By Lin Huocan and Liu Cheng

Recently, the 2nd International Cyclic Economy Exposition, whose theme was"new achievements of the cyclic economy; new momentum for green development", was held in Qingdao. Participating enterprises from China and other countries exhibited achievements of the cyclic economy in key industries and fields.

"Junk dealer" going public; huge potential for the remanufacturing industry

In the exhibition, the remanufactured diesel engine exhibited by Sinotruk Jinan Fuqiang Power attracted plenty of attention. It was told that this remanufactured engine was a product that was produced through comprehensive remanufacturing treatment after nondestructive dismantling and cleaning of a used engine. Its quality and performance is the same as a new one.

 "Remanufacturing is an effective remedy to the treatment problem of used engines. Besides, it also possesses huge industrial potential", said Hu Bokang, Chairman of the Board of Fuqiang Power. Hu suggested that the company's business had expanded from mere vehicle engine to more than 30 types of products in 6 major fields. Last year, the company remanufactured 17,000 units of engines, saving energy equivalent to about 7,710 tons of standard coal, saving 10,200 tons of metals, and reducing emission of 9,100 tons of carbon dioxide.

In fact, huge development potential exists not only in remanufacturing, but also in the renewal of such resources as waste steel and waste water.

Experts point out that, with intensifying resource and environment restriction, developing the cyclic economy has become a trend all over the world. The outlined plan of the"12th Five-year Plan" for the first time proposes the target of increasing resource yield rate by 15 percent and clearly points out the missions and measures in developing the cyclic economy in such aspects as improving the renewable resources recycling system, promoting green consumption models, and enhancing policy and technology support. This will bring bigger market space and brighter industrial prospects for the development of China's cyclic economy industry. It is estimated that in 2015 the output of China's cyclic economy industry would exceed RMB 1.5 trillion Yuan.

 "Gutter oil" can be turned into fuel; supporting policy needs to be enhanced

On the exhibition stands of Qingdao Fresh Bio-Energy Technology Development Co., Ltd., the report saw glasses of all sizes that contain some yellow liquid. The reporter was told that all this yellow liquid was biodiesel that was produced from"gutter oil". 

 "The most effective way to deal with 'gutter oil' currently available is to extract biodiesel from it", said Zheng Dehua, managing director of Fresh Bio-Energy. According to Zheng, extracting biodiesel from 'gutter oil' can not only prevent"gutter oil" from going back to the dining table, but also somewhat alleviate the energy pressure. Fresh Bio-Energy has invested in and completed the construction of a production line with a designed production capacity of 100,000 tons. However, part of the production capacity is laid aside because the company can't collect sufficient"gutter oil" to be used as raw material.  

According to Zheng Dehua, in the last two years, people have been highly concerned about the destination of"gutter oil". The government has also tightened regulation on kitchen waste. Only since then has the developing environment for enterprises such as Fresh Bio-Energy begun to improve. Currently, Fresh Bio-energy has established special"gutter oil" collection sites in Dalian, Beijing, and other places. Its raw material supply capability has increases markedly. 

 "The development of the cyclic economy can remain sustainable and energetic only when it is supported by effective policies", said Zheng Dehua, whose hope is that local government would further tighten regulation on kitchen waste and strictly administer the qualification of organizations that collect and treat"gutter oil", so as to provide a favorable developing environment for legitimate recycling enterprises and set "gutter oil" on the correct track.

In the exhibition, the reporter also learned that since 2010 when the added-value tax subsidy policy of"collection before refund" implemented by the Ministry of Finance expired, renewable resources enterprises have been bearing rather high tax because source companies and individuals of the renewable resources industry do not have the qualification to make out invoices and therefore can't offset the income tax. The pressure for survival of these companies has become greater.

Xu Kaihua, Chairperson of the Board of Green Eco-Manufacture, said that the impact of the international financial crisis on the renewable resources industry was far from over, and, to become bigger and more competitive, it was necessary for Chinese renewable energy enterprises to have sufficient energy to conduct technology R&D; in order to do that, the government should give them effective support in terms of tax policy. 

Big investment needed in the early stage of projects; effective finance support needed

In a cyclic economy financing and investment seminar held during the exhibition, Guo Tianye, Party Secretary of Xinjiang Tianye Group, related the development history of the enterprise. He said that Tianye Group was engaged in the R&D and production of water-saving irrigation equipments at the early stage of the company, and it confronted capital bottleneck when the company intended to expand its scale.

 "At that time, water-saving irrigation was still at the initial stage and banks tended to be conservative when assessing the company", said Guo Tianye. After some twists and turns, Tianye Group got its first bank loan of RMB 400 million Yuan in 2002, giving exactly what the company needed when it was anxious to expand its business.

Very soon, Tianye Group made breakthroughs in the field of water-saving irrigation. Continuously supported by financial institutions, Tianye Group has now become an energy-saving and environmental friendly enterprise that spans the two major industries of water-saving irrigation and PVC, with total assets of more than RMB 20 billion Yuan.

The reporter learned that, in order to promote the development of the cyclic economy, the budget of the central government allocates capital to support the cyclic economy every year, with continuously expanding investment scope and volume; besides, reserved funds for the development of the cyclic economy have been established to provide support to remanufacturing, urban minerals treatment, kitchen waste recycling, and other aspects. 

Presently, many medium- and small-sized companies are still having difficulty in financing. According to a participant to the seminar, projects of the cyclic economy require huge investment in the early stage, and it is hardly possible to yield profit in the short term; although some companies may have high profit rate overall, the profit of a single cyclic economy project is very bad, and financial institutions would be highly cautious in the assessing process; it's difficult for companies to gain long-term loan. 

Experts suggest that relevant government departments should promulgate related polices to provide diversifies financial support to cyclic economy projects, guide financial institutions to innovate their service, give full play to the investment and financing, make joint efforts, and promote the sound and rapid development of the cyclic economy.