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UPDATED: April 11, 2008 NO.4 JAN.24, 2008
Out of the Bag
Restricting the use of plastic shopping bags is China's latest step to curb pollution

"According to practices in other countries, a ban on free shopping bags could cut the consumption of these plastic bags at least by half," said Ma Zhanfeng, Secretary General of the China Plastics Processing Industry Association.

Well-prepared retailers

As a joint venture warehouse supermarket chain founded by three Chinese companies and Holland-based SHV Holdings, Makro China has expanded to seven outlets in Beijing and Tianjin after 10 years' operation. Since its first outlet opened for business in November 1997, Makro has stuck to a policy of no free shopping bag to its customers. To pack their purchases, patrons of Makro have to bring their own bags or buy degradable plastic bags of two sizes at 0.3 yuan ($0.04) and 1 yuan ($0.14) per bag.

"We sell these bags at their cost prices rather than making money out of them," said Yang Xiaohong, Vice Manager of Makro China. "We just want to encourage our customers to reduce their daily plastic bag use and our loyal customers have got used to it." She explained the initiative of the policy was mainly influenced by the Dutch co-founder of the company. To illustrate on the policy's obvious effect on reducing plastic bag use, Yang quoted that on average Makro China now sells one plastic bag out of around every 30 purchases.

However, as a pioneering retailer in educating customers' environmental consciousness, Makro has to face an unfavorably skewed competition landscape when other chain supermarkets are packing customers' goods in intricate classifications into multiple free plastic bags to show their hospitality. Yang told Beijing Review that Makro's two new outlets in Beijing opened in the second half of 2007 have launched a promotion campaign to provide free plastic bags to customers. "Customers are so used to shopping in other supermarkets with free packing bags that adapting to our style took a little time," said Yang. She said the promotion season will stop after the Spring Festival that falls in February, far ahead of the government deadline of June 1.

Compared with Makro, French supermarket giant Carrefour, with over 100 outlets in 40 Chinese cities, has been less daring in pushing customers into the age of paid plastic bags. Although Carrefour China started to promote the use of a 4.9-yuan ($0.68) cloth shopping bag that can be repeatedly used as early as 2004, results have been mixed with both successes and failures.

One strategy adopted by Carrefour is to open "green" payment channels for customers willing to pay for cloth shopping bags. After a period of time, many Carrefour outlets were forced to remove these channels when the majority of customers preferred waiting in long queues in other payment channels for free plastic bags to paying to go through "green" channels.

However, Spokesman of Carrefour China Chen Bo told Beijing Review that new promotion tricks to encourage the use of cloth shopping bags implemented since November 2007 have been successful. The new incentives for using cloth shopping bags include discounted prices for cloth bags at 2 yuan ($0.28) and deducting 1 yuan ($0.14) from a pay bill if the customer carries away the merchandise with his or her own Carrefour cloth bag. Over 80,000 cloth bags were sold during a 10-day nationwide promotion campaign in November 2007.

However, vendors at millions of outdoor markets across the country, who usually wrap everything for customers in cheap ultra-thin plastic bags, are making preparations of a different sort. According to a report in a daily newspaper in the coastal city of Qingdao, Shandong Province, plastic bag wholesalers at the city's outdoor markets have received larger than usual bills since the circulation of the ban on plastic bags. The wholesale buyers of these cheap plastic bags, like steamed bun vendors, are competing to stock as many plastic bags before the production of the ultra-thin plastic bags is eliminated in June. They are afraid of running out of plastic bags when their next-door competitors can still provide customers with courtesy bags.

New direction for the industry

"China's restriction has balanced economic growth with environmental protection," said Ma of the China Plastics Processing Industry Association. He admits that the impact on the plastics industry is profound since "the majority of plastic shopping bags used now fall into the category of banned ultra-thin bags."

Ma said the National Development and Reform Commission had solicited suggestions from his association on the content of the circular, especially on the thickness of prohibited plastic bags. Ma then surveyed related member enterprises of his association. "Of course nobody is happy since production would be cut down," he said.

Yet Ma said the flip side of the new policy is that it would spur the development of the degradable plastics industry in China. The ban on plastic bags doesn't apply to those made of degradable material.

Ma said Chinese plastics companies are producing two types of degradable plastics. While biodegradable plastics, which can degrade into carbon dioxide and water without residues, cost twice to three times the price of ordinary plastics, other types of plastics with totally degradable plastic additives, such as calcium carbonate and starch, are made at an equal cost to non-degradable plastics. But according to Ma, for the time being consumer goods retailers still prefer using non-degradable plastic bags since degradable plastic bags are less durable.

Ma said although the degradable plastics industry is still nascent in China, it has been developing very fast in recent years. The annual production of biodegradable and degradable plastics was around 30,000 tons in 2007. Ma expects that figure to grow to 100,000 tons by 2010.

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