Categorized | happenings

California’s number two export to China is . . .

Scrap metal heap
We still make trash better than anyone else on the planet.

Trash.

Clusterstock reports that California is the number one exporter to China with, natch, computers and tech leading the charge at $3.3 billion, but with good old plain American garbage as a close second at a whopping $2.3 billion. California, as we all know, is America’s trendsetter, but garbage is only America’s fifth biggest export to China — total garbage exports to China climbed to $7.6 billion last year — up from $6.7 billion in 2006, when it was the nation’s number two export to China.

So what does China do with all this trash?

Well, they recycle all that trash and make all the stuff we buy back from them. And it has made many people in China (and here) very wealthy. In fact, the richest woman in the world as well as the richest person in the PRC, Zhang Yin, made her entire fortune off of California trash. A manager at a Guangdong factory, Zhang scraped together the equivalent of $3,000 and started her scrap recycling business.

Back then, China imported about 350,000 metric tons of scrap paper from the U.S. — this year, that number topped 10 million metric tons. Over 60% of the U.S. scrap paper and cardboard is marched onto container ships and floated over to China.

The trash business is unbelievably lucrative for Chinese entrepreneurs, in part because they have genuine resource constraints, such as wood pulp for paper and oil for plastics, but mainly because shipping stuff from the U.S. (or Europe) to China is dirt cheap, because all those ships that come to American ports full of Chinese goods return to China practically empty.

The big Chinese market for trash is good news for American entrepreneurs, as well, and not just in trash entrepreneurs. The Chinese appetite for scrap paper was worth almost $2 billion for American trash entrepreneurs last year (that, my friends, is a might big business considering that most of that demand is being met by small businesses). Keep this in mind next time you visit a recycling center: somewhere between 50% and 80% — on the higher end if you live in California — of all that trash you see lying about the recycling center is destined for China (and will show up later in something you buy at Target). China is literally keeping that recycling center in business.

On the other hand, this is good news for green manufacturers. As someone who has assisted in the startup of half a dozen green manufacturers, the biggest headache and most aggravating constraint is the price of recycled materials. Going green, particularly when dealing with plastics, can mean adding a two-fold to four-fold premium to your product. The “recycled premium” has sunk more business ideas than you can possibly count.

It is literally cheaper — I’m not kidding — to use certain recycled materials from China. From a truly environmental perspective, however, shipping trash halfway around the world to be recycled and remanufactured and then shipping it back as a finished product seems a bit more savage-the-planet than the save-the-planet. It does, however, provide opportunities for green business ideas that weren’t available ten years ago.

So take a good, hearty swig from that water bottle and bid it a bon voyage to exotic, Eastern ports-of-call as you toss it into the recycling bin!

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