A generation of changes can happen in the span of just nine months in China’s tech powerhouses. It’s the same development that is creating a huge problem for generations ahead; electrical waste.
China’s electrical waste problem is a serious one. China dumped 6 million tonnes of e-waste in 2014, the second largest number in the world following the U.S., while it only collected only 1.3 million tonnes of equipment for recycling in 2013.
Most e-waste in China is produced by home appliances. The country report on China’s e-waste in 2011 shows that the five major products include TVs, refrigerators, washing machines, air conditioners and computers (desktop and laptop). As China has shown a sharp increase in mobile phone sales in recent years, it has become another main e-waste source.
Since 2011, the ecosystem has changed, and there are a slew of new devices that could significantly worsen China’s e-waste issues.
Based in Hong Kong, Li Tong Group (LTG) specializes in reverse supply chain management (RSCM) services for the leading technology and telecom companies in the world including Amazon, Apple and Huawei, according to TechNode’s research. When a used device is delivered to one of LTG’s global engineer-staffed facilities, it goes through screening, testing, and multiple device inspections to determine any problems of functionality. After data sanitization, the product can then be sold as a re-manufactured device. If OEMs are not interested in selling these devices, LTG can disassemble the parts and charge the OEMs for components which can then in turn be reused in other applications.
One of the biggest new industries putting pressure on the e-waste sector is the Internet of Things (IoT). As new inventions flood the market, the focus is on fast adoption and less about sustainability. IoT is difficult to efficiently recycle, because modern electronics are replete with a wide variety of heavy metals and rare-earth metals, as well as toxic synthetic chemicals.
“Startups are all about figuring out how to build the product, and don’t worry about what happens after they create it,” stated Linda Li, current Chief Strategy Officer of Li Tong Group.
LTG claims that they currently provide recycling and post-customer services to startups based in Silicon Valley and Shenzhen. “Startups have to face a whole set of different problems in the reverse supply chain (RSC) side that big OEMs already solved years ago,” Li notes. “We have infrastructure globally and can provide the same quality of service regardless of the size of the company.”
The move to cloud computing has also brought environmental concerns. Many organizations that struggle with big data issues internally are now switching their IT systems to cloud-based services. The same goes for telecom companies struggling with shorter lifetimes of electronic equipment. The transition from 2G to 3G data networks took five years, the shift to LTE networks is noticeably faster.
“In the next ten or five years, there will be 100 million or more servers replaced by cloud computing,” Li stated. Contracted by the Hong Kong government, LTG handles all used IT equipment and computers that public institutions such as banks, hospitals and schools need to decommission and replace.
To their credit, larger OEMs are playing a more active role in recycling their old devices, offering new services and programs to their customers. Microsoft’s Hong Kong teamed up with LTG to offer an online electronic product trade-in service in May. The program incentivizes consumers by activating the e-coupon in exchange for used products. Once the product’s condition is verified, an e-coupon is emailed to the consumer for use toward any purchase at Microsoft’s online store. “More OEMs are now considering to offer similar incentive programs for consumers,” Li said.
In China, there is no obligatory regulation when it comes to recycling used devices, whereas in other markets such as Europe, OEMs must provide recycling programs that correspond to their operations in the region. For example, EU targets 4kg of Waste Electrical and Electronic Equipment (WEEE) collection per capita, representing about 2 million tonnes per year.
Chinese OEMs like Xiaomi, Huawei and Lenovo’s have grown their international market share so much that they have started facing OEM regulations overseas. “Currently, our factories are located in south of China. We are servicing international OEMs, and now we want to provide our sophisticated service to Chinese OEMs as well,” said Li.
According to Li, there is a challenge in educating the market, as LTG’s global operations could be misconceived by many professionals. “We do recruitment campaigns, but it’s hard to hire good people, since there are many that think of this business as merely recycling and garbage disposal.”
While the US’s e-waste production has increased by 13 percent over the past five years, China’s has nearly doubled. It’s expected that China will overtake the dubious honor of being the number one global e-waste dumper by 2017.
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