Chinese Gold Made with American Waste Paper

Chinese dominance of American waste paper recycling negatively impacts American paper mills.


| May/June 2013



Waste Paper

Paper mills in China churn waste paper into containerboard, which packages Chinese-made products—iPhones, to pick a prominent example—whose destination is the United States.

Photo By Su Blackwell

In 1990, a year when the American appetite for industrial resources was fixed in the direction of the Persian Gulf, a woman named Cheung Yan moved from Hong Kong to Los Angeles. Cheung was born in 1957 in northern China. She came to Hong Kong by way of the southern Chinese city of Shenzhen, the country’s first “special economic zone”—an early laboratory in the Chinese capitalist experiment. Cheung worked there as an accountant; after she’d saved some money, she formed a business in Hong Kong, with two partners, to ship waste paper within China. She was encouraged by an older acquaintance who worked at a paper mill in the north. “Waste paper,” he told her, “is a forest.” Cheung would relate that story in profiles in both the New York Times and the New Yorker, published in 2007 and 2009, respectively—not long after that the success of her friend’s advice had turned Cheung into the world’s richest woman.  

China had stripped its actual forests when it industrialized, quickly and violently, during the Great Leap Forward, so the country wasn’t a productive source of the raw materials needed for papermaking. Because of the historical scarcity of wood pulp, paper produced domestically was high in vegetable content—straw, reed, and bagasse, a sugarcane or sorghum by-product—that’s not easily recycled; and anyway, the practice wasn’t widespread in China.

Cheung sought a bigger pond; so, for that matter, did the country at large. As its economy developed, China’s demand for all manner of scrap, paper included, grew. Chinese factories have grown exponentially hungrier for garbage that they can repurpose and put, in some new form, back on the market. Paper mills in China churn waste paper into containerboard, which packages Chinese-made products—iPhones, to pick a prominent example—whose destination is the United States.

The United States was Cheung’s bigger pond: the source of the scrap and the promise of new life for it. Cheung’s move to Los Angeles coincided with the beginning of an economic era pregnant with alchemical symbolism. The U.S. sheds the garbage that China turns to gold for resale, traveling more than 10,000 miles on a round-trip journey back to our retail shelves.

 

Cheung persuaded a Taiwanese former dentist to take the trip overseas with her; she married him when they got here. In California the two formed the company America Chung Nam (America South China), driving up and down the coast of California in search of vendors willing to sell them waste paper, which they’d ship back across the Pacific. America Chung Nam grew so vigorously that by 2001 it was the largest exporter of freight, by volume, in the United States. By then Cheung had moved back to China and founded Nine Dragons Paper, which by the 2000s would grow into China’s largest papermaking company. With both a U.S. paper exporter and a Chinese paper importer in her stable, Cheung would be celebrated in the Chinese media in 2006 as the richest person in the country. By 2007 the Times reported that she was “richer than virtually any other woman anywhere in the world,” including, the paper pointed out, Oprah, on whose show Cheung once appeared. Cheung is known in China as the “Queen of Trash.” And her Kingdom of Trash had become the world’s most prominent recycler of waste paper—if not overnight then something close to it. Scrap fills the hulls of China-bound ships that, after making their deposits in the U.S., would otherwise return empty. “These containers have to get back to China,” says Jon Johnson, the manager of Manistique Papers, a mill in Upper Michigan. “They fill ‘em up with scrap metal, scrap paper, hay—anything they can get their hands on.” Rates are so low that it costs less to ship a container of waste paper from Seattle to China than it does to ship it from Seattle to Portland.