Thursday, July 1, 2010

China's Paper Industry Owes Rapid Growth to Goverment Subsidies

















































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United State

Report details unfair competition in paper industry
Posted Thursday July 1, 2010 stacks of white paper

UNDATED (WSAU) Paper companies in the U.S. are pointed to a new report claiming they face unfair competition from overseas. The Economic Policy Institute in Washington says Chinese paper-makers received 33-billion dollars in government assistance between 2002 and 2009, allowing them to expand capacy and force prices down.
Many U.S. paper mills say they can't be profitable when the paper market is flooded with product. They've been closing mills and shutting down machines.
Ohio-based New Page and other paper companies are waiting for a final ruling from the International Trade Commission on unfair competition in the paper industry. New Page operates mills in Stevens Point, Wisconsin Rapids, Biron, and Whiting.
The U.S. Department of Commerce and the United Steel Workers of America have supported NewPage's claims of unfair competition.

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China’s Paper Industry Owes Rapid Growth to Government Subsidies
Creating an Unfair Global Advantage 6/30/2010


Massive Chinese government subsidies have given China’s paper industry an unfair competitive advantage that has helped fuel the industry’s rapid growth in recent years, contributing to the U.S.’s worsening trade deficit with China, a new study from the Economic Policy Institute shows.
China overtook the U.S. as the world’s largest producer of paper and paper products in 2008, and has increased its production of paper three-fold since 2000, according to the study, No Paper Tiger: Subsidies to China’s Paper Industry from 2002-2009. The study shows that the rapid rise in China’s paper industry did not result from advantages in natural resources, economies of scale or scope, new technology, or lower cost of production (including labor). Instead, the growth resulted from at least $33.1 billion in various Chinese government subsidies paid to te country’s paper industry between 2002 and 2009.

“The United States is a net importer of paper and paper products, and imports from China are rising faster than those from any other country. Over the past decade, U.S. paper mills have shrunk with drops in output, employment, revenues, and the number of domestic companies, while Chinese imports have risen rapidly,” said the report’s author, Usha C.V. Haley, a Chaired Professor of International Business at Massey University in Auckland, New Zealand, and an EPI research associate.

“Unless the U.S. government acts to offset unfair and illegal subsides to Chinese paper exports, U.S. paper production will continue to erode, leading to further job losses and widespread mill closures,” said Haley. “The United States should investigate the widespread use of subsidies throughout China’s paper industry, and impose countervailing duties whenever those harm or threaten to harm domestic producers and workers making similar products in the United States.”

The rapid rise of China’s paper industry has led to a growing trade deficit in paper between the U.S. and China. Haley estimates that in February 2010, the annualized rate of growth of Chinese paper and paper products into the U.S. was 22%.

A report released earlier this year by EPI showed that the growing overall trade deficit between the U.S. and China eliminated or displaced an estimated 2.4 million jobs in the U.S. between 2001 and 2008. That report documented other ways in which China’s government policies give China’s industries an unfair advantage, including currency manipulation and wage suppression. And a report by Haley released last year shows that China’s glass industry also became the world’s largest thanks to government subsidies.

The Economic Policy Institute (EPI) is an independent, nonprofit, nonpartisan think tank that researches the impact of economic trends and policies on working people in the United States and around the world. EPI's mission is to inform people and empower them to seek solutions that will ensure broadly shared prosperity and opportunity.
Source: Reprinted From The Economic Policy Institue Website
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India
ITC to invest Rs 1,000 cr for expansion of paper mill
B Krishna Mohan / Chennai/ Hyderabad July 02, 2010

To focus on writing and copier paper segments
Business conglomerate ITC Limited is setting up another unit at its existing paper mill in Bhadrachalam at a cost of Rs 1,000 crore. The 200,000-tonne per annum (tpa) paper plant is expected to be ready in two years, taking the combined capacity of ITC’s paperboards and specialty papers division (PSPD) from the existing 560,000 tpa to 750,000 tpa.

The expansion project is being funded through internal accruals. The construction work has already begun, said ITC’s divisional chief executive Pradeep Dhobale.
Last year, ITC has set up a 100,000-tpa unit in Bhadrachalam to make copier paper under the ‘Classmate’ brand. The company is hopeful of increasing revenue contributions from its writing and copier paper segments as these are expected to grow around 15 per cent.
“The government is spending huge amounts on education. There is a huge demand in the writing and copier segment, particularly from the younger generations,” he said, adding that education segment accounted for about 50 per cent of the total sales of writing and copier paper.
According to Dhobale, the demand for paper from the education segment is expected to grow at around 15 per cent a year. The company would pitch the two brands - Classmate and Papercraft - on an environmental platform as it replaced chlorine with ozone for bleaching and the raw material is sourced from sustainable forestry, he said.


“We will launch a paper variant made from recycled paper for these two brands,” he said. The company has plans to add further capacity apart from meeting paper demands in the publication segment, Dhobale added.

ITC is seeking about 1,500 acre from the state government for capacity expansion. “We are talking to a company for expanding our writing paper segment,” he said, while declining to divulge the company details or the deal size.

Its revenues are Rs 3,400 crore, of which about 10 per cent comes from exports mainly to Europe, West Asia, Southeast Asian countries and Australia. It is now increasing its supplies to these locations. The international price is around $1,000 a tonne.

There is also an increasing demand for newsprint, tissue paper, craft paper and corrugated boxes. The growth in the paper industry is driven by the growth in the FMCG segment. The younger population is the main consumer of paper. The supply of paper and allied products is comfortable even as the demand is growing around 8-10 per cent per year, he said.

-Business Standard-

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July 01, 2010 Eastern Daylight Time
Research and Markets: China Pulp & Paper Industry

- Executive Summary and Forecast 2009 & 2010

“China Pulp & Paper Industry - Executive Summary and Forecast 2009 & 2010”
.China Pulp & Paper Executive Summary & Forecast (2009-2010) helps you to explore more deeply into the China pulp & paper market.

China economy was stricken by the financial crisis in late 2008, and paper sector was also impacted. In early 2009, margins for pulp and paper sectors shrank markedly with many pulp plants operating at low rates or shut down and paper plants consuming high-cost feedstock. In the second quarter of 2009, China published the Revitalization Programming Light Industry. However, the programme, in which the policies of export drawback and forbiddance of processing trade do not refer to the paper industry, is unable to improve the paper industry in short period as it expected long-term stable development. Mass of small scale paper plants were shut down, facing the financial crisis and environmental protection; while mid-to-large scale paper producers got over the financial crisis gradually due to the improvement of environmental protection measures. Though paper sector saw difficulties in 2009, the sector has been recovering since the second half of 2009, and most large-scale producers attach importance to their own longrun development.

HIGHLIGHT of this study:
•Supply-Demand Situation of China Paper Making Industry 2009
•Uncoated Printing & Writing Paper
•Coated Writing & Printing Paper
•Containerboard
•Tissue
•Paper Production in China
•New Paper Making Projects and Expansion in China
•Investment of Paper Making Industry and Capital Market Situation
•Chenming Paper
•Bohui Paper
•Sun Paper

Key Topics Covered:
1. Chinese Paper Market Review 2009
2. Supply and Demand 2009
3. Main Feedstock 2009
4. Prices of Main Paper Products
5. Paper Production by Region
6. New Projects and Expansion Projects
7. Investments
8. Impact of the World Economy

For above Report [Click Here]




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USW wants relief from subsidized Chinese paper

A new study documenting illegal subsidies to Chinese paper producers shows that U.S., policymakers must intervene now to preserve the domestic paper industry and hundreds of thousands of good-paying jobs, the United Steelworkers (USW) said in a statement released on Wednesday.

The report, entitled No Paper Tiger: Subsidies to China’s Paper Industry from 2002-2009 was released by the Economic Policy Institute (EPI) and documents $33 billion in government subsidies to the Chinese paper industry for pulp, coal, electricity, and recycled paper, enabling the Chinese paper industry to sell its products at artificially low prices, the USW said.

The report is available at http://listserv.steelworkers.org/t/175125/1206326/137328/0/

“With so many Americans out of work, we cannot continue to hemorrhage paper manufacturing jobs because China violates international trade laws with massive subsidies to its industry,” USW International President Leo Gerard said.

China’s government-controlled economy enables it to subsidize industries in ways never considered in market-controlled economies like the United States,” the statement said. “In addition, government subsidization of industry violates international trade regulations.”

“There are too many industries—glass, paper, tire, tubular steel—where China upsets the global market by grossly and systematically subsidizing its production,” Gerard said.

“Free trade must be fair and rules-based or manufacturing in North America will further deteriorate, throwing millions more Americans out of work,” Gerard added. “The only solution is for U.S. lawmakers to demand China obey international trade laws or to impose sanctions on Chinese imports that will have that effect.”

“The results of the study confirm the long-time contention of the USW and U.S. paper manufacturers that China improperly subsidizes its paper industry in ways that destroy American manufacturing and American jobs,” the statement said. “The USW and three paper companies—Appleton Coated LLC, NewPage Corporation, and Sappi Fine Paper North America—filed suit seeking relief from the effects of the Chinese subsidies and have won every stage of that case.


The USW represents 850,000 workers in North American, including some 130,000 who manufacture paper products.
Posted 7/1/2010

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