The incident unfolded in early July when a female tourist who traveled with her child to Datong City in Shanxi province by train mistakenly discarded her child's smartwatch valued about 1,000 yuan (US$139.34) in a rubbish bag left near their seat, according to the South China Morning Post.
The watch's tracking function later indicated it was still somewhere in the Datong railway station.
Acting upon her friend's advice, she called the city's government hotline the next day, hoping for help in locating the device, Red Star News reported.
A state-run environment company said it had discovered that the watch had been put in a huge container with eight tonnes of waste material before being moved to a rubbish transfer station.
Two cleaners were then instructed to sift through the garbage using their bare hands under temperatures exceeding 30 degrees Celsius to find the watch.
After more than four hours, the watch was found. The tourist offered them a cash reward but they reportedly declined, according to China Daily.
Datong authorities later highlighted the story as an example of the city's hospitality, but the move drew swift criticism online, with many accusing officials of misusing public resources and disregarding worker well-being for the sake of a relatively inexpensive item.
"I can't believe they went through so much trouble for something worth only a few hundred yuan," a netizen commented.
"I thought as a rich and powerful person I would buy a new watch," another wrote.
Responding to the criticism, authorities assured the public that the sanitation workers involved would receive a commendation.