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Viewing cable 09CHENGDU132, SW CHINA: CHENGDU RECYCLES THANKS TO MIGRANT ENTREPRENEURS

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Reference ID Created Released Classification Origin
09CHENGDU132 2009-07-24 06:31 2011-08-23 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Chengdu
VZCZCXRO5282
RR RUEHGH RUEHVC
DE RUEHCN #0132/01 2050631
ZNR UUUUU ZZH
R 240631Z JUL 09
FM AMCONSUL CHENGDU
TO RUEHC/SECSTATE WASHDC 3307
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEAEPA/EPA WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHCN/AMCONSUL CHENGDU 3982
UNCLAS SECTION 01 OF 03 CHENGDU 000132 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/CM 
 
E.O. 12958: N/A 
TAGS: SENV ECON SOCI CH
SUBJECT: SW CHINA: CHENGDU RECYCLES THANKS TO MIGRANT ENTREPRENEURS 
 
CHENGDU 00000132  001.2 OF 003 
 
 
1. (U) This cable contains sensitive but unclassified 
information - not for distribution on the Internet. 
 
 
 
2. (SBU) Summary:  Migrant worker entrepreneurs help Chengdu 
recycle by providing multiple filters for the city's waste, 
keeping recyclable material of all kinds out of landfills. 
Laborers, entrepreneurs, and businesses have put together a vast 
recycling network without government involvement or direction. 
Although prices for some recyclable goods have fallen by 50 
percent over the past year, the competitive labor market and the 
one million-strong migrant work force in Chengdu means there is 
no shortage of workers willing to do the dirty jobs needed for 
Chengdu to recycle part of its waste stream.  End Summary. 
 
 
 
Entrepreneurial Drive: The Backbone of Urban Recycling Efforts 
 
--------------------------------------------- ----------------- 
 
 
 
3. (SBU) Across Chengdu's broad metropolitan area, 
entrepreneurial activity drives a remarkably effective recycling 
program.  Merchants recognize the monetary value of recyclable 
material and serve as the primary collectors of material.  A 
medium-sized Chengdu restaurant might receive 100 RMB (15 USD) 
or more by recycling the glass, newspaper, and cardboard 
accumulated over a few days.  The restaurateurs need only to set 
aside the recyclable goods and wait for one of the collectors to 
arrive.  Recycling collectors, who serve as intermediaries, pay 
cash on-the-spot for collected materials. 
 
 
 
4. (SBU) Many hundreds, if not thousands, of men and women 
across the metropolitan area make a living as intermediary 
collectors.  This small army of individual businessmen typically 
traverses the city on three-wheeled bicycle carts designed to 
haul heavy loads.  After buying a full load of recyclable 
material from one or more merchants, the collectors then haul 
the goods to recycling points located primarily on the perimeter 
of downtown Chengdu along the third ring road.  These, small 
recycling centers buy the materials at market prices, and resell 
them to factories that will convert the paper, plastic, glass or 
other material into new products. 
 
 
 
Declining Prices and Thin Margins 
 
--------------------------------- 
 
 
 
5. (SBU) The network of individual entrepreneurs, who are the 
backbone of the recycling industry, tell us that prices for all 
materials have declined over the past year.  One collector 
attributed the decline in prices to the global economic crisis, 
while others have cited competition or the May 2008 earthquake 
as reasons for the decline in prices.  The manager of a 
recycling center north of the city-center said that before the 
earthquake he could sell cardboard for 10 cents per jin (1 jin = 
1.1 pounds).  As of mid-July, he can sell the same weight for 
only 3 cents.  A collector in downtown Chengdu mentioned the 
same trend.  He said that cardboard prices had fallen from 7-9 
cents per jin to about 3 cents.  Scrap iron and steel prices 
have fallen 40 percent while plastic and glass has fallen by 
about 50 percent, according to the same recycling center manager. 
 
 
 
6. (SBU) A second manager attributed the drop in prices to 
competition among recycling centers and price consciousness by 
sellers.  She said that a few years ago, people did not think 
scrap iron had much value.  Now, however, sellers coming to her 
recycling center know the market price and try to haggle for a 
better one.  Despite the seemingly tough economics of the 
recycling industry, the manager, from a town 60 miles outside of 
Chengdu, started her business one year ago.  Most of the people 
who collect materials or run recycling centers are migrant 
workers. 
 
 
 
Opportunity and Poverty Spurring Recycling 
 
CHENGDU 00000132  002.2 OF 003 
 
 
 
------------------------------------------ 
 
 
 
7. (SBU) One million migrant workers live in Chengdu.  This 
abundant supply of laborers eking out a living has increased the 
amount of recycled material.  Some migrant laborers pick through 
the city's landfill, hoping to earn money by collecting any 
discarded recyclable material.  Other migrant laborers, such as 
the second manager mentioned above, start their own small 
recycling businesses.  A Consulate staff member commented that 
recycling is seen by many as a dirty, undesirable job.  This 
creates opportunities for migrant laborers to enter the 
business.  The first recycling center manager said that he 
earned 1,000 RMB per month (146 USD) and received free rent for 
his work, although he does not own the business.  (Note:  This 
is a competitive wage in Chengdu.  A young or relatively 
inexperienced maid or nanny in Chengdu might receive the same 
base salary, but receive no lodging.) 
 
 
 
8. (SBU) The more impoverished migrants and other city residents 
also contribute to the recycling effort out of necessity.  At 
the lowest end of the economic spectrum, it is common to see men 
and women around Chengdu sifting though garbage containers for 
anything that is either usable or recyclable.  Potentially 
recyclable items are also plucked from the general waste 
collection, which is often stored in small cement rooms attached 
to buildings or housing complexes. 
 
 
 
 Government Advocates Recycling, Aids Effort 
 
-------------------------------------------- 
 
 
 
9. (SBU) Chengdu's government is broadly supportive of recycling 
efforts in the city, and even announced late last year that it 
plans to establish community-based recycling centers.  The city 
government set a goal of building 200 recycling centers by 2013. 
 Each of the recycling centers under the plan would be 160-430 
square feet, according to a Deputy Secretary of Chengdu's 
Commerce Bureau.  These small centers-which would be located in 
communities with one center per 1500-2000 households-would be 
about the size of the current, private recycling centers now 
located outside the third ring road.  The city also has placed 
recycling bins, painted green, across large sections of 
downtown.  These largely replace rather than supplement trash 
cans, but appear to do little on their own to encourage 
recycling. 
 
 
 
10. (SBU) The city concentrates its effort on waste collection 
and removal rather than recycling, but low wages drive city 
garbage workers supplement their income through recycling. 
Workers fan out across the city at all hours of the day and 
night, sweeping up trash from sidewalks and gutters, cleaning 
roads, and emptying trash bins.  These workers also transport 
garbage from cement-block garbage collection rooms to waste 
collection points outside the city center.  Despite long hours, 
they earn only about 700 RMB (102 USD) per month, according to a 
recent local press report.  Congenoff commonly sees city 
sanitation workers sifting through the garbage for recyclable 
items they can sell to supplement their income.  The city is 
seeking to discourage workers at waste transfer stations from 
sorting through garbage, however, since this practice leads to 
foul smells that cause local residents to complain to the city 
government. 
 
 
 
Profile of Recycling Entrepreneurs 
 
---------------------------------- 
 
 
 
11. (SBU) The recycling business in Chengdu is operated by men 
and women alike.  The workers Congenoff has met appear to range 
in age from about 35-55, although some more elderly residents 
and city workers also search through the garbage for 
recyclables.  The first recycling center owner mentioned in this 
cable appeared to be in his 50s.  He said that he was originally 
 
CHENGDU 00000132  003.2 OF 003 
 
 
from a town north of Chengdu, near Luo Dai.  He had worked at 
the recycling center for six years, and was unconcerned that the 
house he lived in at the recycling center had large cracks 
running through the walls, saying it held up just fine during 
the earthquake.  The second recycling center manager also lived 
at her workplace, a cement-block room of roughly 500 square 
feet.  She said she was from Jianyang, a town southwest of 
Chengdu.  She was able to enroll her fifth grade daughter in a 
private school in Chengdu, which she said cost about the same 
amount as the "free" public schools that nonetheless charge 
parents a number of miscellaneous fees.  She would not say how 
much money she makes. 
COWHIG