The circular economy is rapidly becoming a vital engine for global sustainability. As nations tackle resource constraints, climate change, and shifting industrial landscapes, boosting resource efficiency and reshaping production and consumption models have moved to the top of the global agenda.
In China, circular economy development is evolving towards a more systemic and integrated approach.
With State Council approval, the National Development and Reform Commission (NDRC) recently released the 15th Five-Year Plan for Circular Economy Development (the Plan) which outlines China’s core priorities and policy measures for advancing its circular economy over the next five years.
Following the release of the Plan, the Foundation’s China team shares insights from leading Chinese circular economy experts to explore the key trends shaping China’s circular economy transition. The article highlights how circularity is increasingly extending beyond resource recycling toward systemic changes in design, industry, materials, and economic development.
The Plan sets ambitious targets to reshape China's resource efficiency by 2030:
Experts interviewed by NDRC emphasise that during the 15th Five-Year Period, the strategic, industrial, and ecological value of the circular economycircular economyA systems solution framework that tackles global challenges like climate change, biodiversity loss, waste, and pollution. It is based on three principles, driven by design: eliminate waste and pollution, circulate products and materials (at their highest value), and regenerate nature. will become increasingly prominent.
Moving well beyond resource and material efficiency, the circular economy is now positioned as a core mechanism to:
Strengthen national resource security
Support China’s carbon peaking and carbon neutrality targets
Improve environmental quality across regions
Foster long-term, green economic growth
Looking at the specific tasks within the Plan, a clear shift is underway: China is moving away from focusing on end-of-life recycling towards a systemic transition which encompasses product design, manufacturing, consumption, recycling, and industrial upgrading.
Exploring emerging trends
Drawing on insights from leading Chinese circular economy experts, this article explores the emerging trends driving this transition. These shifts reveal not only how China’s circular economy policies are evolving, but also how circular models are taking on a far more central role in industrial transformation and green development.
Resource recovery and recycling have long been the backbone of China’s circular economy. As the sector matures, the strategic focus is shifting from waste management to an upstream priority: how to reduce resource consumption and maximise product value.
The Plan identifies “Building a stronger foundation for waste prevention and resource efficiency” as a top priority calling for three core actions:
Promoting green product design
Advancing cleaner production in key industries
Accelerating green consumption across society
This signals a fundamental shift: China's circular economy strategy is no longer just about managing waste, but involves systemic, lifecycle-based design.
Experts highlight that the Plan grounds resource reduction across three interconnected dimensions:
Expanding Extended Producer Responsibility (EPR)
The Plan also calls for a deeper rollout of the Extended Producer Responsibility (EPR) system signaling a major evolution in how corporate responsibility is defined.
Experts emphasise that this expands producer duties far beyond basic end-of-life collection and disposal. Instead, it pushes accountability upstream towards green product design and the increased use of recycled materials.
This direction aligns consistently with the global trends in circular economy development. A true circular economy goes beyond merely increasing recycling rates to redesign systems that keep products and materials in use, while preserving their highest value for as long as possible.
For businesses, this means future competitiveness will depend not only on manufacturing capabilities, but also on their ability to integrate circular principles into product design, supply chain management, material selection, and lifecycle management.
Secondary materials driving industrial transformation
Another important signal from the Plan is that China’s circular economy is moving beyond basic waste resource utilisation towards a broader model of material circularity.
To support this shift, the Plan provides dedicated policy measures to increase secondary material utilisation by:
expanding their industrial application
improving evaluation standards
strengthening full-process digital traceability
promoting wider adoption across relevant industries
To accelerate large-scale market adoption, the Plan also suggests exploring the inclusion of products made with secondary materials in government and public institution green procurement programmes.
Experts note that these policy measures for secondary material applications mark a critical advancement in resource recycling. More importantly, they establish a systemic framework to drive the adoption of secondary materials across China.
The future of China’s circular economy hinges on moving beyond basic collection and recycling to actively expand secondary material applications across major industries.
Truly closing the loop from recycling to production requires seamless integration into core value chains, including automotive, consumer electronics, household products, chemicals, and construction sectors.
For businesses, incorporating secondary materials is rapidly evolving from an environmental responsibility effort into a strategic imperative for supply chain resilience and innovation.
In the future, material selection, supply chain transparency, and end-to-end product lifecycle management will stand out as essential to every enterprise's green transformation roadmap.
Circular economy as an enabler of green economic growth
The plan also demonstrates that the circular economy is expanding beyond traditional resource and environmental management to become a vital driver of industrial innovation and economic development.
To support this growth, the Plan sets key targets to:
Notably, the Plan also introduces several first-of-their-kind management measures to guide long-term structure:
Capacity Distribution Assessments: Conducting comprehensive evaluations of resource recycling projects
Early Warning Mechanisms: Establishing proactive controls to prevent inefficient capacity expansion
Capacity Planning and Management: Strengthening oversight to align development with strategic needs.
Together, these measures reflect the sector’s transition towards a more mature development model. By prioritising industrial structure, quality improvement, and overall efficiency, they will help foster more standardised and professional resource recycling.
The Plan actively encourages the growth of dedicated circular economy solution providers and promotes the integration of manufacturing and services.
This indicated that future market opportunities will extend beyond traditional recycling companies to include technology providers, digital management platforms, consulting services, and integrated circular solutions.
Ultimately, the circular economy is evolving from a mere compliance requirement into a strategic opportunity for businesses. By embracing this shift, enterprises can improve resource efficiency, build innovative business models, and strengthen long-term competitiveness.
Building circular systems for emerging green Industries
As renewable energyrenewable energyEnergy derived from resources that are not depleted on timescales relevant to the economy, i.e. not geological timescales. and the digital economy rapidly expand, the circular economy is facing new challenges and areas of opportunities.
The Plan highlights the growing need to establish recycling systems for waste streams generated by emerging green industries. It explicitly targets decommissioned electric vehicle (EV) batteries, retired wind power equipment, end-of-life photovoltaic (PV) modules, and waste from digital infrastructure, calling for robust collection, full traceability, and efficient recycling networks.
Industry experts emphasise that these targeted measures reflect China’s proactive strategy to establish comprehensive lifecycle management early on. By addressing these high-growth waste streams today, the Plan tackles the crucial "last mile" of green industrial development.
Electric vehicle (EV) batteries offer a prime example of this imperative. The rapid expansion of the new energy vehicle sector has created growing demand for structured end-of-life battery management.
To meet this challenge, the Plan calls for reinforcing producer responsibility for battery and EV manufacturers. It focuses on three key areas:
Sharpening product traceability
Building collection networks
Advancing recycling technologies
Together, these aim to create a complete lifecycle system—from production and use to retirement and resource recovery.
A similar imperative applies to wind and solar power. As renewable capacity continues to expand, standardising the recycling and utilisation of retired equipment becomes critical to sustaining these sectors over the long haul.
Ultimately, this highlights a fundamental truth driving modern economic planning: green industries themselves must be circular. Historically, discussions around renewable energy often focused primarily on reducing environmental impacts during the active use phase. Moving forward, true green development requires greater attention on resource efficiency and environmental impacts across the entire product lifecycle.
The circular economy is becoming a foundational capability that underpins the continued expansion of green industries, while strengtheneing the resilience of broader industrial supply chains.
The circular economy as a key support for resource resilience and supply chain sustainability
The Plan further elevates the strategic role of the circular economy, establishing resource circularity as both an environmental imperative and a vital mechanism for building resource resilience and supply chain stability.
As a major global manufacturing hub and a primary consumer of raw materials, China faces rising global resource demand alongside heightened supply chain volatility. Under these conditions, reinforcing resource security has emerged as an essential priority for sustainable industrial development.
To address this challenge, the Plan outlines two complementary strategies:
Optimising the efficient utilisation, assessment, and management of primary mineral resources.
Unlocking secondary resources through the development of ‘urban mines’.
Experts note that advancing the circular economy by balancing the efficient use of primary materials with secondary supply capacity can enhance resource supply chain resilience. Going forward, true resource security will depend as much on recovering valuable materials from existing products and waste streams as it does on traditional extraction.
Materials such as scrap steel, copper, aluminum, and critical minerals recovered from retired batteries are set to become increasingly vital supply sources. By improving collection systems and sharpening high-value recovery, the circular economy is positioning itself as an essential component of China’s resource security strategy.
This shift reflects the growing strategic significance of the circular economy: beyond delivering environmental benefits, circularity can also contribute to industrial resilience, supply chain sustainability, and long-term economic stability.
Building stronger institutional foundations for circular economy development
Because a circular economy spans interconnected stages, from production, distribution, and consumption, to collection, recycling, and reusereuseThe repeated use of a product or component for its intended purpose without significant modification.—sustainable progress requires more than voluntary market participation. It requires supportive institutions and long-term mechanisms.
To support this multi-stage ecosystem, the Plan strengthens the foundations of China’s circular economy through targeted policy, legal, and regulatory enhancements:
Ultimately, a stronger institutional framework delivers greater regulatory certainty for businesses, enabling circular principles to become deeply embedded across corporate operations, industrial development, and broader social governance.
The Plan deploys a combination of fiscal, tax, and financial instruments to accelerate circular economy development and drive industry upgrading.
It calls for leveraging available fiscal resources across different levels to support eligible resource recycling projects, while using policy guidance to encourage financial institutions to expand investment.
Crucially, it emphasises enforcing existing tax incentives for resource utilisation and applying the reverse invoicing mechanism to ease transaction friction in the recycling sector. Together, these measures create stronger market incentives to modernise the entire industry.
Looking ahead: Supporting China’s circular economy journey
After more than two decades of development, China’s circular economy has evolved from an early stage focused on pilot demonstrations and awareness building into a new phase centered on high-quality development.
Over the next five years, the circular economy will extend far beyond resource recovery and recycling. It will become deeply integrated into industrial transformation, resource resilience strategies, and the cultivation of new green economic drivers. From product design to industrial systems, and from corporate innovation to institutional governance, the circular economy is emerging as a vital force guiding China’s transition toward a greener, more resilient economy.
Achieving this systemic shift will require collaboration across governments, businesses, research institutions, and society.
When aligned, policy support, corporate action, technological innovation, and social participation will collectively drive the circular economy from sector-specific practices into a full-scale economic transformation.
Dedicated to advancing global circular economy dialogue and collaboration, the Ellen MacArthur Foundation will continue working with partners in China and worldwide. By facilitating knowledge exchange, scaling innovative practices, and supporting the continued development of circular economy approaches, we can work together to build a more circular, resilient, and sustainable future.
(This article synthesises insights and perspectives from multiple experts in the field of circular economy regarding China’s Circular Economy Development Plan for the 15th Five-Year Period. The content has been edited, integrated, and refined based on these expert interpretations.)
Reference:
National Development and Reform Commission issues the 15th Five-Year Plan for Circular Economy Development: https://www.ndrc.gov.cn/xxgk/jd/jd/202607/t20260702_1406253.html
One-chart overview | NDRC issues the 15th Five-Year Plan for Circular Economy Development: https://www.ndrc.gov.cn/xxgk/jd/zctj/202607/t20260703_1406235.html
Expert interpretation article No. 1 | Promoting high-quality circular economy development throughout the entire chain during the 15th Five-Year Plan period: https://www.ndrc.gov.cn/xxgk/jd/jd/202607/t20260703_1406238.html
Expert interpretation article No. 2 | Drawing a new blueprint for a circular economy system with Chinese characteristics in the new era: https://www.ndrc.gov.cn/xxgk/jd/jd/202607/t20260703_1406239.html
Expert interpretation article No. 3 | Safeguarding high-quality circular economy development with high-level institutional supply: https://www.ndrc.gov.cn/xxgk/jd/jd/202607/t20260703_1406240.html
Expert interpretation article No. 4 | Vigorously promoting circular economy development to effectively support the implementation of major strategies: https://www.ndrc.gov.cn/xxgk/jd/jd/202607/t20260703_1406242.html
