After years of success with his paper mills, Lin Xingyue suddenly found he could no longer land a new project anywhere in China this year, not even in the underdeveloped western region.

"Papermaking projects are unwelcome nowadays because they consume too much water and are highly polluting," said Lin, a shrewd businessman from Wenzhou, a manufacturing powerhouse in the eastern Zhejiang Province.

According to Lin, nearly all Chinese localities have boosted their recycling-based economies in the last two or three years with eco-friendly industrial parks, where polluting projects with high input and low yield are almost always unwelcome.

In fact, the government and businesses in China have taken concrete actions to foster a recycling-based economy with clean production and the ISO14000 environmental management system.

China's top lawmaking body, the Standing Committee of the National People's Congress, plans to enact a law to promote a recycling-based economy. A draft of the law will hopefully be ready for deliberation in 2007.

Experts say a recycling-based economy which features more efficient energy consumption, lower emissions and higher returns, will ensure fast economic and social development with the lowest possible costs and least damage to the environment.

The Yellow River Industrial and Trading Group in north China's Inner Mongolia Autonomous Region is one of the early birds. The company has reported an annual increase of 40 million yuan (US$4.9 million) in economic returns by recycling industrial waste.

The company produces coke with refined coal, makes iron and steel with coke and turns waste into slag concrete. It also generates electricity with waste rocks and gas, and the remaining heat can keep residential houses warm in winter. Concrete is made out of solid wastes, and chemicals emitted at coke refinery foster the chemical industry.

"A circular economy will lead China's new round of economic growth now that the traditional growth mode runs counter to the country's endeavors for sustainable development and building of harmonious society," said Zhu Zhaoliang, an agrologist and academician with the Chinese Academy of Sciences.

The country's traditional economy is based on the linear, one-way flow of resources, products, consumption and wastes. The traditional growth pattern, though having fostered more than two decades of sustained economic development, has brought about growing pains including energy shortages, high consumption of resources and pollution.

China's overall energy efficiency stands at 33 percent, about 10 percent lower than the world average, but its energy cost for per unit GDP is three times the world average, said Qu Geping, a senior environment official.

The Chinese government is working to quadruple its 2000 gross domestic product while only doubling its energy consumption by 2020.

"In fact, it was the Chinese who fostered a circular economy in the first place," said Wang Rusong, a researcher with the Chinese Academy of Sciences. "China's 7,000-year-old agriculture, for example, is recycling-based."

In traditional agircultural society, peasant farmers made full use of all resources and turned manure and hogwash into quality fertilizer, he said. "The cattle, poultry, fish, silkworms, rainworms, marsh gas, cropland, pond, wood and villages made a harmonious ecosystem and the country was able to feed a quarter ofthe world's population with merely seven percent of its total arable land and water resources."

To build a present-day type of recycling-based economy, China aims to set up a comprehensive legal, appraisal and technological innovation system by 2010, said Jiang Weixin, vice minister of National Development and Reform Commission.

By then, China will increase energy efficiency by reducing energy consumption per unit GDP by 17 percent from the 2003 level,ensure 70 percent of solid industrial waste is recycled and contain the growth rate of urban household garbage to within five percent, he said.

(Xinhua News Agency November 30, 2005)