Fueled by escalating paper and cardboard demand, China's recovered paper production has seen rapid growth in recent years. Consumption jumped from 7.6 million tons in 1994 to 71 million tons in 2011, China Paper Association figures show.

Asian countries, especially fiber-short countries like China and India, will remain heavily dependent on recovered paper and account for a large share of the demand growth in the future, predicts Hannah Zhao, a Resource Information Systems Inc. economist on recovered paper.

In 2011, China used 56.6 million tons of recycled fiber-based pulp, accounting for 62 percent of the total pulp consumption in China. About 38 percent of the recovered paper was recycled domestically.

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Niu Qingming, vice-president of China Paper Association, believes China should regard the recovered paper sector as part of its efforts to build a resource-conserving, environment-friendly society, and carry out more favorable policies to support it.

"Recycled paper has been vital in sustaining our paper industry and society," Niu says.

Recovered paper has become the main raw material of China's paper-making industry. In 2010, two thirds of the top 30 paper enterprises in China utilized recovered paper to produce paper, according to Niu.

Despite the fast growth, China's recovered paper industry is still at a preliminary stage, says Jiang Xingsan, president of China Resource Recycling Association.

Although China recovered 43.5 million tons of waste paper domestically in 2011, the recovery rate was only about 45 percent, compared to the world average level of 57 percent.

Experts believe the current recycling system needs improvement to enhance the recovery rate and quality of recovered paper, and to respond to China's growing demand. The small-sized recyclers usually have limited recycling and sorting facilities, and a poor storage environment.

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"Most individual recyclers are lacking in professional training and some even infiltrate impurities on purpose for short-term profits," says Zhang Zengguo, a paper maker for over 20 years in Shandong province.

He says the problems have resulted in Chinese paper makers' preference for imported recycled paper.

A more advanced and integrated recycling network system, with large-scale professional recycling companies, such as Suzhou Baina Recycling Resources in Jiangsu province, will improve domestic recovered paper's quality, recycling and utilizing rates, says Feng Yan, an economist on waste paper.

"Such integrated recycling companies have trained employees, better sorting equipment and storage conditions, and can collect waste paper in large amount according to paper mills' quality requirement," Feng says.

As for the current recycling system, Zhang suggests that the government should carry out incentive policies like subsidies and tax reduction for waste collectors and training programs for individual recyclers on paper's classification.