cost, it can not only enhance the enterprise the social image but also protect natural

environment in long term.

During the recycling process of WEEE, the government should play a role of

management and the coordination. The government should set up a special

department in charge of supervising the WEEE recycling behaviors. Furthermore,

since the economic return of WEEE recycling is very low, enterprises are reluctant to

work on recycling activities, which needs the appropriate stimulation in terms of

policy and funding.

45

Reference

1. Ru Yihong, Resource Management，Beijing: China Railway Press, 2001

2. Ru Yihong, Logistics, Beijing: China Railway Press, 2003

3. Ru Yihong, Control Countermeasures of Waste Source on Passenger Train in

China, Journal of the China Railway Society, No.3, 1999.6

4. Zhang Keming, Ru Yihong, Huang Bo, Zheng Kai, Research on Optimum Ratio

of City Industrial Department with Restriction of Solid Waste, ICM2000, 2000.9

5. Ren Fumin, Ru Yihong, Xu Zhaoyi, Investigation of Heavy Metal Elements in

Municipal Solid Waste in Beijing, Journal Of Northern Jiaotong University, No.4,

2001.8

6. Ru Yihong, Zhang Keming, Lu Xiaochun, etc. Control Countermeasures Of

Municipal Refuse in Beijing, Proceedings for the fourth International Conference

on Life and Environment, 2001.9

7. Huang Bo, Ru Yihong, Wang Tao, The Research of Point Choice on Network

Problem, ICTTS2002, 2002.7

8. Ren Fumin, Ru Yihong, Xu Zhaoyi, Analysis on Composition and Pollution of

Garbage in Railway Passenger Train, Journal of the China Railway Society, No.4,

2002.8

9. Li Xianfen, Ren Fumin, Ru Yihong, Xu Zhaoyi, The Investigation of Heavy

Metal Elements in the Municipal Solid Waste of Beijing, Environmental

Monitoring In China, No.3, 2003.6

10. Zheng Kai, Ru Yihong, Ren Fumin, Lin Zikui, Research on Source Management

of Construction Solid Waste, Journal of Beijing Jiaotong University(Social

Sciences Edition), No.1, 2004.1

11. Wu Yanqiu, Haier Begins Mining the Gold of Electronic Wastes, Non-Ferrous

Metals Recycling and Utilization, 2004.10

12. Dong Suocheng, Fan Zhenjun, Research on the E-Waste Circular Industry in

China, Resource Science, 2005.1

13. Zheng Kai, Ru Yihong, etc., Countermeasures on Municipal Solid Waste in

Beijing During the 2008 Olympic Games, Proceedings of The 5th International

Conference on Material Handling, 2005.11

14. Tian Jun, Feng Gengzhong, Study on the Strategies ＆＆＆＆ Measures to Reinforce

Waste Electronics Management, China Soft Science, 2005.12

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15. He Yi, Ji Guojun, Electronic product industry's counter logistics analysis,

Shenzhen Economy, 2006.1

16. Ge Yajun, Jin Yiying, Nie Yongfeng, Study of Electronic Waste Recycling

Management, Environmental Science & Technology, 2006.3

17. Chen Yinyuan, Li Huayou, Structure Characteristics and Policy Suggestion for

Waste Electronic Market, Environment and Sustainable Development, 2006.6

18. Lei Zhaowu, Yang Gaoying, Fabrication of China’s Electronic Waste Collection

System, Environmental Science and Management, 2006.11

19. Luo Zhihua, Zhou Gongming, Study on the Current Situation of Electronic

Waste in China, Jiangsu Environmental Science & Technology, 2006.12

20. Zhu Yu, Ru Yihong, Zheng Kai, A Conceptual Analysis on Circular Logistics

System, Journal of Beijing Jiaotong University (Social Sciences Edition), No.4

2006.12

21. Liang Bo, Wang Jingwei, Xu Jinqiu, Recycling and Reutilization of WEEE in

China, Environmental Science & Technology, 2007.1

22. Shi Jian, Xu Dehong, Study of Recycling of Electronic Waste in Recycling

Economy, Northern Economy and Trade, 2007.2

23. Pan Hongmei, Li Fengquan, Ye Wei, Wang Junjin, The impacts of dismantling

electronic wastes on surrounding soil environment：：：：Take Xiagu ao of Luqiao。。。。

Taizhou as an example, Journal of Zhejiang Normal University(Nat．Sci.), No.1,

2007.2

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and Electronic Equipment, China Association of Resource Comprehensive

Utilization, 2007.3

25. Song Xu, Zhou Shi-jun, Estimation of Waste of Electrical and Electronic

Equipment Generation by Estimation Modeling, Henan Science, No.3, 2007.6

26. Fan Wenji, Ru Yihong, Supplier-General Contract Model for the Bargaining

Process Over a Long Term Replenishment Contract in the Construction

Circular Logistics System. ICCERM2007, 2007.10

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Wasted in Beijing 11th 5-year Period

28. http://news.csdn.net/n/20070517/104138.html.

29. http://info.china.alibaba.com/news/detail/v5000441-d5357930.html.

30. http://news.ccw.com.cn/internet/htm2004/20040816_0966Z.htm.

31. http://www.china-188.net

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32. http://www.xawb.com/gb/news/2005-03/01/content_488975.htm

33. http://huaibao.jobui.com

34. http://www.chinahbw.com

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Appendix

Appendix1: Questionnaire on the WEEE of Beijing

(1) What kinds of WEEE list below are appeared in your family? (Multiply choice) A. Large-scale domestic electric appliances waste

B. Small-scale domestic electric appliances waste

C. Athletic facilities waste

D. Information equipment waste

E. Daily thing waste, such as radio

F. Electronic toy waste

G. Else, for instance

(2) Would you sell them to the individual vendors, if the WEEE appears in your family? (Multiply choice)

A. Selling the waste to the individual vendors, if they come：

B. Selling most to them, brushing off the other；they are ：

C. Selling a small part to them, bushing off the other；they are ：

D. Bushing off all the waste；

(3) If you choose C or D in question2, the reason why you bush off them is?(or overleap this question) (Multiply choice)

A. The money that you receive from recycling these goods is not worth your time

B. You did not know that they could be recycled

C. Recycling is too inconvenient

D. You did not know that they could be recycled

E. You do not have enough time to recycle the goods

F. Not enough space to store the recycling at home before taking the goods to the

facility

G. Others, such as

(4) How do you deal with the WEEE appearing in your family? A. Sold them in the second-hand market

B. Sold them to the individual vendors

C. Exchange with emporium for a new one

D. Sending them to your relations

E. Others, such as

(5) If you choose B in question 4, why did you sell them to individual vendors? (or overleap this question) (Multiply choice)

A. Individual vendors can provide a higher price

B. You are too busy to send them to the second-hand market

C. It is convenience, because the individual vendors come to you home to recycle the

WEEE

49

D. Not enough space to store the recycling at home before taking the goods

E. Others, such as

(6) Do you know the location of fixed collection points in your area? (Single choice) A. I know exactly where it is

B. I know the area that it is in

C. I know that we have a facility, but I do not know where it is

D. I did not know that these kinds of facilities existed

(7) What is you opinion on setting a fixed collection points in your area? (Single choice)

A. Very good, it is convenience

B. Quite good, it come meet your need

C. Indifferent

D. Antipathy, the price is unequal

E. Oppose, it pollutes the area

(8) What do you think are the best choice to improve the service of the collection points? (Multiply choice)

A. Increase the number of the collection points

B. Scheduling pickups over the telephone

C. Scheduling pickups over the internet

D. The extension of working hours

E. Increase the number of the practitioners

(9) How many WEEE does your family produce? (Single choice) A. A piece server days

B. A piece per week

C. A piece per month

D. A piece every half year

E. A piece per year

F. A piece server years

(10) What is you attitude on selling the WEEE to individual vendors? (Multiply choice)

A. Very good, it is convenience

B. Quite good, it come meet your need

C. Indifferent

D. Antipathy

E. Oppose, they prejudice the law and order

(11) What do you think are the best choice to improve the situation? (Multiply choice) A. Unified managing the practitioners

B. Establishing fix collection points in the area

C. Forbidden the practitioners coming into the area

D. Others, such as

50

Finally, please provide some of your personal information：

(12) age

(13) Number of people in your family

a) how long have you living here?(single choice) i. no more than two years

ii. two years- than five years iii. Five years-ten years iv. More than ten years

b) How much is the monthly income of your family?(single choice) i. No more than 2,000yuan per month

ii. 2,001yuan per month-3,500yuan per month iii. 3,501yuan per month-5,000yuan per month iv. 5,001yuan per month-8,000yuan per month v. more than 8,000yuan per month

c) What are the vocational of your family member?(Householders or others) i. worker

ii. Private owners iii. Servicemen iv. Government officials v. State-owned entrepreneurs

vi. Staff vii. Intellectuals viii. Teacher ix. Other

51

Appendix2: Questionnaire on second-hand market of

WEEE in Beijing

(1) Do you have the WEEE classified when you recycle them? A． yes B． no C． not necessarily

(2) If you have it classified, how many categories do you have it classified? A． two, they are B． three, they are C． four, they are D． five, they are

(3) How do you deal with the WEEE you recycle? A． Having them repaired or renew, then resold them to the consumer B． Dismantling them because they are too worn C． Burying them directly

The proportions: (4) If you choose B in question 4, how do you deal with the waste had been

Dismantled?(Or overleap this question) A． Using as Spare parts B． Selling them to the Waste recycling plant C． Burying them

The proportions: (5) How often do you deal with the waste you collected?

A． Never B． Server days C． Once per day D． Twice per day

(6) If you choose B in question 5, how dose the Waste recycling plant deal with the waste?(Or overleap this question) A． Extracting the raw materials B． burying

The proportions: (7) How do you get along with the residents?

A． very good, very harmonious B． quite good C． indifference D． not very good E． badly, they subject us

52

(8) How many second-hand market for electrical product are there in Beijing? (9) How to make out the scale of second-hand market?

A． acreage B． capital C． kinds of product

(10) How many WEEE can you recycle per day and how many can you sell per day?

(11) How long that the WEEE store in second-hand market?

(12) Where the WEEE come from?

A． individual B． firm or individual vendors

(13) How to establish the price of the second-hand product? A． Bargaining B． Government constitute it

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