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China’s Paper Industry Slumps after 11-Year Growth Surge to 100 Million Metric TPY

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The paper industry in China developed rapidly after China joined the WTO, according to a new report by China Research and Intelligence (CRI), Shanghai, China, titled Research Report on China Paper Industry, 2014-2018. Being marketed by Market Research.biz, Albany, N.Y., USA, the new report notes that in 1999, total output volume of paper and paperboard in China was only 29 million metric tpy, while the number topped 100 million metric tpy in 2010 for the first time. The CAGR of the 11 years was 11.9%. The growth rate began to decline afterward because of the huge base amount. In 2013, the output volume of machine-made paper and paperboard in China was approximately 115.14 million metric tpy, up by merely 1.22% YOY.

There is a large amount of paper producers with low industrial concentration in China. By the end of 2013, the report states, there was about 7,000 paper and paper product producers in the country. The average annual production per manufacturer was less than 20,000 metric tpy, which was significantly lower than that in developed countries. Only six paper manufacturers in China had the annual output volume of more than 2 million metric, and 10 other manufacturers' annual output volume reached 1 million metric tons in 2012.

The import and export of wood pulp, waste paper, and paperboard in China remained stable in 2013, according to the report. The import volume basically remained the same while the export volume rebounded slightly. Meanwhile, the unit price of import went up a little and that of export declined sharply. As of the import and export value, the former did not change while the later went down. Trade deficit still existed between import and export of wood pulp and paper products in 2013.

The export volume of paper in China is less than 10% of domestic output. In addition, to protect the environment and especially to ensure domestic supply, the Chinese government does not allow paper export in large quantities, the research report explains. Unlike other manufacturing industries, there is no tax rebate for paper export in China. Wastepaper processing trade is also restricted, and there are no subsidies for the paper industry.

Most of the world's major paper producers have accomplished the integration of forest, pulp, and paper, the report points out. However, it adds, most paper producers in China lack their own forest-paper system and thus qualified paper fiber supply depends greatly on import. The situation directly leads to unstable performance and low profit among the producers. Insufficient supply of raw fiber materials seriously hinders development of the paper industry in China.

Moreover, the paper industry in China is faced with four unsolved problems right now, the Market Research.biz report continues. The first problem is resource shortage caused by high geographic concentration. The second problem is the unreasonable product structure. The third one is the low product level caused by lagging machines, while the last one is serious environment pollution.

As the country’s economy develops, the Chinese people's income will increase, which promotes the demand of paper in industrial packaging, work, and life. It is predicted that demand of paper products in the Chinese market will keep rising in 2014-2018. At the same time, many investment opportunities in the paper industry are created in the process of product structure upgrade, which surely will attract more investors, the report concludes.

More information is available online.


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