Beijing's black market alchemists

Zhao Dapeng has spent the last 11 years illegally soliciting used electronics door-to-door - earning more than he can farming in Henan province and more than Beijing's licensed e-waste recyclers. 

"Broken or just old, be they computers, TVs or cell phones, I scrap them," the 42-year-old says. 

He earns three times more collecting e-waste than he did growing corn and wheat in his hometown, he explains. 

That's even after copper's price plummeted from 60 yuan ($9.44) in 2007 to 25 yuan per kilogram now. 

"I felt the pressure from the slowing global economy even before Beijing hosted the Olympic Games," Zhao says. "The financial crisis has made everything cheaper." 

He pays 300 yuan ($46.40) to 500 yuan per laptop and about 100 yuan per desktop. He gives sellers 5 percent of the market value of a mobile phone. 

During the peak season - just before university graduations, when students are most likely to shed their gadgets - he can buy more than 10 computers and 30 mobile phones a day. 

Winter is bad for business. 

"Sometimes, I come home empty-handed," he says. 

There are more than 170,000 illegal e-waste recyclers like Zhao in the capital, Beijing Municipal Commission of City Administration and Environment engineer Wang Weiping estimates. 

Recyclers prefer to work with black market workshops, Wang explains. 

"They offer higher prices, so they command the top of the industrial chain," he says. 

"That makes them competitive with qualified recycling companies." 

Companies like Beijing Huaxing Environmental Protection Development Co, Ltd - one of two certified e-waste processor in the capital - know this well. 

"We can't even begin to compete with illegal collectors," Huaxing's president Zhang Jun says. 

The government-mandated e-waste disposal plant previously couldn't even bring in enough refrigerators to reach its annual capacity of 2 million. 

But the experimental facility exceeded that by 1.5 million in 2010, thanks to a government home-appliance replacement initiative started in mid-2009. 

The program offers subsidies of 200 yuan to 400 yuan for purchases of five designated products - televisions, computers, air conditioners, refrigerators and washing machines. Buyers swap their old electronics and appliances for new ones. 

Huaxing has signed recycling agreements with such electric appliance supermarkets as Suning and Gome. The plant receives up to 70 percent of its e-waste from these stores. 

More than 80 percent of these retailers' used appliances previously went to illegal dealers. 

However, Huaxing operates eight assembly lines for refrigerators, air conditioners, TVs and desktops. And it can't dispose of laptops. 

But the number of e-waste units in the capital exceeds 8 million a year and has continued growing at an average of 5.2 percent for several years, government figures show. 

Part of Huaxing's dilemma is the Beijing Resource Recycling Association has set e-waste purchasing prices lower than what illegal collectors pay. 

So, the certified plant offers 30 yuan for a desktop and requires sellers to call and make an appointment for pickup, while Zhao goes knocking on doors buying all kinds of e-waste for three times the money. 

Zhao agrees the industry needs a new legal foundation. 

He chose his trade after settling in Beijing without skills, outside of agriculture. 

"E-waste recycling has a very low barrier for entry and provides flexible hours," he says. 

At dusk, he returns to Beijing's Houbajia village, where nearly two-thirds of 360 households deal in illegal e-waste. The guts of used gizmos are heaped outside of the settlement's houses. 

His wife sifts through parts for usable components in the 20-square-meter room he rents for 200 yuan a month. 

Functioning pieces are used to assemble "secondhand" computers sold in the capital's Zhongguancun electronics market. The rest will be shipped outside of Beijing to be melted and mined for valuable metals. 

When the couple has enough to fill a truck, they hire one to take the e-waste to Changping district's Dongxiaokou village - an e-waste storage destination that is the second link in the industry's commodity chain. 

Zhao refuses to reveal the next stop or his buyers. 

"Some e-waste dealers in Guangdong province's Shantou city rent big storehouses and send the materials to (Shantou's) Guiyu town," he says. 

He reveals circuit boards usually sell for 30 yuan a kilogram in Beijing but become worth 50 yuan once they reach Guangdong. 

"Our buyers, though, are secret," he says. 

"Dealers are competitive. So we don't reveal our purchasers or prices." 

Lead levels in children linked to rise in e-waste profits

Huo Xia says parents suspected she was trying to sell their children's blood or do government research that would shut down their illegal e-waste processing businesses. 

So it took a lot of explaining for the Shantou University medical college cytological analysis professor to convince parents in Guangdong province's Guiyu town to let their children's blood lead levels (BLLs) be tested. 

The results showed 88 percent of the 167 children - all younger than 6 - tested had lead poisoning in 2010. 

That's a surge compared to the 16 percent rate among the 227 children tested in 2009. She can't fully explain the jump. 

But the researcher suspects the decrease to 16 percent from 81.8 percent in 2004 was due to the global recession, lowered copper prices and the consequent decrease in e-waste processing. 

Huo has analyzed the BLLs of about 1,000 children in the under-6 age group in Guiyu since 2004. 

Her first tests of 226 children that year found BLLs of at least 13 micrograms of lead per deciliter of blood. 

The World Health Organization calls 10 micrograms, "cause for serious concern", and adds, "There is no safe level". 

Huo says one 5-year-old boy with a BLL of 15 micrograms appeared pale and had a wrinkled face. 

"His parents said his deformity began at age 2, and the local hospital couldn't do anything about it," she says. 

Most of the children with high BLLs also have attention deficit and behavioral problems, Huo says. 

The main reason for high BLLs among Guiyu's children is e-waste's lead dust, which floats in invisible clouds about a meter above the ground - that is, around the same height as children's noses and mouths. 

"Also, parents who are exposed to lead in the workplace can pass it on to children through the dust on their clothes," Huo says. 

Most of Guiyu's parents encounter the heavy metal daily at their e-waste processing jobs. 

So, Huo and her assistants traveled door-to-door to explain the dangers of lead poisoning and her research's value in 2005. 

She also persuaded local kindergartens to organize blood draws. 

"The parents can't do anything about the diseases they have. So, I asked them, 'Do you earn your living at the risk of your children's lives?'" she recalls. 

It worked. The families agreed to allow their children to be tested. 

"The pollution problems and their health implications will depend on the market," Huo says. 

"When the e-waste products' prices rise, so too will the health costs." 

Notes from the underground

The suspicious man has been following me all day. But he seems torn between his fears that I'm an undercover reporter and of missing a business opportunity. I, in turn, am juggling fears of what he'll do if he figures out my true identity and of missing the chance to witness firsthand the lives of workers in the illegal e-waste processing that dominates Guangdong province's Guiyu town. 

"You don't look like a dealer," he says. "You look like a journalist." 

I swallow my anxiety when he asks, "How many circuit boards did you say you have?" 

I offer him a cigarette. That surprises and relaxes him. 

"Why not check out our storehouse to see if you want to stash your stuff there?" he offers, residual skepticism still audible in his voice. 

The business slump might be driving him to take more risks. 

Everyone in Guiyu seems to be complaining about the drop in international copper prices following the global recession that's corroding e-waste recycling's profitability. 

"It's hard to run the business these days," says the man, whom I learn is named Li He. 

A ton of copper sold for about 80,000 yuan ($12,368) before 2008's economic downturn but now goes for just 50,000 yuan. About 60 kg of copper can be extracted from a ton of circuit boards. 

"The collectors we buy from haven't dropped their prices," Li says. "That chews into our profits." 

Li ushers me into a 30-square-meter e-waste processing workshop, where a dozen women are hunched over, dipping circuit boards into coal stoves. 

The sulfuric stench bites my eyes. 

"We keep the iron front gate half open," migrant worker Huang Yan explains, as she deposits a blistering circuit board into the flames. 

"It lets some of the fumes out and keeps most of the journalists' cameras out. We're more afraid of the media than the smoke." 

I gulp as I recall coverage of two foreign reporters beaten by about 30 hired goons, who stole their secretly filmed video in Guiyu in March 2006. 

I decide to keep my camera in my bag - for now, at least. 

I perch on a stool next to Huang to see the process. 

But while I've infiltrated the shrouds of secrecy protecting the trade, I can't see through the tears shielding my eyes from its noxious emissions. 

"How can you stand it?" I ask. 

"You can't at first," Huang says. "But you get used to it." 

About 15 minutes later, Li steps out to take a call. 

I have just enough time to steal a photo of the women's backs. 

Soon after, I leave the workshop and step out into the otherworldly cityscape that is Guiyu's Beiling village. 

Residents tell me virtually everybody who lives here migrated from elsewhere to find work, while the natives have moved elsewhere to escape the pollution but occasionally stop in to check on their e-waste businesses. 

At 1 pm every day, the otherwise quiet streets rumble with hundreds of motorcycles ridden by e-waste workers. Soon after, the pair of pipes that jut from virtually every building start burping soot. 

Guiyu's position as the country's e-waste processing base comes from its history of frequent flooding. Starting in the 1950s, inhabitants of this coastal city discovered scavenging for recyclables - from feathers to broken glass - after the frequent inundations to be profitable. 

This tradition made Guiyu a natural place to dismantle the shipments of e-waste sent from Western countries after China's reform and opening-up in the 1980s. A growing abundance of domestically collected gizmos followed. 

I think about this history during the hour and a half taxi ride along dirt roads to my hotel. 

A convoy of container trucks loaded with what I suspect to be toxic plastic shards passes by. 

"They're probably heading for the toy companies," the driver says. 

I hope he's wrong. 

A magic pill for e-waste's ills?

Pan Songlai claims the VCD he sells online for 580 yuan ($91) is worth far more than its weight in gold. 

The retailer in Zhejiang province's Shaoxing city says his 80-minute video shows advanced nontoxic methods for extracting gold and silver from e-waste that enable industry workers to spend 2,000 yuan on a reagent to earn 20,000 yuan before taxes from a ton of e-waste. It also provides water treatment instructions. 

"The VCD is worth the money," he insists. "It's a nontoxic, cheap and simple process that's ideal for small workshops." 

Most e-waste recyclers rely on the heavily polluting "cyanide method", which poisons water systems, according to the Shandong Province Experimental Institute of Geological Sciences. 

Pan says the technique he has promoted through the VCD's sales since 2006 reveals hydrometallurgical recovery technology that enables the leaching of gold and silver from e-waste as a substitute to the deadly sodium cyanide method. 

He claims it recovers 97 percent of gold and 94 percent of silver within 120 minutes. But most people who call about the VCD don't buy it," he says. 

Pan demands advance payment and provides no after-sales service. 

He says he sells fewer than 10 discs a month, most of which are shipped to Guangdong, Jiangsu and Fujian provinces. 

E-waste processors exposed to sodium cyanide can suffer serious health problems, especially respiratory damage. 

But the institute says the leaching method Pan markets could be a money-maker and lifesaver. 

Time will tell if the technique is merely fools' gold or not.