The naming of Zhang Yin as China's richest woman has encouraged many enterprises to follow her example by engaging in China's uncultivated recycling industry.  France's Veolia Environmental Services, the world's largest environmental services provider, plans to expand its paper and metal recycling business to China, and to strengthen its investment in e-waste recycling activities.  However, low public awareness about recycling, as well as a lack of industry standardization, will present obstacles that environmental service providers like Veolia will have to overcome.

Zhang Yin's Nine Dragons Paper is a recycling company that buys scrap paper from the United States, imports it to China, and turns it primarily into cardboard for use in boxes that are then used to export Chinese goods.  Headquartered in Dongguan, the company is now China's largest paper maker, and raised almost US$500 million from its initial public offering in March of 2006 at the Hong Kong Stock Exchange.  By the end of 2006, the stock had nearly tripled in value. The 2006 Hurun Report naming Zhang Yin as the wealthiest person in China garnered a great deal of public interest for the country's recycling industry.

Compared with the company's businesses in other markets, China's waste recycling is very low-priced, and attractive to Veolia.  At the same time, China offers a rapidly growing market with increasing demands.  "Recycling would become Veolia's pillar industry in China," said Jorge Mora, CEO of Veolia Environment (VE) China.

Since coming to China in the 1980s, Veolia has established representative offices for its four core businesses of water treatment, waste treatment, energy services and transportation.  However, Veolia is well-known only for its water businesses in the country.  Therefore, the company seeks to strengthen its presence and investment in China's waste recycling, energy, and transportation.

"The paper and e-waste recycling industry has a positive outlook.  It is not only environmentally friendly, but can also generate profitability," said Liu Lican of Greenpeace China.  "However, recycling operators also face an important issue--a lack of raw materials.  Since the end of the 20th century, quite a few waste recycling operators have started up in the Yangtze Delta; but shortly after their establishment, they faced the embarrassing failure of not having collected waste for recycling.  The underlying problem is that e-waste collection and recycling are not standardized.  There are still no comprehensive regulations governing the recycling industry.  Most electrical and metal waste is handled by small traders and unqualified underground factories.  This creates adverse environmental effects." 

Veolia, however, may import waste from Europe and process it in China to generate higher profitability. In Europe, the supply of waste outpaces demand for reprocessed products.  The global recycling industry enjoys an annual volume of US$600 billion, with US$110 billion coming from the United States, and US$35 billion from Japan.  In China, on the other hand, US$35 to US$40 billion worth of recyclable resources go unused every year.

According to He Fangming, deputy chairman of the China Resource and Recycling Association, China's recycling industry has long suffered from a lack of consolidation, and weak technology.  The industry ranks last among the country's 600 industries in terms of modernization and industrialization.  There is no professional operation or production, nor comprehensive technical standards; the industry is in desperate need of consolidation.