China’s mountains of municipal and industrial sludge and lack of rural wastewater treatment sparked Xi Jinping to declare wastewater a major part of his “war on pollution” in 2018. However, treating wastewater and sludge can be an expensive battle to wage. To advance its wastewater and carbon reduction targets, China can learn from cities such as New York, Washington DC, and Singapore to tap three marketable resources from sludge to close the loop on wastewater. Specifically, Chinese wastewater plants can: (1) capture methane to generate low-carbon power, (2) treat sludge digestate to make compost, and (3) recycle the wastewater to meet multiple municipal and industrial water needs. All three bring down the costs of wastewater and sludge treatment as methane can power wastewater treatment plants and the digestate and recycled water can be sold.