Zhang Yin, 49, leapt to the number one spot from 36 last year after her company, Nine Dragons Paper, was listed in Hong Kong in March, according to the Hurun rich list compiled by the Shanghai-based accountant Rupert Hoogewerf.
Zhang made her money from recycling scrap paper brought in from the US and processed in China for the retail sector.
Described as a self-made woman, she is now richer than American TV hostess Oprah Winfrey and Britain's JK Rowling, author of the Harry Potter series.
She overtook Huang Guangyu, the founder of electronics retailer, Gome, whose fortune is estimated at $2.5 billion.
Zhu Mengyi, chief of the Guangzhou-based real estate group, Hopson Development, was ranked third with personal wealth worth $2.1 billion.
Women were becoming increasingly visible among China's rich set, with 35 now in the top-500 list, which Hoogewerf said was a "dramatic change."
Other top women include the metal trader, Chen Ningning, in 20th place with a fortune estimated at $800 million, while Beijing property developer Chen Lihua with $750 million was ranked 25th.
The biggest loser was the owner of Fuxi Investments, Zhang Rongkun, who was ranked 48th last year.
Zhang failed to make the list after he was detained in July for his role in Shanghai's biggest ever financial scandal involving the city's retirement funds, which has also seen the sacking of its top politician, Chen Liangyu.
Making it on to China's rich-list has often been seen by the mainland's wealthy as risky business.
The real estate tycoon Zhou Zhengyi and the Chinese-Dutch business magnate, Yang Bin, both made it on to the list in previous years before falling foul of the authorities and being sentenced to prison terms.
Nevertheless, in a sign that China's rich keep getting richer, there were 15 billionaires on the list, up from seven last year.
For the first time since 2003 there were no IT entrepreneurs in the top 10, which contrasts with Europe and the US where most fortunes tend to come from technology, telecommunications, music, movies and publishing.
To make this year's list $100 million was necessary; no humble sum compared with the first list of China's richest people eight years ago, when 50 were ranked with a cut-off of six million dollars.
"The rich in China are getting rich and fast," said Hoogewerf.