China's multi-billion-dollar recycling industry was one of the first casualties of the global recession.

The drop in the price of recycled materials was so sharp that boatloads of scrap shipped from Europe and the US were virtually worthless by the time they reached China. Many Chinese recyclers, who would have preferred to send the scrap back, honored their contracts and lost their shirts.

In towns like Guiyu, made famous by "60 Minutes", and Houbajia, outside Beijing, migrant workers who made small fortunes ripping apart computers and other e-waste were suddenly out of business.

This is not entirely bad news.

The recycling business followed a classic, boom-and-bust trajectory. Each year, China produced 5 million tons of iron and steel, 200,000 tons of non-ferrous metals, 14 million tons of waste paper, and voluminous amounts of glass and plastic available for recycling. Recycled materials helped to augment China's limited resources, but there were not enough materials domestically.

As a result, more than 70 percent of the materials came from abroad, often borne by ships that delivered China's exports and would otherwise have returned empty.

By 2003, China was the world's largest importer of recyclable materials. Last year alone, China imported 11.6 million tons of scrap paper and cardboard from the US, up from 2.1 million tons in 2000.

The human cost was high. Unskilled workers heated circuit boards over coal fires to extract the minerals, or dipped silicon chips in acid baths to remove the protective coating.

Farmers in cities like Dongyang claimed that pollution was causing increased rates of cancer, miscarriages, and deformed births.

And the damage to the environment has been incalculable. Mountains of smoldering e-waste surround the primitive recycling sites, polluting the air and leaching toxic elements into the groundwater.