China’s New Five-Year Plan for the Circular Economy: An 8 Trillion Yuan Market and Green Transition by 2030

With the approval of the Chinese State Council, the National Development and Reform Commission (NDRC) officially adopted and published the “15th Five-Year Plan for the Development of a Circular Economy” in July 2026. This comprehensive new government strategy aims to increase the production value of the country’s resource recycling industry to 8 trillion yuan by 2030. The document also places a strong emphasis on the safe management of waste from green transition industries, known as the “New Three” (power batteries, wind, and solar equipment). According to the commission’s official briefing, this new package of measures is essential for strengthening national resource security and successfully achieving the carbon dioxide emission peaking target.

The Macroeconomic Background of the “15th Five-Year Plan” and the Current Market Situation

The development of the circular economy is one of the most prominent strategic elements of China’s economic and social model transformation. According to the official report, China has recently achieved significant results in efficient resource utilization at both the industrial and policy levels, especially since the 18th Party Congress. Based on official data, by 2025, the country’s primary resource productivity rate increased by approximately 77 percent compared to the 2012 baseline. During this period, both energy and water consumption relative to the Gross Domestic Product (GDP) decreased significantly.

Looking at quantitative data, the comprehensive utilization rate of bulk solid waste now exceeds 60 percent, and the annual recovered volume of key renewable resources has surpassed 410 million tons. The performance of the metal industry is particularly telling: secondary raw materials now account for a significant portion of the raw material supply in production processes. Scrap steel represents a 27 percent supply share, while scrap non-ferrous metals account for 30 percent. The current total annual production value of the resource recycling industry has reached 5 trillion yuan, maintaining a stable average annual growth rate of around 10 percent.

Although the achievements to date are substantial, securing raw material supplies is becoming increasingly critical due to profound changes in the current global governance system and complex international market struggles surrounding the green transition. The “15th Five-Year Plan” (covering the 2026–2030 period) is crucial for high-quality economic development and achieving climate goals, as the sector still faces certain challenges. According to the official assessment, resource productivity remains low in some sectors, waste recovery channels are obstructed, key technological processes await breakthroughs, and the industrial layout is not sufficiently optimized.

Ambitious Quantitative Targets for 2030 and the 2035 Outlook

The new strategy sets highly specific, quantified, and trackable goals for the upcoming period. According to official guidelines, the extraction and utilization rate of primary resources must be increased by approximately 16 percent by 2030 compared to the 2025 level.

In parallel, the annual comprehensive utilization target for bulk solid waste has been set at approximately 4.5 billion tons. The annual recycling volume of major renewable resources must reach 510 million tons. As a result of all these efforts, the total economic output of the resource recycling sector is expected to grow to 8 trillion yuan by 2030. According to long-term objectives, a high-quality circular economy system must be basically established in China by 2035, where the utilization efficiency of major resources fully reaches advanced international standards.

The Three Main Pillars of the Strategy and Key Industry Focus Areas

In terms of content, the 15th Five-Year Plan is built upon the traditional systemic concepts of “reduction, resource utilization, and reuse.” The strategy planners applied a problem-oriented approach that simultaneously aims to remove current obstacles in recovery networks and vigorously promote the industrial upgrading of the circular economy.

Alongside improving legal frameworks, optimizing standard and certification systems, and strengthening comprehensive policy support, the document designates three specific focus areas to resolve bottlenecks:

1. Capacity building for bulk solid waste: A primary goal is to broaden the secondary utilization channels for coal gangue, fly ash, mining tailings, and construction debris, thereby expanding the scale of resource utilization and enhancing the resource attribute of solid waste.

2. High-value exploitation of traditional “urban mining”: This pillar includes accelerating standardized recovery and precision dismantling of end-of-life vehicles, waste electrical and electronic equipment, scrap steel, non-ferrous metals, plastics, and textile waste to improve high-value utilization levels.

3. Developing the waste recovery system for the “New Three”: Addressing prominent current issues, the plan introduces targeted solutions for the responsible recycling of used power batteries, decommissioned wind power equipment, and aging photovoltaic devices by improving scrapping management, clarifying disposal responsibilities, and building a reliable recovery network.

Innovations in Development: Expanding Imports and Consolidating “Small, Scattered, Weak” Enterprises

The NDRC official emphasized that the newly published plan represents a milestone by perfecting the full-chain resource recycling policy measures. First, it strengthens the security of raw material supply from production and green consumption through recovery to utilization. In addition to increasing domestic supply, China is paying special attention to optimizing import mechanisms by improving management processes, expanding imported categories, and strengthening the standardized utilization of overseas renewable resources.

The second substantial innovation is the systemic elimination of shortcomings related to specific key waste types through the three special columns mentioned above.

The third step is the structural modernization of the entire sector. Learning from over twenty years of circular economy development, policymakers identified issues such as insufficient incentives for using recycled materials, imperfect market mechanisms, low-level industry competition, and weak information supervision capabilities. The new guidelines aim to optimize industrial layout, accelerate technological improvements, and cultivate backbone enterprises to change the “small, scattered, and weak” landscape of the resource recycling industry.

Practical Steps for Implementation and the Role of State Coordination

To ensure the smooth implementation of the plan, the NDRC announced that it requires local governments at all levels to fulfill their primary responsibilities, refine target tasks, and ensure policies take effect. Furthermore, the authorities will implement a dynamic monitoring and evaluation system to track the fulfillment of the plan. The government also intends to conduct widespread social campaigns to encourage green consumption and strengthen international cooperation in the circular economy to foster a positive atmosphere for participation across society.

Reference to the official source: https://www.ndrc.gov.cn/xxgk/jd/jd/202607/t20260703_1406254.html