About 60 percent of the fiber used to manufacture paper and paper board products in China is derived from wastepaper, the report found. In the last decade, China's wastepaper imports increased by more than 500 percent - from 3.1 million metric tons in 1996 to 19.6 million metric tons in 2006 - with most of that growth occurring between 2002 and 2006.

The industry includes one of the country's richest people, Zhang Yin, the founder of the Nine Dragons Paper Co. Her fortune was made from turning recycled paper from America into packaging products.

"China is by far the world's biggest consumer of wastepaper and that's a good thing because in the last four years alone, China has prevented 65 million metric tons of wastepaper from heading to landfills in the US, Japan, and Europe," Brian Stafford, the lead author of the report and an industry consultant, said in a statement. "

Just last year, China's use of wastepaper instead of trees to make paper products probably saved 54 million metric tons of wood from being harvested for pulp."