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China Paper Faces Various Challenges in 2014

China Agriculture Report By CnAgri2014-02-25 09:51:54China Agriculture Report Print
Keywords:China Paper

 Recently, Zhao Wei, vice director of China Paper Association analyzed the developing environment of China paper industry in 2014 based on economy development in domestic and abroad, paper production and expansion. Since economy has not seen completely recovery and demand increases slowly, industry boom index is hard to go up. If the macro economy continues seeing no great change, domestic paper and paper board production and consumption in 2014 shall follow 2013 to keep slowing down.
   
Severer Competition Narrows Profit Space

   Due to slow economic growth and market demand, some products are surplus, which will bring severer market competition of paper products. Plus with producing costs increase, enterprises’ profit space will be narrowed and more and more enterprises will be in difficulty of operation.  
   
Market Price Keeps Low
   
   In 2014, China paper market shall see slow down of demand and structural and periodic surplus capacity, market prices for most papers and paper products shall go down from high and generally keep low.
   
   According to economic data from National Bureau of Statistics, domestic macro economy has stabilized to recover. Various reform targets were made in the Third Plenary Session of the 18th Central Committee of the CCP in Nov. 2013. With implementation of measures, domestic economy shall no doubt recover, which will boost market demand. China paper and paper board market shall remain low in early period and go up in later period.
   
Increase of International Trade Conflict Hinders Paper Products Export

   In view of global economic downturn, trade protection begins rising in all countries. With production increase, quality improvement and varieties increase, exports of China paper and paper products keep increasing year by year, to deal with which, many traditional paper manufacturers in many countries take measures to limit China paper products exports. Paper products antidumping and countervailing cases have involved the most countries compared with other exporting products in China. Domestic paper manufacturers should learn to deal with such situation optimistically and never give up rights voluntarily.

Pressure from Environmental Protection
   
   In 2013, Industry and Information Technology Ministry released two patches of enterprises with backward production capacity, of which, paper enterprises totaled 341. National policies on environment protection are stricter and except COD, BOD, ammonia nitrogen was also added to the controlling emission list and boiler denitration was also required. To meet the new standards, many enterprises need to increase investment, which will cause further increase of production and management costs.
   
Epitaxial Businesses Develop Rapidly

   To cope with the sluggish business and poor profit growth, paper manufacturers on the one hand enhance internal governance to decline costs and seek opportunities for merge and acquisitions and on the other hand begin entering other industries to expand profits.
   
   By glance of economic condition of paper industry, its original driving force and competitiveness have weakened and new advantages have not been formed, so it is in a progress of transformation and seeking balance. So paper industry should follow objectives ans tasks presented in the Third Plenary Session of the 18th Central Committee of the CCP to change way of increasing production and wholly enhance abilities of resisting risks and competitiveness by adjusting structure, eliminating backward capacity and increasing innovation. 

From “China Wood Market Monthly Report





 

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