The Green Fence policy has set a limit of 1.5 percent of allowable contaminant in each bale in an effort to keep trash out of China. Previously, some Western companies would illegally send non-recyclable waste materials to China, hiding it by labeling it as recyclable materials.

Headed by Wang Jiwei, vice-president and secretary-general of the China Nonferrous Metals Industry Association Recycling Metal Branch, the initiative conducts random inspections of all forms of "imported waste", meaning metals, plastic, textiles, rubber and recovered paper materials.

"The policy marked the beginning of Chinese authorities making sure whatever recycling material enters China is of good quality. Those companies that weren't offering the right quality of recycling materials had to adjust their processing method to achieve the right quality," Delacoux says.

When the program first started, it hit the Chinese recycling industry very hard, but two years down the line, many firms have adjusted their practices and now the overall quality of materials has improved.

"Due to the Green Fence program, the imported recycling materials are of much better quality. I think the Chinese recycling industry's catching-up phase has passed, and China's recycling industry standards are in line with the rest of the world," he says.

As recycling costs in developed countries continue to grow, increasingly the world's recycling industry is shifting to China. The United Kingdom's exports of waste paper increased from 400,000 tons in 1998 to around 4.7 million tons in 2007, and exports of waste plastics increased from less than 40,000 tons to more than 500,000 in the same period.

More than half of the waste paper and more than 80 percent of the plastic collected by the UK authorities, supermarkets and businesses for recycling are being sent to China, according to a report by WRAP, a private group based in the UK that works with government, companies and individuals on waste reduction.

Much of the waste sent to China is sorted in the UK first in accordance with export regulations. Under current international shipping laws, countries of the Organization for Economic Cooperation and Development can export waste to non-OECD countries only for recycling, not disposal. As mixed waste falls into the "disposal" category, it cannot be exported to countries outside the bloc, as opposed to scrap metals that can be recycled into manufacturing products in countries like China.

China's large waste and recycling market has created great opportunities for Western businesses. Some Western recycling companies are also sharing their innovative importing processes with China, and one of them is the German waste management and recycling company Alba, which started exporting recycled materials to China 20 years ago, including scrap metals, paper and plastic.