China's top economic regulator on July 8unveiled a new development plan to spur the circular economy in the next fiveyears, according to the country's top economic regulator.

The plan aims to basically establish aresources recycling system in the country by 2025 as part of efforts to achievecarbon peak and neutrality goals.

The plan's goal is to increase efficiencyof utilization of resources and foster high-quality development during the 14thFive-Year Plan period (2021-25), the National Development and Reform Commission(NRDC) said.

Commenting on the plan, experts said thenew plan is of great significance as it will promote resource conservation andrecycling in China, help ensure national resource security and aid China inhonoring its pledge to peak carbon dioxide emissions by 2030 and become carbonneutral by 2060.

Chinaunveils plan for circular economy's next five years

The Plan also stands to increaseopportunities for companies involved in areas like green tech, wastemanagement, and recycling technology.

Under the plan, the circular economy, amodel focusing on recycling, reusing and repairing raw materials and resources,will be a national priority during the 14th Five-Year Plan period (2021-25).

Circular economy playing a bigger role inensuring resource security, reads the document. By 2025, a resource recyclingindustry system will be basically established and a resource recycling systemcovering the entire society will be basically completed.

By then, resource utilization efficiencywill be substantially improved, and the replacement ratio of renewableresources to primary resources will be further increased.

In particular, major resource productivity,which quantifies the relations between economic activity and the consumption ofmajor material resources, is set to increase by about 20 percent compared with2020.

The plan specifies that the energyconsumption per unit GDP and water consumption per unit GDP will be reduced by13.5 percent and 16 percent respectively, by 2025 from the 2020 levels.

The comprehensive utilization rate of cropstraw will remain above 86 percent, and the comprehensive utilization rate ofboth bulk solid waste and construction waster is set to reach 60 percent.

According to the plan, the use of wastepaper and scrap steel will reach 60 million metric tons and 320 million tons,respectively, and the output of recycled nonferrous metals will hit 20 milliontons by 2025. By then, the resources recycling industry will be worth 5trillion yuan ($773 billion).

The plan also outlines major projects andtasks for developing circular economy in the following five years, includinginnovations in key technologies and equipment, the treatment of plasticpollution, eco-friendly express packaging and the recycling of tractionbatteries.

China has announced its goal of peakingcarbon dioxide emissions by 2030 and achieving carbon neutrality by 2060, withvarious sectors speeding up low-carbon transition.

The NDRC said in the plan document that itwill step up efforts to promote green design of key products, boost cleanproduction in key industries, promote recycling development of parks, improvethe recycling network of waste materials and improve the level of processingand utilization of renewable resources.

More efforts will also be made to promotewell-regulated growth in the second hand market, promote the high-qualitydevelopment of the re-manufacturing industry, build a recycling system forwaste materials, strengthen the recycling of agricultural and forestry wastes,strengthen the recycling and utilization of waste agricultural materials, andimplement a circular agricultural development model.

These will have direct consequences forbusinesses engaged in the manufacturing sector and create new marketopportunities for green enterprises.

China’scircular economy targets for 2025

The Plan contains a number of targets forChina to meet by the end of the 14th Five Year Plan period in 2025.

By then, China should have a fullyimplemented circular production method, widely promoted green technology andproduction, and significantly improved resource utilization.

Further, China should have its circulareconomy be “basically established”, improved its resource recycling system tocover the whole country, and increased the use of renewable resources.

Additionally, the Plan sets a number ofhard numerical targets for the government to reach by 2025. These include:

•       Increasing resourceproductivity by 20 percent compared to 2020 levels.

•       Reducing energyconsumption and water consumption per unit of GDP by 13.5 percent and 16percent, respectively, compared to 2020 levels.

•       Reaching a utilizationrate of 86 percent for crop stalks, 60 percent for bulk solid waste, and 60percent for construction waste.

•       Utilizing 60 milliontons of waste paper and 320 million tons of scrap steel.

•       Producing 20 milliontons of recycled non-ferrous metals.

•       Increasing the outputvalue of the resource recycling industry to RMB 5 trillion (US$773 billion).

Besides the development targets, the Planlists three key tasks to accomplish over the course of the period. These tasksare largely directives for regional governments to interpret and implementaccording to local conditions.

The first task is to build a resourcerecycling industry system and improve resource utilization efficiency.

The second task is to build a recyclingsystem for waste materials and foster a recycling-oriented society.

The third task is to deepen the developmentof the agricultural circular economy and establishing circular agriculturalproduction.

China’ssustainable goals

Circular economy refers to a model focusingon recycling, reusing and reburnishing materials and resources. The new plan willmake circular economy a national priority during 2021-25.

The development of the circular economywill be important for China to clean up the country’s environment, meet itsinternational climate goals, and encourage green innovation.

The circular economy will impact virtuallyall companies doing business in China, but especially manufacturers that useresources for production and create waste.

Xia Guocai, a former official of the NDRC,said: "After years of rapid economic development, the ecological environmenthas previously been severely damaged and polluted, and ecological disasterssuch as land desertification, land salinization, soil erosion and forestresource destruction have seriously threatened the survival and development ofhuman society.

"Against that backdrop, we must adoptthe method of development of a circular economy to transition from the previouscycle of 'resource-product-waste' to a new model of'resource-product-waste-renewable resources'."

In an article published on the NDRC website,Xia said that while China has made considerable progress in boosting economicand social development during the past decades, problems like resource shortageand environmental pollution also popped up as part of the traditionaldevelopment model of mass production, mass consumption and mass wastage.

Yin Zhongshu, an analyst at EverbrightSecurities, said the development of circular economy will help China reducecarbon emissions and strengthen the new dual-circulation development patternthat takes the domestic market as the mainstay while domestic and foreignmarkets complement each other.

"The development of circular economywill help reduce the high-energy consuming processing for raw materials,improve the efficiency of domestic cycle, boost China's standing on the stageof international industrial chain and make China less dependent on foreignscarce raw materials," Yin said in a recent Everbright report.

Looking ahead, Yin said the governmentneeds to take more steps to boost the development of circular economy such asclarifying producers' responsibility for the treatment and disposal ofpost-consumer products.