ACN's success came with the burgeoning Chinese paper-makers' reliance on imported scrap paper.

Since its beginnings in the 1990s, China's paper-making industry is growing faster than any other in the world with an output of 49.5 million tons in 2004, while 54.4 million tons of paper was consumed, both figures ranking the world's second highest.

However, domestic supplies are insufficient, as only 30 percent of China's scrap paper is recycled each year, compared with 70 percent in the United States.

Forced to buy foreign scrap, China imported 12 million tons of waste paper in 2005, nearly half of the world's waste paper available for export.

"With more advanced awareness of environmental protection, the United States, Japan and European countries have formed standard waste paper recycling systems," said Zhang Yin, explaining the geographical advantages of the ACN.

"Paper-making can't do without environmental protection," said Zhang. "That's the motto of the Nine Dragons Paper, which puts an average of two to three percent of each project's investment into preventing pollution and monitors its waste water discharges 24 hours a day."

Nine Dragons Paper was set up in Guangdong in 1995, when the Chinese market was dominated by imported wrapping paper.

"Foresight is the key," said Zhang. "While most domestic producers were using machines with a production capacity of less than 50,000 tons, our first machine had a capacity of 200,000 tons. We have higher goals."

Zhang's vision paid off after 10 years of efforts. By the end of 2005, the Nine Dragons had become China's largest container board maker and one of the world's largest in terms of production capacity, according to a report by the Resource Information Systems Inc., a major information body for the paper and timber industry.

In March, Nine Dragons went public in Hong Kong, with its share price jumping nearly 40 percent on the first trading day.liuxuepaper.com