Market News

 December 21, 2015
China's Notorious E-Waste Village Disappears Almost Overnight

 Just days after the Dec. 1 order for all 3,000 remaining unregulated electronic-waste workshops to move to a newly built industrial park or face power cuts, the smell of burning plastic from the few waste fires smoldering on the roadside still hangs heavy in the air around Guiyu.

Yet the visual reminders of the notorious village are largely absent.

Gone are the trucks loaded beyond capacity with old cathode-ray tube television sets, boulder-size burlap bags overflowing with printed circuit boards, acrid smoke wafting from improvised aluminum chimneys jutting out of the first-floor workshops where the world's electronic waste was cooked over a chemical broth in metal woks by thousands of migrant workers.

Guiyu, the village in eastern Guangdong province known infamously for over a decade as the "e-waste capital of the world," is now a ghost town.

'The Place Is Dead.'

On Dec. 8, Bloomberg BNA visited Guiyu with Jim Puckett, executive director of the Basel Action Network, a Seattle-based group pushing for better regulation and recycling of e-waste, in part to keep it from ending up in places like Guiyu where it is dismantled in ways that expose often underpaid workers to toxic fumes and materials. Puckett was making his seventh visit to the village.

Also on the trip was Lai Yun, a campaigner for Greenpeace based out of Hong Kong.

"It is amazing how much of this has moved," Puckett said during the drive around Guiyu, as the total transformation of the town began to sink in. "The place is dead. Boarded up."

What at its height was a bustling yet heavily polluted town with 5,000 or more informal e-waste workshops and dismantling facilities, has been cleared out as part of China's "war on pollution" and move toward better regulating electronic waste as it becomes more of a domestic, rather than imported, problem.

According to some estimates, just a couple of years ago, more than 1.6 million metric tons of e-waste passed through Guiyu annually, with extraction of precious metals, plastics and other reusable parts generating more than $800 million annually for the workshops in the village.

Other estimates stated that as much as 70 percent of the e-waste in the world used to come through Guiyu at one point, though in the past three years Chinese authorities have clamped down on the import of waste, coming at a time when domestic waste is rising rapidly.

World's Biggest E-Waste Producer

By 2017, China is expected to be the biggest e-waste producer in the world, outpacing the U.S. Most recent figures had China producing about 6 million tons annually and the U.S. a little more than 7 million tons a year.

A study the United Nations University released early in 2015 put the global total of e-waste discarded at 41.8 million metric tons in 2014, with only around 6 million tons recycled by licensed processors (38 INER 1125, 8/26/15).

The most recent data from the Ministry of Industry and Information Technology (MIIT) indicated that at the end of 2013, around 100 million washing machines, televisions, refrigerators and air conditioners and more than 70 million mobile phones were disposed of domestically in China annually, with about 10 percent of that filtered through licensed, legitimate e-waste processing facilities.

Much of the rest of such waste had been going through places like Guiyu or landfilled, causing potential long-term pollution problems from heavy metals and other hazardous waste contained in those products.

'Where Is It Going?'

Along the road, where the chimneys once protruded from houses, holes were plastered over with fresh cement, nailed over with boards, or closed up with wire mesh. Occasionally sawed-off remnants of the chimneys could be seen propped in corners of courtyards and sticking above brick walls.

"There was so much e-waste," Lai said, after another turn down another empty street revealed more and more evidence that informal processing was no longer being done in the town. "Where is it going?"

Puckett, who was one of the first people outside China to find out about Guiyu, said it was "remarkable to finally see" how the area has changed and he was "relieved that the cleanup has finally begun."

'War on Pollution.'

E-waste processing is estimated to have started around 1996 in Guiyu.

High-levels of lead have long been showing up in prenatal blood samples from migrant worker mothers at Guiyu in studies researcher Huo Xia conducted at the nearby Shantou University Medical College. It has been difficult for her, however, to gather blood samples of adult workers since she was usually barred by workshop bosses from collecting this material.

Greenpeace's Lai said he is concerned not enough will be done in subsequent cleanup efforts in Guiyu since heavy metal pollution can be so difficult to eliminate.

"There were lots of hazardous chemicals, and the heavy metals will still be here. They are very difficult to break down," Lai said, adding that vast sums of money are needed to clean that up. "Guiyu is a lesson that a war on pollution that China has now undertaken is best fought through preventing the pollution in the first place."

The big issue now for Puckett, after seeing what has happened in Guiyu, is where the waste might be going, particularly all that imported waste from North America that was showing up here just a few years ago. Early indications are that while some is still making its way to mainland China, more is heading to Hong Kong, Taiwan, Thailand and other areas throughout Asia.

What Now?

While applauding the Chinese actions to "finally enforce their hazardous waste import ban," Puckett said in an official statement from BAN after the visit, that the fear now is "that the externalization of costs and harm will simply continue to new locations as long as countries like the United States allow exports of hazardous wastes with impunity."

Li Pang, a 20-year resident of Guiyu originally from Sichuan and our driver on this day, said about 50 percent of the village's families had abandoned the e-waste trade by August. While some have started to move into the industrial park, others are waiting to see whether commodity prices bounce back to make processing at the park profitable.

Li said companies in Zhejiang Province used to buy about 80 percent of the plastic waste collected in Guiyu to make toys, but that number hads dropped significantly during the past year. Gold, silver, other precious metal and material prices have bottomed out, also contributing to the exodus of families from the business here.

Another factor: All the e-waste we saw at the industrial park was domestic Chinese waste, which Li said processors complained was of lower value because the amounts of precious metals contained were much lower than what was contained in the once large volumes of imported waste.

Out of Sight

While there had been rumors for years that authorities in Guangdong province would push all unregulated e-waste processing in Guiyu to an industrial park built especially for regulated dismantling, it wasn't until the middle of 2015 that this started to become a reality.

Banners throughout Guiyu herald the 1.5 billion yuan ($233 million) industrial park built on former farm fields on the edge of town and urge residents in the informal industry to move in by the end of the year to ply their trade lawfully.

Now in the third of a five-phase process, the park is beginning is starting to take shape. The industrial park is still largely empty, except for an area constructed during the first phase where workers dismantle waste and cook circuit boards over woks like they are used to doing at home. Only this time, emissions are captured by more environmentally friendly smokestacks funded by environmental protection authorities.

Three factors have contributed to the swiftness of the cleanup in Guiyu: a drop in global commodity prices cut the profits from extracting gold, silver and other precious material from e-waste; orders by the Guangdong government that all e-waste processors in the town either move to the new e-waste industrial park by the end of 2015 or face power cuts or criminal prosecution if found still processing outside the park; and China actually cracking down on illegal imports of e-waste from the rest of the world.

'Pollution There Is Worse.'

During the drives around Guiyu we sometimes attracted attention. Just a few years ago attention for journalists meant hired thugs were about to chase you out of town, something that happened when Puckett visited with a crew from the CBS news program 60 Minutes in 2008. One young man followed our car on a motorbike for several minutes, stopping to take our pictures when we stopped to photograph closed workshops.

After talking with him, we discovered that his family was involved in processing---we had a short tour of the ear-shattering shredding of plastic in what looked like a wood chipper---and that many people did not like the industrial park. "I think the pollution there is worse," said the young man, who was barely out of his teens. "It is all in one place."

Even though we were unannounced, officials at the industrial park were obliging enough to give a tour, something that usually does not occur so easily in a China bloated with bureaucracy and where junior-level officials are afraid to sign off on anything not approved by official stamps and endorsements from on high.

Around 22 buildings in the park are completed or nearly completed, with one section of five-story workshops still awaiting. Most of the area was devoid of e-waste processors except for a early-phase section of low-slung buildings.

New Destinations

Walking past you could see workers breaking apart waste and cooking circuit boards in the same way they used to do it in the family workshops in the village. The only change is more, though not all, of the workers wore face masks and emissions flowed up through stacks leading to a central control tower that officials said cleaned most of the harmful materials from the waste gas.

Families now form 49 companies from what once had been 3,000-plus private residential workshops, according to Zheng Jinxiong, deputy director of the industrial park and one of the officials who gave us the tour.

State-run Xinhua news agency also reported that 441 workshops officially closed before the Dec. 1 deadline.

China's Ministry of Environmental Protection has developed a map on its website dedicated to waste electrical and electronic equipment (WEEE) that now shows the number of qualified, licensed e-waste processors in each province.

If the number set up in Chongqing municipality is any indication, much of the domestic waste is bound for the central part of the country, midway up the Yangtze River.

According to the map, 109 companies are licensed to handle e-waste there, while by comparison the figure for Guangdong Province has only seven and the highest for any province is eight in Jiangsu Province.