The Effect of China’s Ban on Foreign-Trash Import

Dr. Trina Biswas
Department of Agricultural Economics & Agribusiness,
Louisiana State University, Baton Rouge, USA.

Contact: [email protected]

Over the last several decades the ‘Global South’ countries have been the dumping ground of toxic or hazardous wastes coming from the ‘Global North’ countries. For years China topped the list of Global South countries as the world’s top destination for recyclable trash followed by countries like Ghana, India, Philippines, etc. As it is cheaper to export garbage to China and as the country has no equivalent when it comes to waste-management capacity, China has always been thetop destination for foreign garbage or foreign recyclable trash. Also, China has always encouraged imports of recyclables to support the boom of its manufacturing sector. In 2016alone, China imported more than fifty percent of globally exported plastic waste. According to China Scrap Plastic Association, 7 million tons of plastic scrap was imported by China in 2016 mostly from countries like USA, UK, and Japan. The value of those recycled material amounted close to 3.7 billion U.S. dollar.

In the recent years, the deterioration of China’s water, air, and soil quality partly resulted from the huge imports of foreign-waste,forcing the Chinese government to take stricter measures to curb the environmental pollution. To address major environmental and health issues, in July 2017, China filed a notice with the World Trade Organization to limit the entry of foreign garbage into the country. The decision came into effect from January 1, 2018. The ban includes imports of 24 categories of harmful and most polluting solid waste, including certain types of plastics, scrap paper, and textiles.

This ban has created a huge disruption for countries like USA, UK and other European countries which are highly dependent on China for waste management. Since there is no other waste-management market as equipped as China to handle a huge amount of foreign waste, this ban might lead to a crisis situation for the entire recycle industry as a whole in the coming months.

This ban can also lead to a situation where a huge amount of foreign waste will be exported to many emerging markets in Southeast Asia which have less regulated and poorly equipped waste-management facilities. As these countries cannot effectively process the foreign garbage, the foreign-waste might end up in incinerators or landfills and thereby severely affect the environment and health of people living in those countries.

This ban will also severely impact the jobs dependent on recycling industry in the exporting countries like USA, UK, and other European countries.According to the U.S. Institute of Scrap Recycling Industries, nearly half of all U.S. recyclable exports go to China and the recycling industry supported 155,000 jobs in the U.S. in 2016.According to them, around$5.6 billion worth of scrap was exported to China in the same year. A ban on exports of garbage from the U.S. to China will severely affect the industry, both in terms of jobs and revenue.On a positive note, this ban might usher in a new era of recycling by forcing these waste-exporting countries to adopt more rigorous and progressive waste management and recycling system. This ban will also propel the government of all these waste-exporting countries to introduce more comprehensive and more effective waste management measures within the country to ensure proper recycling of garbage. Otherwise, piling up of garbage in the local landfills will jeopardize the environment.

For China, this ban will mostly serve as a boon along with few negative externalities in the short-run. This ban will affect the jobs of people who are dependent on the recycling sector. Many people will lose their jobs as lower imports of foreign garbage will lead to the closure of many recycling facilities and lay-off of staffs across the country. Also, lower imports of foreign-waste will increase the competition between existing players in the waste-management market. The ban on imports of foreignwastewill boost domestic recycling companies as the whole recycling and sector will become more dependent on the domestic supply for materials. Therefore, this ban will lead to a major stimulus for China’s own waste management and recycling market, as well the manufacturing market.

By @multidi_mag

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