Industry Special: Paper industry on track to grow with government support

The country's paper industry is poised for further strategic growth this year under the ongoing framework of China's 12th Five-Year Plan (2011-2015), which encourages fundamental structural reforms to accelerate the industry's development, according to industry leaders.

As an indispensable part of the national economy with notable positive trickle-down effects on local economies and businesses, China's paper industry has been named a primary industry of great strategic and economic importance in the five-year plan for the industry released last December.

Economic engine

The government's plan explicitly labeled the paper industry a new source of economic growth that positively drives related businesses. The plan provides that China's paper industry should step up structural reforms in order to transform its paper enterprises into sustainable modern businesses.

As a segment of the economy that has demonstrated strong growth in recent years, the paper industry's contribution to China's GDP is hard to ignore, according to the findings of a report by insiders titled the "Paper Contract with China", which offers commentary on the industry's efforts to promote sustainable practices.

With output value standing at nearly 600 billion yuan ($95 billion) in 2010 and tax contributions totaling almost 50 billion yuan, the paper industry is one of the key components of the national economy.

The report points out that the health of the paper industry is closely related to national economic development. Past studies have shown that per capita paper consumption is tied to a country's GDP and forms a chief indicator of a nation's extent of modernization and civilization.

China's per capita paper and cardboard consumption has been steadily on the rise in the past decade. In 2010, the figure was 68 kilograms, already above the global average.

Boon to related industries

Furthermore, as an industry of strategic importance within the national economy, the paper industry is at the center of an extensive industrial supply chain that includes related industries, such as forestry, agriculture, environmental protection, printing and publishing, chemicals, machinery manufacturing, industrial automation, and transport.

Because it forms the core of this supply chain, the paper industry has a high degree of connectivity to related industries and exerts a considerable impact on them. Therefore, the continued growth of the paper industry will have a profound impact upstream and downstream.

Spurring local growth

Its ongoing development means the paper industry will act as an economic stimulant for local economies.

For instance, Hainan Jinhai Pulp and Paper is one of the largest enterprises within the Hainan Yangpu Economic Development Zone. The zone was responsible for 42 percent of the province's industrial output in 2011, while it occupies less than 0.1 percent of the island's total land area.

As a notable modern pulp and paper manufacturer in China, Hainan Jinhai Pulp and Paper generated nearly 1.9 billion yuan in tax contributions between 2006 and 2010.

With a firm foothold in the local economy, the company worked with local farmers to create plantations and provided them with a source of income in the process.

The large-scale facility will need to transport more than 10,000 kilotons of goods after the completion of its upcoming plantation pulp paper integration project, which is expected to generate an economic boom in the zone's logistics industry.

Hainan Jinhai is also a key driver of local economic and social development. Following its establishment in the development zone in 2003, living standards in the neighboring Gongtangxia village rose remarkably due to economic growth and new employment opportunities.

In line with the government's call for structural reforms to further streamline the paper industry, industry leaders like APP-China, one of China's largest paper companies, have responded by proactively implementing measures to facilitate sustainable production.

These measures include the organic integration of the plantation pulp paper sector. This will effectively allow for the utilization of resources to produce products catered to public demand, and the process will create vast employment opportunities on the national and local level.

Statistics indicate that approximately 22.5 laborers are needed to work for every hectare of plantation. APP-China currently manages over 300,000 hectares of plantation within the country.

The plantation alone have created a vast amount of job opportunities for local farmers in forestry work, contributing to positive social development in local communities.

Sustainable modernization

While the industry still faces environmental problems due to the backward production practices of small-scale manufacturers, outdated technology and a lack of environmental awareness, China's leading paper enterprises are taking active measures to modernize the industry.

Improvements in technology, rising national standards, as well as growing awareness of corporate social responsibility in recent years have contributed to the growth of a modern paper industry that is in line with the objectives of the 12th Five-Year Plan.

In the plan, the government has called on the paper industry to be "energy efficient and environmentally friendly".

During the next five years, the industry is expected to increase the sustainability of its operations to enhance its global competitiveness while restraining its resource and energy use to provide customers with the highest quality paper products.

"With the rising prominence of China's paper industry, and under the 12th Five-Year Plan's strategic framework, we will continue to work with other paper enterprises to set new standards for the industry and strive toward sustainable development that will further increase our contributions to the national economy and in the global market," said Sophy Huang, PR director of APP-China.

The next five years will be a critical period for China's paper industry, and its future success will be determined by the combined work of paper companies and the government's policies on trade and industry support.

"While many challenges still lay ahead, the continued efforts of industry leaders to promote technological innovation and environmental protection will ensure solid progress toward long-term sustainable development while contributing to the growing prosperity of our nation," Huang said.

Contact the writer at zhuanti@chinadaily.com.cn