SPECIAL REPORT from Hong Kong

And, it has revealed that while there is currently no sign of “large quantities” of recyclables being sent to landfill, it would be closely monitoring the situation and was considering providing more sites for the short-term storage of materials.

The comments – which have particular importance for UK company's exporting material to the Far East – were delivered by secretary for the environment, Mr Edward Yau, in the Legislative Council yesterday (November 12) in response to a question by the Hon Frederick Fung Kin-Kee.

Mr Fung reported that the financial “tsunami” had struck a heavy blow to the recycling industry and that some recyclable waste collectors had since ceased operation.

As a result, he asked whether the government had assessed the impact on the sector and what measures it was taking to ensure that recycling activities could continue.

In response, Mr Yau claimed that all trades and industries in Hong Kong had been hit by the global economic downturn and added: “The market prices of major recyclables, like those of other commodities and raw materials, have significantly dropped.

“The market prices of waste paper, scrap iron and waste plastic have plummeted from a peak of about $2,000 [£172], $4,500 [£388] and $1,800 [£155] to the present $700 [£60], $500 [£43] and $800 [£69] per tonne respectively. This has affected the work on waste reduction and the promotion of waste recycling.”

Mr Yau went on to explain that exporters of recovered materials – some of which take in material from the UK and sent it on to mainland China – were not only faced with falling prices, but also a decline in the number of orders and “more harsh terms of orders.”

He added: “Given the exporters' stricter requirements on waste quality amidst the market downturn, there have been recent cases of sub-standard waste being rejected and returned to collectors. Nevertheless, the information we have obtained shows that the export of waste has generally remained normal.”

As a result, Mr Yau explained that Hong Kong's Environmental Protection Department (EDP) was closely monitoring waste disposal at landfills.

He said it would continue to lease short-term tenancy sites exclusively to the recycling trade, as well as maintaining close liaison with the trade to actively study other measures that might alleviate their difficulties, such as providing more short-term storage sites.

He also pointed to an SME loan guarantee system, which would help small firms to improve their cash flow.

He added: “The EDP will continue to closely monitor waste disposal at landfills.”