The iPhone is coming to China -- and so is a lot of technological trash.
BY ADAM MINTER | SEPTEMBER 23, 2009
Before year's end, Apple and China Unicom will finally launch the iPhone in China, leaving hundreds of thousands of affluent Chinese cell-phone users with an increasingly pressing question: What should they do with their old handsets? Sure, some will pass them on to friends and relatives, and others will stash them in drawers. But for those precious few who decide that they'd like to recycle their old cell phones in an environmentally sound manner, they'll be mostly out of luck. Unlike in the United States, Apple doesn't offer to collect and recycle old cell phones for its customers in China. And the Chinese government, which has long decried the developed world's exports of e-waste to its shores, has done almost nothing to handle the growing tide of its own, homegrown e-waste, generated by its expanding middle class. In short, as China grows, consumes, and gets hooked on the iPhone, the environmental disaster that is South China's e-waste processing industry is about to become much worse.
The environmental costs of China's e-waste processing industry were first documented by activists and journalists in the early part of this decade. Then, as now, coverage generally focused on the e-waste "dumped" by the developed world. Those countries often prefer not to take the trouble and expense of processing their high-tech throwaways in an environmentally sound manner, so for decades they have simply shipped the stuff overseas. In documentaries and news stories, South China has been dubbed the West's "digital dump," where toxic chemicals are used to extract metals from old circuit boards with the leftovers tossed into streams.
Yet even as those first stories ran, the business of processing e-waste in South China was changing from one focused on imported waste to one attuned to the burgeoning Chinese middle class and its throwaways. Televisions, refrigerators, and other appliances purchased in the mid-1980s were reaching the end of their life cycles, and China -- which still lacks any environmentally sound e-waste recycling -- allowed them to flow southward into the now largely domestic digital dump.
Nobody really knows just how many computers, cell phones, and monitors the Chinese throw away every year, though estimates abound. Analysts can safely claim that China is second only to the United States in PC units sold (40 million in 2008). As for cell phones, estimates are a bit easier due to the need to purchase actual airtime: This year, China is expected to have more than 650 million cell-phone users, who will purchase in excess of 190 million handsets. China's highly fragmented retail sector, dominated by small vendors with gray-market relationships, also makes it impossible to know how many appliances are in use. In a 2007 speech, Liu Fuzhong, an official with the China Household Electrical Appliances Association, noted that Chinese consumers own 1.5 billion televisions, refrigerators, washing machines, and air-conditioning units (all of which are hazardous, to some degree, to recycle), with 120 million such appliances entering the waste stream each year. I saw what the result looks like in December during my last visit to Guiyu, the most notorious of South China's e-waste villages. Giant piles of cell phones were strewn across the yards of home-based dismantling workshops, from which the smell of acid, used to extract gold, wafted.
This outmoded processing system probably sounds a bit mad if you're among those who have read the increasing tide of studies suggesting that e-waste is a potential profit-making "gold mine." It is a bonanza -- but only if it's done in exactly this primitive, environmentally ruinous way. China's e-waste villages provide South China's burgeoning manufacturers with cheap and plentiful sources of raw materials. So profitable is the trade that, for two decades, local governments and port authorities in Guangdong province have openly flouted Beijing's customs and environmental laws, charging lower-than- mandated duties on other recyclable materials while turning their eyes away as prohibited materials -- such as old computer monitors -- moved through the borders.
Environmentally friendly processing, by contrast, is expensive, highly technical, and time-consuming. The most common method used is shredding, after which the resulting waste is subjected to a gauntlet of magnets, and other, more technologically advanced means of separating plastics and various kinds of metals. In Japan, which enforces some of the world's strictest environmental laws, these technologies are widely utilized, but only because they are heavily subsidized by the Japanese government, which in turn collects fees from consumers and manufacturers. Even in strict Japan, more than one-third of the resulting waste stream is incinerated or landfilled. And Japanese regulators concede that a large volume of the country's e-waste still flows to developing countries like China, Pakistan, and India.
China, of course, is the "beneficiary" of this profitable environmental nightmare, garnering junk from eager dumpers abroad. One notable result is that South China has some of the lowest raw-material costs in China and, hence, the country's e-waste processing industry offers some of the world's highest prices for old computers and cell phones (India is rapidly catching up, though). A few weeks ago when my Dell-manufactured laptop failed, I walked it down to my Shanghai street corner, where an independent scrap vendor offered me the equivalent of $25 for it. The reusable parts would be salvaged, she told me, and the remainder would be shipped south where metals would be extracted, refined, and sold to manufacturers. Dell's Chinese "take back" program, by contrast, offers no dividend to consumers who let the company pick up an old laptop and recycle it in a sound manner. (Dell declined my request for detailed information on who their recycling partner is, saying only that it is subject to a stringent recycling audit). In 2008, Dell's take-back program took back a mere 2,800 PCs; I saw that many Chinese PC cases just driving through the outskirts of Guiyu.
Despite the domestic consumption twist, a recurrent subtext in documentaries about South China's digital dumping grounds still concerns foreign consumers and their responsibility for the pollution their throwaways are yielding. If only Apple's consumers in California would take their old laptops to authorized recycling centers, Guiyu would cease to exist, the argument goes. But if this were a possibility in 1999, it's certainly not one now. Over the last five years, China has launched several environmentally responsible e-waste pilot projects that have failed for -- among other reasons -- their inability to compete for e-waste in China's vast, informal network of processors. Two years ago, in fact, one of these pilot projects became so desperate for e-waste that it actually asked for formal permission to import the junk from abroad (the request was denied). As it happens, due to the global economic crisis and a crackdown on scrap-metal smuggling in South China, the actual volume of imported e-waste in South China has been in decline for nearly a year. And yet, despite that optimistic development, Guiyu is just as busy as ever.
It's a sign of the times: China is simply consuming more and making more of its own trash. The items being processed down south have certainly included some of the handsets replaced by the reported 1.5 million iPhones brought (unofficially) into China over the last two years. Unlike in the United States, where Apple accepts phones for recycling from any manufacturer, in China it only accepts Apple-branded products (and requires its consumers to ship them to, of all places, Hong Kong). They have all but guaranteed that, at some point, millions of Chinese cell phones will contribute to the government-supported disaster in Guiyu as shiny new iPhones fill China's up-and-coming pockets.
Apple did not respond to repeated requests for comment in regard to its e-waste recycling operations in South China. Regardless, Apple, just like Dell, is surely aware that it won't forever be able to continue running an e-waste program that is worth more in PR value than environmental value. Last August, the Chinese government approved guidelines requiring manufacturers to take responsibility for recycling the products they manufacture and sell in China. The details are still being worked out and it will likely be several more years before implementation, but the rules will probably include subsidies to help recyclers compete with the workshop processors and requirements for producers to take additional responsibility for the proper disposal of the products that they manufacture.
In other words, in a few years Apple might just have to clean up the post-party mess from all those iPhones it's about to make a killing on. The hangover might not be so fun.