The Chinese Plastic Market And International Trade:a Cost Benefit Analysis

The Chinese economic boom of the latest30years caused a massive increase in the demand for plastic in the country. The need for plastic materials pushed the improvement of plastic production process. However, the dimension of this phenomenon has been such that domestic production often failed to meet the growing demand and China was forced to turn to imports as well. This is true not only for the production of primary resin but for plastic waste, too. The import of plastic waste has become indispensable for the sustainment of the domestic industry but it also raised many issues. The main one is that international waste trade is often saw as a simple way for the exporting country to get rid of their waste disposal problems at the expenses of the importing country, which, if not equipped with the necessary recycling infrastructure, faces health hazards and a worsening effect in its own waste collection and disposal apparatus. On the other hand, in the case of countries like China, the need for raw materials, in this case plastic, forces to accept the compromise. In order to avoid waste import China should either undergo an extensive improvement of the primary production sector that would necessitate huge investments or an amelioration of the domestic recycling capabilities through improvement of the recycling facilities and simultaneous education of the population on the matter. The question is which is the ideal path and what are the main advantages and disadvantages of the various solutions.In light of its current development stage and industrial capabilities, China would be better off increasing its reliance on the more cost efficient secondary resin. The additional material would ideally be supplied by a double system of waste imports and improved domestic recovery rate and recollection. The total costs of the plastic cycle in China can be reduced significantly by increasing the capacity of the domestic recycling industry. Although the additional recycling capacity is mainly met by imported waste plastics, the overall import costs will be reduced, since the increase in imports of waste plastics will mainly replace relatively expensive imported final goods or primary resin. Second, the overall costs could be reduced even further if the recovery sector could be improved and expanded.