Abstract In the recycling chain of construction and demolition waste, it is impossible to guarantee a certain quality of recycled products and to recycle a large amount of materials in recycling centers without mechanical sorting facilities. This counts even more when the produced materials have a low economic value, as is the case with crushed and cleaned debris, also called aggregates. In order to assess if recycling can be done effectively, a feasibility study of the recycling of construction and demolition (C&D) waste is necessary. In the paper, the economic feasibility of recycling facilities for C&D waste in China's Chongqing city was assessed. Investigations on the current situation of C&D waste recycling in Chongqing showed that there were a large quantity of waste and an enormous demand for recycled materials due to the busy ongoing construction activities, which generated a large market potential and also brought a challenge to the strengthening of the recycling sector. However, a full cost calculation and an investment analysis showed that, under current market conditions, operating C&D waste recycling centers in Chongqing might face high investment risks. Thus, the regulations and economic instruments like tax that can support the economic feasibility of recycling are discussed, and the recommendations for the choice of instruments are provided.