China - Holland Circular Hotspot

Circular Economy Opportunities in China

China’s focus on the circular economy has grown steadily in recent years. Over the last four decades, the country witnessed unprecedented economic development, making the country consistently a top world economy and a major manufacturing hub exporting worldwide. Such a high growth pace has however negatively impacted on the environment, with China currently ranking as the third largest waste producer and biggest carbon emitter globally. This has encouraged policymaking in the direction of circularity.

In particular, waste management issues are especially prominent in the Chinese construction sector, which accounts for over 7% of national GDP (2020). The new waste streams originated by the development, demolition and renovation of buildings and infrastructure are creating an enormous opportunity for circular initiatives and business models, significantly fueled by numerous governmental policies contained in the latest five-year economic plan (2021-2025).

On this page, you can find find key information on the policy landscape, circular economy strategy, and selected priority areas. If you are specifically interested in the Chinese construction sector, download the 2-pager below or go to the dedicated page.

Facts & Figures

Economic indicators

Size: China is 280 times larger than the Netherlands
Total Landmass (2020): 9,424,702.9 square kilometres
Population (2020): 1,41 billion
Nominal GDP & Ranking (2020): $ 14,87 trillion; #2
Imports from the NL (2020): $15,6 billion
Economic growth (2020): 2.34%
Purchasing Power: $10.51
Ease of doing business rank (2020): #31
Corruption index: 42/100
Unemployment rate (2021): 4.8%
Currency: Renminbi Yuan
Time difference NL: +7 hrs

Circular economy indicators

Global innovation index (2021): #12
Construction Waste Recovery rate (2020): 50%
Bulk Solid Waste Recovery rate (2020): 56%
Recycling rate of urban household waste: 50%
Electricity from Renewable Resources (2020): 28.8%

National Policy Landscape

China’s exponential economic growth has also had negative impacts on the health of the local population and the environment. Following public concerns about pollution levels and increasing amounts of waste, the Chinese government has initiated a number of actions and national strategies to green their economy. A major turning point between 2017-2019 was the decision to cease most of the formerly extensive waste imports to the country and introduce policies to accelerate materials recycling. More recently, the Chinese government has started to heavily invest in waste management solutions and renewable energies (in particular wind and solar – read the box below for further information) through the latest five-year economic plan (2021-2025). The plan features targets for reducing water and energy use, developing a circular industrial system, improving recycling capacity and promoting a materials reuse market, particularly in the infrastructure and buildings sectors.

Other environmental milestones set by the Chinese government include:

reusing 60 % of all construction demolition materials by 2025
peaking national carbon emissions by 2030
sourcing a third of all electricity from renewables by 2025
achieving net-zero emissions by 2060.

Additionally, the ‘Development Plan for the Circular Economy (2021)‘was introduced to foster resource efficiency and materials recycling, product remanufacturing and circular design practices, within the framework of the 14th five-year plan. Other relevant policy goals set by the Chinese government in the field of CE include increasing the share of electric vehicles (EVs) to reach 20 % by 2025 (the country already represents the biggest market for EVs) and gradually phasing out all single-use plastics by 2025. All these national targets and policies are currently being implemented by governments at regional and municipal levels.

Circular Construction in Shanghai, Shenzhen & Nanjing

Given the multitude of circular economy initiatives across China, the 2022 Dutch Trade Mission to China focused on the three major Chinese cities, Shanghai, Shenzhen and Nanjing, and their local CE developments in the construction sector, which offer plenty of opportunity for Sino-Dutch collaborations. Discover more on the dedicated page.

Circular Construction in China

Renewable Energy

In China, wind energy (around 330 GW at the end of 2021) and solar energy (306 GW) are forecasted to double by 2030, reaching 1,200 GW generation capacity. The governmental goal for 2025 is to meet 33 % of the total energy demand through renewables. In 2021 alone, a capacity of 17 GW in offshore wind farms were installed (1.5x the total capacity of the UK, who has the second largest national capacity worldwide). Government subsidies to offshore wind farms were phased out by the end of 2021, which may put pressure on local developers to increase the efficiency of their future projects. This represents a real opportunity for Dutch businesses active in the offshore wind sector to provide installation and foundation solutions to their Chinese counterparts. Another fast developing area is that of wind blade recycling, since the rapid growth of the sector is pushing local governments and developers to implement sustainable practices along the entire value chain. With this aim, a company consortium of supply chain actors including turbine manufacturers was set up through the China General Certification to foster technology development, circular business models and improved collection systems. Other than blade recycling, circular solutions with potential for expansion and fruitful collaborations include foundation construction, new materials, circular, refurbishable, and modular/dismountable capital equipment, and telemetry.

Fujian Changle Waihai Offshore Wind Farm, cooperated with Dutch company SPT Offshore

Circular Batteries for E-Mobility

China dominated the world’s lithium-ion manufacturing market in 2021. The Ministry of Industry and Information Technology of China (MIIT) published the “Industry Standard Conditions for Comprehensive Utilization of Waste Power Batteries for New Energy Vehicles” in 2016 and an update in 2019, aiming to further regulate and guide the development of Chinese battery recycling market. China Automotive Technology Research Center predicts that China needs to recycle 137,4 Gkwh capacity of waste battery in 2025, which is more than five times the amount recycled in 2020. According to data from State Administration for Industry and Commerce of the People’s Republic of China (SAIC), China has 36000 registered company with business activities related to battery recycling, of which 67% newly registered in 2021.

Circular Plastics & Design

As the world’s largest plastics producer and consumer for decades, China has gradually built the largest plastics recycling capacity in the world. From 2008 onwards, China implemented a series of national plastic pollution control policies to tackle the enormous environmental concerns. The current priority is technological innovation to reduce use of raw materials in plastics production, increase waste plastics recycling and limit carbon emission. China is looking for solutions to deal with i.e. the large amounts of plastic waste from e-commerce packaging. Potential collaboration areas are plastics recycling technologies (i.e. chemical recycling), and sorting and separation technologies which are crucial to the efficiency and quality of end products of recycling.

When looking at circular strategies across the value chain, it is worth noting that the interest for circular design is increasing in China to tackle global challenges like resource scarcity. As the world’s largest manufacturing hub, there are many opportunities in this part of the value chain in China besides other important circular strategies like remanufacturing and recycling.