Trends of China's Paper Industry under the Trend of Internationalization (I)

After nearly eight decades of rapid development since the "Eighth Five-Year Plan," China's paper industry has become an important force in the world's paper industry. In 1999, China's output of paper and board was 29 million tons, ranking third in the world; consumption was 35 million tons, ranking second in the world, and its consumption accounted for 12% of the world total. Despite tremendous achievements, we also clearly see that the paper industry in China is experiencing unprecedented challenges. In the face of the impact of the “paper” and the advent of China’s accession to the WTO, the future of China’s paper industry will include the attention of the Chinese government, companies, financial institutions, foreign companies, and international capital. Seriously studying the current status of China's paper industry, analyzing the opportunities and risks it faces, and correctly grasping the development ideas from a strategic perspective is of great significance to promoting the healthy development of China's paper industry.
I. Recognition of the development of China's paper industry 1. The internationalization of the domestic market is the biggest feature of China's paper industry.
The internationalization of the domestic market is reflected in: (1) In terms of products, China imports a large amount of pulp, paper and paperboard, and paper products each year. In 1999, China imported more than 12 million tons of the above three types of products, used foreign exchange of 5.6 billion U.S. dollars, and imported paper and paperboard accounted for 18.5% of the total consumption. It can be seen that the historical import volume has shown an obvious increasing trend, and the import dependency has continued to increase. improve. (2) In terms of equipment, key equipment for major technological transformation is basically imported from abroad. (3) With respect to funds, foreign investment has been booming. In the first three years of the “Ninth Five-Year Plan” period, infrastructure and technical reform projects have invested a total of 27 billion yuan, of which investment from abroad accounted for four-fifths of the total investment.
Internationalization is even expressed in the economic benefits of the company. When the foreign market is good, foreign companies will have less export or dumping to China, and the benefits of domestic enterprises will be better. When the foreign market is weak, foreign companies will occupy the Chinese market at a low price, and the efficiency of domestic enterprises will be poor. The year 1995 was the best year for the world's paper industry, including China. In 1997, foreign markets were not good. Chinese companies were affected by foreign products and even dumping. The situation was very difficult. The efficiency of China's paper industry is affected by the world market.
The trend of internationalization is irreversible. This is determined by the relative concentration of world papermaking resources and the global point of paper product consumption. As a country with a lack of forest resources but a large population, China cannot meet the needs of social development without importing foreign products. The deep understanding of this point will help us to correctly understand many issues faced by the papermaking industry in China. For example, whether or not to introduce foreign capital, whether to engage in economies of scale, whether to invest in factories where foreign resources are abundant, and how to treat technological equipment Localization, how to treat anti-dumping and so on. Recognizing the characteristics of the internationalization of the domestic market, it is possible to correctly grasp the development ideas of the Chinese paper industry.
2. While "internationalization" promotes the development of China's paper industry, it also poses a threat to the survival and development of state-owned large and medium-sized enterprises.
The decade since the "Eighth Five-Year Plan" has been a decade of rapid development of China's paper industry and a decade of continuous internationalization. In the ten years, China not only introduced a large number of advanced equipment and technologies from abroad, it also shortened the gap between China and the world's paper industry. At the same time, it also introduced a large amount of foreign capital and established some larger joint ventures and wholly-owned enterprises. The establishment of these enterprises has played a significant role in relieving the shortage of high-grade paper products in China. However, with the continuous development of foreign investment in China, it has brought great competitive pressure on domestic enterprises, especially the main force of China's paper industry, state-owned large and medium-sized paper companies.
At a high-level seminar for paper-making companies, some companies proposed that some foreign-funded enterprises will use loans from domestic banks to carry out project construction after they enter China. This is to take domestic money, domestic market, and domestic enterprises, hoping that relevant parties can Pay attention to this matter and propose countermeasures.
More experts pointed out sharply that the future of China's paper industry is foreign and private. Smell this point of view, so that state-owned large and medium-sized enterprises feel a crisis, in the future where the position of state-owned enterprises?
In the face of internationalization, state-owned large and medium-sized paper-making companies are in a dilemma.
3. Although the government and enterprises have taken active measures, they are still not enough to meet the severe challenges of international competition.
Faced with the trend of globalization, the Chinese government and enterprises have adopted a series of measures to promote the rapid development of China's paper industry. The papermaking industry has been listed as a key structural adjustment industry by the State Light Industry Bureau, and the paper industry and sugar industry have only been included in the technical transformation discount loan program that is supported by the government. A group of large state-owned enterprises are accelerating the pace of technological transformation and strive to create a situation that can compete with foreign products in several key varieties within a few years.
However, compared with foreign companies' initiatives, the development of China's paper industry is still far from enough. Even if it is the newsprint that the country has supported in recent years, the annual production capacity in the country is still less than 1.4 million tons; while foreign, large newsprint mills One can produce more than 1 million tons per year, with economies of scale significant. In addition, big foreign companies have created giants in the newsprint industry through mergers and acquisitions. The world’s top five newsprint companies account for 35% of the world’s total newsprint production capacity; the top 10 newsprint companies account for 54% of the world’s total newsprint production capacity. Because mergers and acquisitions between companies are lower than the cost of establishing new businesses and high investment returns, international mergers and acquisitions have become the trend of the world's paper industry.
The emergence of foreign giant paper companies has transformed the world paper market structure from monopoly competition to oligopoly. Under such a market structure, the development of small and medium-sized enterprises will become increasingly difficult. At present, the development of domestic enterprises mainly depends on their own funds and state loans. However, due to the lack of self-accumulation and the shortage of funds for national construction, it is impossible to build large-scale enterprises immediately. In the face of international competition, China’s papermaking companies are now “smoothing themselves”, and domestic companies have more competition and less cooperation. The country’s support policy is sunny and lacks focus. Take newsprint as an example, major domestic paper mills are undergoing transformation, and each company’s new scale does not exceed 150,000 tons.
The situation in which each country fights itself is in stark contrast to the wave of foreign mergers and reorganizations.
Without internationalization, China’s paper industry has no way out; if it engages in internationalization, it poses a threat to the survival and development of state-owned large and medium-sized enterprises. The harsh reality requires that China's paper industry must come up with a set of practical development ideas.

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