Waste-sort­ing cam­paign in full swing in China

Cir­cu­lar econ­omy on the rise amid en­vi­ron­men­tal push

Global Times US Edition - - BIZUPDATE - By Wang Yi

Chi­nese com­pa­nies in the en­vi­ron­men­tal sec­tor are poised to ben­e­fit this year as the coun­try steps up im­ple­men­ta­tion of its waste-sort­ing and re­cy­cling cam­paign, backed by cen­tral and lo­cal gov­ern­ment poli­cies.

With pref­er­en­tial poli­cies and hun­dreds of bil­lions of dol­lars to sup­port the cam­paign, en­vi­ron­men­tal com­pa­nies that sup­ply equip­ment, chem­i­cals and other ser­vices will see a sig­nif­i­cant rise in mar­ket de­mand, in­dus­try in­sid­ers and an­a­lysts said.

This ex­pec­ta­tion has been re­flected in the re­cent stock rally of en­vi­ron­men­tal com­pa­nies, which out­per­formed China’s ma­jor in­dexes last week. Many of these com­pa­nies rose by the daily limit of 10 per­cent in re­sponse to new poli­cies.

On June 5, the State Coun­cil, China’s cab­i­net, ap­proved a draft law for curb­ing solid waste pol­lu­tion dur­ing an ex­ec­u­tive meet­ing. One day later, the Min­istry of Hous­ing and Ur­ban-ru­ral De­vel­op­ment is­sued a draft plan to im­ple­ment garbage-sort­ing in cities across the coun­try.

Ma­jor cities across the coun­try have also re­leased their own poli­cies and reg­u­la­tions. For in­stance, Shang­hai will start to im­ple­ment waste-sort­ing from July, with po­ten­tial fines of up to 200 yuan ($29) for in­di­vid­ual vi­o­la­tors and up to 50,000 yuan for of­fend­ing or­ga­ni­za­tions.

This in­ten­sive roll­out of poli­cies shows the gov­ern­ment’s com­mit­ment and points to mas­sive de­mand for a wide range of en­vi­ron­ment friendly prod­ucts and ser­vices.

Gu­osheng Se­cu­ri­ties Co based in Bei­jing es­ti­mated that about 160 bil­lion yuan will be needed for in­vest­ment in equip­ment and fa­cil­i­ties af­ter garbage-sort­ing is fully im­ple­mented.

Mak­ers of equip­ment for chem­i­cal and bi­o­log­i­cal dis­posal of wet garbage will see an es­ti­mated growth po­ten­tial of 56.5 bil­lion yuan in equip­ment sales, and op­er­at­ing this equip­ment will cost about 13.7 bil­lion yuan ev­ery year, Shang­haibased Guo­tai Ju­nan Se­cu­ri­ties said in a re­search note.

In Shang­hai alone, from 2018 to 2020, a to­tal of 20 bil­lion yuan will be in­vested in the im­ple­men­ta­tion of its waste-sort­ing plan, Shang­haibased news­pa­per Jiefang Daily re­ported.

Com­pa­nies are al­ready rush­ing to pre­pare for ris­ing de­mand. Tus-sound En­vi­ron­men­tal Re­sources Co told the Global Times that it is plan­ning to in­crease pro­duc­tion, up­grade its busi­ness struc­ture and ex­pand its mar­kets to take ad­van­tage of the new round of ben­e­fi­cial poli­cies. The com­pany’s share rose 32.42 per­cent to 12.99 yuan last week.

Zhang Miao, the founder of waste-sort­ing com­pany R Cu­bic, said that she is con­fi­dent about busi­ness growth. “With so many pref­er­en­tial gov­ern­ment poli­cies, there is no ex­cuse for com­pa­nies to fail any­more,” she said.

The ex­pected boom for the en­vi­ron­men­tal sec­tor could per­sists be­cause sus­tain­able and green de­vel­op­ment con­cepts are what China’s econ­omy needs amid a tran­si­tion from high-speed to qual­ity growth, an­a­lysts said.

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