China to establish auto recycling policy

In April 2008, Chinese Premier Wen Jiabao visited an automobile recycling facility in Nagoya, Japan, and was surprised when he saw the highly developed industry of automotive recycling which is far ahead of that in China. On July 24, he announced that China will undertake reform of its existing auto recycling industry to build a modern recycling economy in the automotive industry.

In August, the Chinese Commercial Department held a meeting to consider measures for the development of the automobile (end-of-life-vehicle) recycling industry. Participants in the meeting were the National Development and Reform Commissions, Environment Protection Department, Industry and Commerce Department, Tax Office, China National Resources Recycling Association, major carmakers, and waste collection companies. Under this background, the China Nonferrous Metal News interviewed Mr. Jian Min Liu, Chairman of the China National Resources Recycling Association. He analyzed the issues for the existing auto recycling industry as follows:

"One of the barriers for the development of the industry is a lack of management capability on the part of the authorities," he said.

“Under the planned economy in the past in China, ELV recycling has been supervised and managed by two sectors. One is the resources collecting companies and the other is the sales cooperation system under the auspices of the Commercial Department. In the past, resources collecting companies had the right to distribute used steel and nonferrous materials and thus the two sectors have been opposed to each other. That disunity of management was still seen even after the country entered the market-driven economy. At present, the Construction Bureau of the Commercial Department manages the collection of ELVs, while the Environment and Resources Bureau of the Development and Reform Commissions monitors the remanufacture of auto-parts. And the Environment Protection Bureau joins the administrative work for that matter. In addition, the Information and Industrial Department and General Utilization Bureau were newly appointed as the management arms of ELVs. Will the disunity of management help development?"

Moreover, the Construction Bureau of the Commercial Department, which manages the collection of ELVs, is also responsible for the management of the new and used vehicle market. Today, a huge number of vehicles are already used across the country and 4 million ELVs are generated every year. It is necessary to build a strong and unified management to cover such a wide market. In order to develop the automobile recycling industry, we need to resolve the lack of management capability."

--China Nonferrous Metal News October 18 issue