Remanufacturing, a form of product recovery widely used in the vehicle, engineering machinery and machine tool sector, may feature prominently in China's drive to build an environmentally friendly economy, sources at a forum held on Friday in Shanghai said.

The average growth rate of the world's remanufacturing industry is 10 percent per annum, and the industry will be worth $250 billion annually, statistics released by the International Remanufacturing Summit showed.

Although remanufacturing is still in its infancy in China, its development potential is vast, said Xu Binshi, an academic with the Chinese Academy of Engineering, adding that cost-effective remanufacturing is more environmentally friendly than traditional manufacturing.

It's expected that the remanufacturing industry in Shanghai's Lingang area, part of it belongs to the newly established pilot free trade zone, will generate 5 billion yuan ($820.5 million) worth of output by 2015.

"The remanufacturing development could be a starting point for Lingang's manufacturing business," said Yuan Qinghai, vice-chief engineer with Shanghai Municipal Commission of Economy and Informatization.

A remanufactured machine should match the same customer expectations as new machines. Remanufactured products can save up to 50 percent of costs, 60 percent of energy, 70 percent of raw materials, and reduce 80 percent of emissions.

As a key part of the recycling economy, remanufacturing can streamline the production process, boost utilization of materials, cut industrial pollution and create more investment opportunities, analysts said.

Up to 70 percent of pollution in the country comes from manufacturing.

Currently, total output value of the global remanufacturing industry has exceeded $140 billion.

In comparison, the value of domestic remanufacturing was merely 2.5 billion yuan in 2010, and is estimated to reach 50 billion yuan by 2015.