Chen Liguo’s own specialties are doors, windows, wood boards, and old furniture. When a company or restaurant goes out of business, he purchases all its furniture. Typically a chair can be had for RMB 10-20 if it looks brand new, and he would resell it for RMB 100; furniture that can’t be resold as is, he salvages for timber and sells wholesale to furniture factories – doubling and redoubling his profits. Only pressboard, made of reconstituted sawdust, fetches low returns. A going-out-of-business deal can earn him around RMB 10,000.

According to an insider, the main income sources of big merchants like Chen Liguo are big deals like this and storage sublets. In 2008 he contracted for one such deal – dismantling an old building. He made a profit of over RMB 100,000 from selling the scrap steel bars, pipelines, copper wires, windows and doors.

Chen Liguo said that his yard in Haidian District is comparatively small. The big ones would have at least dozens or often over 100 smaller dealer-tenants. He estimated the market value of scrap collected in Beijing in the billions of yuan and disclosed that quite a number of people had made their fortunes this way. Perhaps 1,000 or 2,000 billionaires started in this trade, and those worth 3-5 million yuan are countless. Even an average copper and lead sub-dealer in his yard possesses a cool one million. “Otherwise he won’t have enough flow cash to support his business,” explains Chen Liguo.

His 20-year-old son Chen Yang is majoring in hotel management at a university in Beijing. The annual tuition is RMB 10,000, plus a monthly living expense of RMB 2,000. Even though this business is profitable, Chen Liguo does not want to leave it as an inheritance to his son. “Scrap collecting sounds vulgar, and the job is tiring and humiliating. No matter how rich you become, still you are looked down upon.” He hopes his son will find a stable and respectable job.

Have Tricycle Will Travel

The over a dozen households in the courtyard are just the middle link of the scrap recycle chain, where scrap is sorted and transported to a higher level of specialized scrap wholesale market, or less often, directly to factories. Before that there are two links: those that pick scraps from garbage and those that go from door to door, riding their flatbed tricycles, calling out for broken, unwanted, unneeded goods.