Might be China is just tired of buying waste. Yes, waste, not "recyclables". Even if plastic and paper were clean and perfectly sorted by type, you still couldn't really recycle them like you can recycle metals and glass. It's always downcycling.
Another reason is that China wants its domestic recycling (meaning curbside collection) industry to develop. While the processing industry can get cheaper input through importing, it lessens the interest in collecting domestic sources, generating more pollution or waste for the landfills.
