Eager to become the world's workshop, but wary of becoming its trash bin along the way, China is laying plans for stricter regulation of the scrap industry.
Under a regulation issued in mid-December, businesses shipping scrap to China will be required to register with Beijing by July 1 and get government approval. Chinese regulators have not yet said what standards they will set in deciding which companies may register.
Chinese imports of steel scrap have nearly doubled in the last three years and are expected to double again in the next two years, as the steel industry has expanded even more rapidly than the rest of the fast-growing economy.
In addition to steel scrap, imports of copper and other scrap have also increased, since it is considerably cheaper to remelt existing metal than to process raw ore.
Meng Jianbin, the director of international cooperation at the Metallurgical Council of China for the Promotion of International Trade, a Chinese trade group, said that the scrap industry posed a continuing environmental problem.
"The environment is better than before, but it still has not reached the best result," he said. "The scrap processors are using very old ways to do the scrapping, which is very harmful to the environment."
Most of the processors are still small and medium-size companies with little money to invest in modern, less-polluting equipment, Meng said.
"The government has asked the scrap processors to report to the government about whether the methods they use are harmless or not, but usually the scrap processors don't bother," he said. "In the past, the scrap industry has been a mess. The government is now making rules for them to follow."
Felipe Tan, who used to own a scrap auction yard in Guangdong Province in southern China and a factory that sliced open secondhand telephone cables to extract the copper, said he left the business after being undercut by smaller companies with dubious business practices.
"We got competitors coming in who were burning cables, throwing fiber scraps into the river," Tan said.
The Bureau of International Recycling, a trade association, based in Brussels, Belgium, with 500 members, including many of the world's largest scrap and waste management companies, supports greater regulation in China, said Francis Veys, the group's director general.
Tighter supervision should result in a cleaner environment in China, he said, by making it harder for less scrupulous companies to dump almost anything in containers and send it across the ocean. It will also force companies to do more work in places like the US and Europe, separating trash from scrap before shipment, Veys added.
"We are very much in favor of controls," he said.
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