Chinese companies that recycle discarded homeappliances and electronic goods have been experiencing greatdifficulties since the nation's "cash for clunkers" program expiredat the end of last year, reports the Southern Weekly. About three years ago, many companies actively responded to agovernment policy allowing residents of both rural and urban areasto enjoy a 10 percent subsidy if they traded in their oldappliances for new ones. The plan was designed to address theincreasing number of outdated appliances in need of recycling. However, since then no system has been established to support homeappliance recycling companies, and with the expiration of thepolicy, some have even been forced to close their businesses. From one million to zero On April 27, 2012, a recycling factory called Huaxin Green SpringEnvironmental Protection Development Co., Ltd (HuaxinEnvironmental) had been quiet for nearly a month and its processinglines, which previously had operated at full capacity, only startedup occasionally, according to the Southern Weekly. Wang Jianming, general manager of Huaxin Environmental, worriesabout the future of the company, which has finished recycling allthe discarded home appliances in stock and has nothing else to do. Three years ago, the company doubled its number of processing lineworkers and increased its annual recycling capacity from 200,000home appliances to 1.2 million in an effort to seize thedevelopment opportunity before the launch of the government'strade-in scheme, reveals Wang. The company had a stable supply of more than one million randomappliances between late 2009 and 2011, which proved that previousefforts were quite necessary, yet all of a sudden the supplydropped to zero, Wang says. Under normal circumstances a government policy should havecontinuity, but now many recycling companies can hardly make endsmeet, notes Wu Jianzhang, a person in charge of a recycling companyunder Sichuan Changhong Electronics Group Corp. Wan Chunhui, an official at the China Household Electric AppliancesAssociation, says there are currently 105 registered dismantlingenterprises for home appliances in China, but most of them arestruggling to survive. Some have even shifted their dominantbusinesses to other fields. New hope? According to statistics from the National Development and ReformCommission, the top economic planner, the quantity of China'sdiscarded home appliances has risen about 20 percent annually inrecent years. It is expected that more than 160 million homeappliances will be discarded every year by the end of the 12th FiveYear Plan (2011-2015). So if the recycling companies shut down, where will all thoseappliances go? According to an insider, during the period the trade-in policy wasin place, sales departments transferred discarded home appliancesto recycling companies, who would then distribute them to variousdismantling enterprises. But now that many recycling companies have shut down, a largeproportion of the appliances inevitably go to small dismantlingworkshops that are not equipped with qualified recyclingtechnology, according to China Environment News. This is a very serious problem, because it means that tens ofmillions of old appliances cannot be handled properly, which leadsto a waste of materials and increased pollution. Yet there is also good news. Last week it was confirmed that afifth version of a draft detailing the establishment of amanagement fund for the home appliance recycling industry had beensent to the State Council. It's like "a bottle of oxygen" when you are about to choke, saysYuan Jie, marketing manager of Huaxin Environmental, who hopes thefund will provide momentum for the recycling industry. War for funds Although the fund has created new hope for recyclers anddismantling enterprises, they still face much pressure since mosthome appliance enterprises are unwilling to contribute much to thefund, says the Southern Weekly. There have been a number of battles over the issue of funding,according an insider, who says that the collection standard for atelevision set was reduced from 15 yuan (US$2.4) to 14 yuan(US$2.2) and later to 13 yuan (US$2) under pressure from homeappliance companies, but the latest information puts the figure at20 yuan (US$3.2). Xu Dongsheng, deputy secretary-general of the China HouseholdElectric Appliances Association, says the introduction of the fundwill affect the profit margins of the whole home applianceindustry. Under such conditions, some home appliance enterprises will try tostep into the dismantling business to lower costs, but the Ministryof Environmental Protection may not approve, because thecombination of production, selling and recycling will arousesuspicion, he adds. In China, a small dismantling workshop offers 50 to 100 yuan(US$7.9 to US$15.9) to a customer for a discarded television. Butin Japan, such a customer must pay the recycling and dismantlingfees in order to discard a television; otherwise, he or she willface fines. The government should attach greater importance to the problem androll out more regulations, as the existing Environmental PollutionPrevention and Control Law of Solid Wastes are not sufficient. 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