Research for the Helbling toilet, which is ready for sale, has been funded by the Microsoft boss’s foundation.
Gates, 63, said: “The current toilet simply sends the waste away in the water, whereas these toilets don’t have the sewer.
“They take both the liquids and solids and do chemical work on it, including burning it in most cases.”
Speaking in Beijing, he said: “In the way that a personal computer is sort of self-contained, not a gigantic thing, we can do this chemical processing at the household level.”
Poor sanitation kills half a million children under the age of five annually and costs the globe more than £100billion a year in health costs and lost income, says the foundation.
Gates has committed £150million to the toilet project and expects to spend the same amount again before the toilets are ready for wide-scale distribution.
It is the first time Gates’ Foundation has addressed an event in China, where President Xi Jinping is promoting a three-year “toilet revolution” to build or upgrade 64,000 public toilets by 2020, to help boost tourism and economic growth.
Gates said the next step for the project is to pitch the concept to manufacturers, saying he expects the market for the toilets to be £4.5billion by 2030.
He said more than half of the world’s population suffers without clean, comfortable sanitation facilities.
“When you think of things that are basic right up there with health and enough to eat, you think that having a reasonable toilet belongs on that list,” he said.
Gates was in Beijing for the Reinvented Toilet Expo, a forum hosted by the Bill & Melinda Gates Foundation to promote the cutting edge of sanitation technology in place of sewers.