This chapter presents the development of the urban waste management system with the parallel transformation of the informal recycling sector in Beijing since marketization in the late 1970s. We illustrate the distressing challenge of waste as it is gradually exposed to urban governance in China. The municipality’s efforts to remake the waste/recycling space into an “urban circular economic system” was depicted to highlight the context for the cities zero waste city initiatives. The implication points out the limits of problem definition in waste management, which focuses on the environment and resources, but excludes the migrant scavengers from the local citizenry regardless their efforts for inclusion by the city. This limitation of the definition of the problem leads to conflicting values on waste and recycling between various stakeholders who are involved when the system needs to be upgraded. The collaborations at the community level for making the new business model provide the opportunity for building an inclusive space for recycling activities in cities in China.