Since the 1990s, the world has shipped its waste paper, discarded plastic and unwanted metals to China, where they are destined to be used as raw materials to help power the country’s export-driven manufacturing boom. In 2016, China imported about $18 billion worth of what the government calls solid waste.
But China doesn’t want to be the rest of the world’s trash can, writes The New York Times (Dec. 4, 2017). Over the summer, regulators in Beijing started an unusually intense crackdown on what they called “foreign garbage,” citing health and environmental concerns.
As with so much else in the global economy, China’s decision is rippling through a vast supply chain that stretches from big waste companies in Texas to the “cardboard grannies” in Hong Kong that pick through mounds of paper and plastic. Scrap dealers are rushing to find buyers elsewhere in Asia, but the Chinese market is so large that it cannot be easily replaced. “It’s almost like they turned the spigot off overnight,” said the president of Waste Management.
As China revved up its manufacturing machine to power growth over the years, officials were willing to tolerate some of the downside of scrap, namely the pollution of local soil and rivers by low-end recycling practices. But China’s economic might increasingly means that it no longer needs to make such environmental sacrifices.
In the U.S., the new rules mean more garbage could stay at home. While that could be good news for some recyclers, it could also mean more waste in the country’s landfills. Recyclers might also have to upgrade their facilities to handle the waste, leading to higher costs for American municipalities and taxpayers.
Classroom discussion questions:
- Why is this an issue for operations managers?
- What should U.S. municipalities do the offset the impact?