Students from Hangzhou Phoenix Primary School learn how to sort waste in Hangzhou, capital of Zhejiang province, on July 30. [Photo/IC]

Shop owners who fail the review three times in a row will receive additional training. Punishments will be enforced if they repeat mistakes even after training.

Residents living by the street are required to sort their waste at a designated time and place. 

The aim of the demonstration street is to help residential communities on the street improve the accuracy of waste sorting to more than 90 percent by the end of the year. 

Hangzhou followed the example set by Beijing and Shanghai on waste sorting on Aug 1. 

Unlike Shanghai's waste classification system, which requires residents to separate dry refuse, wet trash, recyclable waste and hazardous waste, Hangzhou plans to classify residential waste into recyclable waste, hazardous waste, perishable waste and others. 

Individuals and companies who fail to sort waste may be fined up to 200 yuan ($29) and 5,000 yuan, respectively. 

To raise awareness of waste classification, Hangzhou also introduced a credit penalty. Those who violate the regulations will have the violation recorded in their personal credit history.