London Briefing with Chris Johns: The business of waste recycling is as topical in the UK as it is throughout much of Europe. Various government spokesmen and most media commentators constantly berate us for our pathetic performance in the recycling league tables.

Thanks to an outpouring of analysis - which must have consumed several, hopefully renewable, forests - we now know that we still throw away around three-quarters of our rubbish, whereas the recycling champions of the world, the Dutch, send just over 10 per cent of their waste to landfills.

One of the problems is that we have more empty holes in the ground - all those defunct mines - than do other European countries, so it is relatively cheap and easy to bury our waste. The only incentive to recycle has tended to come from moral exhortation rather than the marketplace. But with empty holes becoming scarcer amidst growing pressure to meet EU guidelines, there are some signs of change. It looks like recycling may be looking a more cost-effective option.

The effects of Chinese economic growth have begun to extend to the recycling debate: exports of used plastic and paper to China have exploded over the past couple of years. It seems that the containers that ship all those cheap Chinese manufactured goods are returning to the Orient full of empty plastic bottles and old newspapers.

Chinese demand for used materials is growing rapidly, dragging prices up. It is not just oil and other primary commodity prices that are soaring because of Chinese growth. If anyone is wondering why scrap metal dealing has once again become a vibrant business it is because of China.

Not surprisingly perhaps, the news that China is processing a lot of our waste has attracted headlines like "The UK's new rubbish dump: China". (The Guardian actually used that one a couple of weeks ago.). Anti-globalisation takes many forms, but this is one of the weirdest: the argument is that Chinese lakes and rivers are being polluted by our waste and that Chinese workers are sorting through our rubbish in unhealthy conditions.

The truth is slightly more prosaic and, given that it involves a clear demonstration of the success of market forces, is unlikely to impinge on the consciousness of the sandal wearers. But in case anyone wants some facts, here they are.

Empty containers returning to China mean that transport costs are low. Chinese labour costs are low: sorting rubbish is not terribly skilled work. China can make efficient use of much recycled plastic and paper.

If we were merely dumping waste we would be paying them to take it: but Chinese recyclers are pushing prices up, and are willing to pay far more for plastic and paper than some UK recyclers can afford (those low labour costs again). Once recycled, the stuff is sold on at a higher price - that's Chinese demand for basic materials.

Those higher prices for rubbish mean that local councils now have a much greater incentive to recycle - and there are signs that this is precisely what is happening. Businesses have responded as well. Valpak is a UK trade body that advises around 5,000 companies on how to meet waste management regulations. It recently announced the opening of a new office to assist these efforts: the new branch is in China.

In London, Brent council has introduced a different sort of mechanism to encourage recycling: compulsion. Some residents of the borough could face fines of £1,000 if they fail to fill their green bins. This might be a touch draconian but it is a step along the right road.

While it is extremely difficult - and costly - to administer a "polluter pays" principle at the individual level, it is by no means impossible. Simply charging people by the weight of rubbish they throw out will almost certainly be the way forward. If China keeps on growing, we may end up paying householders for what they put in their recycling bins.