“Laws are in place, but even in China they are not being adequately enforced. The system is presently out of control.”

The report, China Faces a Conservation Challenge, by the Kenya-based charity, Save The Elephants and British-based charity, Aspinall Foundation, said that 26.5 per cent of the thousands of elephant ivory items on sale in Beijing and Shanghai were illegal.

“Every [measurement of] the ivory trade has exploded upwards in recent years,” the authors said. “Meanwhile the weight of ivory seized and number of elephants being killed in Africa have also increased.”

Yesterday in Washington, Britain’s Prince William – a longstanding supporter of conservation – denounced the criminal gangs that are involved in the trade in illegal wildlife products in a speech to the World Bank.

“Criminal gangs turn vast profits from the illegal killing or capture of wildlife; armed groups and terrorists swap poached ivory for guns; and middle-men oil the wheels of the trade in return for reward,” the Duke of Cambridge said.

He called the killing of wildlife for cash as “one of the most insidious forms of corruption and criminality in the world”.

The prince will visit Beijing and Shanghai in February, in only the second major visit to the mainland by a British royal, in support of his work to combat the illegal wildlife trade and boost conservation efforts.

Alex Hofford, a Hong Kong-based wildlife campaigner with WildAid, called the report’s findings “truly shocking”.

Hofford said: “Until governments around the world, including the governments of China and Hong Kong, can legislate [for] comprehensive ivory sales bans, there will always be a chance for smuggled ivory from illegally killed elephants to enter the black market as so-called ’legal’ ivory.”

Huge demand for ivory has led to a rise in the illegal slaughter of African elephants, with some wildlife groups estimating that more than 90 per cent of all the ivory on sale in China is illegally sourced. Much of it is traded secretly, not through shops.

The sale and carving of ivory is legal in China, but is meant to be tightly controlled. China permits only 37 companies to work with ivory and in 2013 only 145 outlets were allowed to sell ivory.

Collection cards are needed for the identification of legally sold ivory.

“Many small shops that do not have licences to sell elephant ivory items are doing so," said the authors, who visited 303 outlets selling elephant and mammoth ivory in Shanghai and Beijing.

The report found that the value of ivory has tripled since 2010; in Beijing the price of a 1.5kg tusk rose to about US$2,100 this year compared with a price of US$750 in 2010.

The Chinese government has previously said it is committed to helping end poaching in Africa, where about 22,000 elephants were illegally killed in 2012, said the Convention on International Trade in Endangered Species (CITES).

CITES banned trade in elephant ivory in 1989, but later allowed a limited amount to be sold.

The report’s publication coincided with a high-profile advertising campaign, fronted by Chinese film star Li Bingbing, China's United Nations environmental goodwill ambassador, which highlights the links between elephant poaching and terrorism.

The report found the number of licensed carving factories had increased, while more and more shops and outlets were now selling an ever greater variety of ivory products.

They authors claimed the rise number of legal outlets selling ivory was merely a “smokescreen” for illegal shops, so that more ivory products were being sold than ever before.

The report said that ivory retail prices in Beijing increased by 13.5 times between 2002 and this year, while the number of elephant ivory items on sale in Beijing and Shanghai had increased from 5,241 in 2002 to 8,444 in 2014.

The number of licensed factories and retail outlets in China had quadrupled in a decade, it added.

It found that in 2004 there were nine factories and 31 authorised retail outlets, compared with 37 factories and 145 retail outlets today. In addition, the researchers found 220 illegal ivory outlets, compared with only 45 legal ones.

Anti-ivory campaigners have frequently attributed the popularity of ivory in China to the sale of 62 tonnes of ivory in the country in 2008, which was approved by Convention on International Trade in Endangered Species – a treaty drawn up to prevent wildlife being overexploited.

An industry regulator on the mainland, who refused to be named, told the South China Morning Post: “After allowing legal import of ivory [in 2008], the country should have stepped up the crackdown on illegal ivory trade, so the legal ivory trade could replace illegal [trade]. However, what relevant departments have done so far is far from enough.”

Iain Douglas-Hamilton, founder of Save the Elephants, said “One hundred thousand elephants were killed for their ivory in Africa in just three years between 2010 and 2012, according to our research.”

Mainland factories and retail outlets must obtain a licence, issued by the National Forestry Bureau, in order to enter trade in ivory on the mainland.

As the major regulator of ivory trade in China, the bureau authorised the China Arts and Crafts Association – an industry association with legal ivory factories and retail outlets among its members – to carry out annual inspections on companies from 2009 to 2011.

The source said the association had not found any illegal ivory items at factories and retailers during the three inspections.

It is unclear whether the bureau’s inspections continued after 2011. The bureau could not be reached for comment.

However, an employee at the China Arts and Crafts Association, said yesterday many crafters had turned to other types of bone crafting, and that the soaring prices for ivory were the result of its scarcity.