A large part of this is the new rules on contamination that exclude a lot of material. 0.5% is China's new limit, while a average city with curbside collection could never meet that. Think about your typical recycling bin: You put in some newspaper that is prime recycling material, but then a milk jug or soda bottle that hasn't been fully emptied or rinsed gets tossed in and the paper gets soaked and is now unusable for recycling. Same with pizza boxes that have grease, stuff that gets rained on, people putting stuff in the bins that isn't recyclable in this manner (including electronic components and such [0]), and suddenly you're throwing away (or burning) a huge amount of material.

"China, once the biggest single processor of recycling, said in the spring that it would no longer accept loads of recyclable items — such as plastic, glass, cardboard, and metals — that were more than 0.5 percent contaminated. Officials said they were trying to cut down on pollution from processing dirty recyclables.

Philadelphia’s contamination rate is anywhere from 15 percent to 20 percent. That meant its previous contractor for recycling, Republic Services, had to find other markets for processing or begin disposing of portions of contaminated loads in other ways, such as in landfills or by incineration.

As recently as the first quarter of 2012, Philadelphia was getting paid $67.35 a ton for its recyclables. By summer 2018, Republic was negotiating a new contract to process recyclables that would cost the city $170 a ton."[1]

[0] "Reduce, reuse, incinerate: Why half of Philly's recyclables aren't recycled" (Feb 11, 2019) https://www.npr.org/podcasts/657780675/the-why

[1] "At least half of Philly’s recycling goes straight to an incinerator" (Jan 25 2019) https://www.philly.com/science/climate/recycling-costs-phila...