As the franchise mode of municipal solid waste disposal industry (MSWDI) was institutionalized in China, MSWDI has developed rapidly. Based on the analysis of industry policy, investment, capacity building and treatment technology, the development process of MSWDI in China was divided into five stages. During the identification of the five stages, the roles of pre-subsidy and post-subsidy in the development of the MSWDI were analyzed. Compared to the pre-subsidy which is used for the fixed assets construction, the post-subsidy which is used for the purchase of services and recycled products played a more important role. The post-subsidy mechanism is the direct driving force for the rapid development of MSWDI.Except the MSWDI, kitchen waste and construction waste disposal industries are the major vein industries in Chinese cities, but lag behind. The post-subsidy mechanism should be applied to speed up the development of kitchen waste and construction waste disposal industries. The sale system of recycled products from kitchen waste, such as biodiesel and methane gas, should be established, and the reusing of construction waste recycled products in construction and production should be subsidized.
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