Recycling via China

In the last month, my recycling trash has been dumped in the street. I called the city of Nashua, Waste Management Department, to ask why my trash was dumped in the street. The clerk asked if I had bagged my trash in plastic bags, to which I replied, yes I had. The clerk then went on to explain that China has placed more restrictions on what we can and cannot recycle and that we can no longer “bag” our recyclables. She had me at “China.” Why is China involved with our recycling? Do we have to pay to have our trash shipped to China? Does China then create more plastic so they can over-package goods shipped to us? Stores such as Costco, over-package their items to the point that it takes a box-cutter to open a package. Is this packaging a product of Nashua recycling? Please tell me why the U.S. can’t manage it’s own recycling.