As the world’s largest producer, consumer, and exporter of textiles, China is responsible for a staggering quantity of textile waste. Every year, Chinese families throw away approximately 26 million tons of clothing, and the nation’s accumulation of textile waste amounts to nearly 100 million tons. Less than 1 percent of this is reused — not nearly enough to deal with the enormous amount of existing waste and the speed at which it grows. In addition, China lags far behind Western nations such as the United States, where the textile reutilization rate is around 15 percent.

Coincidentally, many textile companies in China are facing a dire lack of raw materials. This problem could, at least in part, be resolved by reusing thrown-out clothing. Therefore, increasing the rate at which old textile goods are reused and recycled is a matter of great significance to both China’s environment and its economy.

Since 2011, China’s textile recycling industry has boomed, and vast amounts of capital have been invested in this burgeoning field. The rapid expansion of the industry, combined with a lack of standardization, means that company business models vary considerably, as do the motives and ethics of their owners. For example, several companies and organizations have appeared on the market claiming to donate old clothes to areas in need. While they act under the guise of charities, they actually use the old clothes for commercial purposes without donor consent — for instance, by exporting them to Africa for sale.

Chinese people have traditionally donated old clothes to charities or to poverty-stricken areas, but at present, charities don’t have a great demand for old clothing: Due to the high cost of collecting, cleaning, and storing clothing donations, it is often more economical for people to buy new garments instead of secondhand ones. That’s why reducing textile waste requires the intervention of benefit corporations that specialize in environmental initiatives and textile reutilization.

Due to past scandals concerning the illicit profits and corruption of supposedly philanthropic organizations, many Chinese now oppose charities’ involvement in for-profit initiatives. Therefore, certain companies attempt to earn the public’s trust by falsely claiming that they will donate any old materials they receive. But if their disingenuous ways come to light, they end up further undermining the public’s already-wobbly trust in benefit corporations.

This phenomenon reflects a common misconception in China surrounding organizations that pursue public benefit: that they must be entirely nonprofit. If the public catches even the faintest whiff of a moneymaking mentality, they quickly lose trust in the organization. However, even in Western countries, companies that seek to recover and recycle used textiles must operate at a profit if they are to overcome the exorbitant costs of their day-to-day operations, such as logistics and storage. What China’s recycling companies must do is maintain transparency — namely, by candidly informing the public of the necessity of these initiatives as well as allowing themselves to be closely monitored.

In the United States, textile reuse and recycling companies mainly process recovered fabrics in three ways. First, they sell the highest-quality pieces — about 10 to 20 percent of all recovered fabrics — at local thrift stores. Then, they give approximately 40 percent to intermediaries that repackage the textiles and export them as secondhand goods. Finally, the remaining 40 percent or so goes to factories that create new products from the fibers.

By selling recovered fabrics instead of purely donating them, such American companies do not seek to make a profit for themselves; rather, they merely wish to overcome the costs involved in collecting and recycling old textiles. Ultimately, their for-profit activities contribute to increasing the reuse of resources.

In contrast, the commercial operation of Chinese textile recyclers is significantly less successful. Charities or for-profit corporations that are truly dedicated to benefiting society are held back by the overwhelming costs of logistics and general operation, leading to the extremely low rate of textile reutilization in China.

Not long ago, I visited a small Shanghai-based recycling company called Feimayi — or “Flying Ants” — whose business model is based on that of American recyclers. The company ensures its sustainability through for-profit initiatives while simultaneously aiming to benefit society.

The organization tells consumers in precise terms that, while it donates some of the recovered clothes to areas in need, it uses the remainder for commercial purposes. Although the company exports some of the clothing to Africa, it does so not for personal gain but rather as a means of earning back its operating costs. Feimayi recycles 100 tons of textile waste annually.

Although textile recyclers like Feimayi are not charities in the true sense of the word, they are trailblazers in terms of the solution they provide for recycling old fabrics in China. As far as China’s textile recovery industry is concerned, operating as a for-profit business is hardly an ethical dilemma. On the contrary, so long as revenue is used to cover the costs involved in recycling and processing old clothing — and this revenue serves to promote the reutilization of textile waste in China — then we should, to an extent, condone such commercial activities. Rather than blindly opposing for-profit activities, we should instead direct our efforts toward increasing the industry’s transparency and regulation.

Haunted by scandals and corruption, China’s charities and public benefit companies need to pull out all the stops to regain the public’s trust. Chinese people should accept the idea that for-profit initiatives are necessary for these organizations, but the companies in question must prove their innocence first.

Translator: Lewis Wright; editors: Lu Hua and Matthew Walsh.

(Header image: A shop owner sorts through secondhand clothing donations for homeless people in Kunming, Yunnan province, May 12, 2015. Xie Rui/VCG)