The Development Trend of China's Paper Industry under the Trend of Internationalization

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 special moment of China’s accession to the WTO, the future direction of China’s paper industry is the focus of many aspects including the Chinese government, enterprises, 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 current state of 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 the low prices and even dumping of foreign products. The situation was very difficult. The benefits of China's paper industry are affected by the world market, "the world is cool and hot here."
The internationalization trend is irreversible. This is determined by the relative concentration of papermaking resources in the world and the global characteristics of paper products 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. A profound understanding of this point will help us to correctly understand many issues faced by China's papermaking industry. For example, whether we need to introduce foreign capital, whether we want to engage in economies of scale, whether we want to invest in factories where foreign resources are abundant, and how to treat technological equipment. 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 view, so that state-owned large and medium-sized enterprises feel a crisis, in the future where are the positions 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 in foreign countries, a large newsprint mill can produce more than 1 million tons per year, and the economies of scale are 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.
Second, the development of ideas for China's paper industry 1. China's paper industry to meet the needs of social paper must take the road of internationalization of the use of foreign capital Paper industry is a capital-intensive industry. It is predicted that from now until 2010, China's paper industry needs to invest at least 200 billion yuan to keep up with the growth rate of consumption. With limited investment capacity in the country, foreign capital must be used to meet China's demand for paper. Any attempt to protect national industries and support state-owned enterprises and oppose the entry of foreign capital is narrow and harmful. The entry of foreign capital will ease the contradiction between the accelerated development of China's paper industry and the shortage of funds, and will be very beneficial to accelerating the modernization process of China's paper industry. The country has done a great deal of hard work to support the development of the paper industry. However, to fully meet the development needs, the use of foreign capital is not optional. Otherwise, the output and quality of domestic enterprises can not meet the needs of society, which will lead to a large influx of foreign paper products, which will cause greater impact and damage to domestic companies. To meet the needs of social papermaking as a prerequisite for decision-making is the key to forming correct development ideas.
2. In the face of a huge market, papermaking companies should be fully prepared to respond to the rapid development of the industry. The paper industry is a rare industry that is in short supply and has great market potential. It is very important to correctly predict the speed of development of the industry, and thus to make preparations for ideological and material advances in order to adapt to fierce market competition.
There are currently many models for studying the speed of the paper industry. Some people have used the mathematical regression method to sum up the speed of the paper industry in the past and the growth rate of gross domestic product (GDP), and then predict the future development rate of the paper industry according to the speed of the national GDP. Development comes from investment. Because the paper industry invests heavily, the past was mainly invested by the state. The speed of development of the paper industry is based on the country's arrangement of investment and speed control according to the GDP plan. It is not the intrinsic law of the development of the paper industry that is related to GDP growth. The speed is consistent. With the increase of investment autonomy of commercial banks and the entry of foreign capital, the market demand will become the main factor determining the speed of development. As the product gap on the market is large, the pace of development of China's paper industry is likely to exceed the forecast value to a large extent, especially in the individual varieties, there will be unexpected rapid growth.
“More than a little more than a win, less is considered a lesser victory”, paper-making enterprises should pay enough attention to the development speed of the industry. It is necessary to formulate the company’s development plan and take effective follow-up measures according to the industry’s dynamic competition situation. Industry neutrality is firmly rooted. Otherwise, in the face of rapid growth and fierce competition in domestic and foreign markets, it will certainly be eliminated due to lack of preparation.
3. Using the game strategy of “Tian Ji’s Horse Racing” to cope with international competition, and preserve and expand state-owned large and medium-sized enterprises. Take newsprint as an example. If the market is divided into three levels of high school, low school, and the competition strategy of Chinese companies should be: good in the global market. At that time, foreign companies would reduce their exports to China (as in 1995). At this time, colored offset printing newsprint produced by new construction projects was used to occupy the high-end market, and ordinary offset press papers without modification were used to occupy the mid-range market. The products of small and medium-sized enterprises other than the big newsprint mills occupy the low-end market; when the global market is sluggish, due to the low cost of foreign products, they will inevitably sell to China at a low price. At this time, the high-end market may allow a portion of foreign paper imports. Extruded domestic high-grade paper can occupy the mid-range market, ordinary offset newsprint can occupy the low-end market, and the original low-end market products are eliminated. In this way, not only can the nine major newsprint factories survive under even fierce international competition, but they can also squeeze across small businesses and help companies grow in size.
In addition, China has exported nearly 1 million tons of paper and paper products each year, making foreign exchange nearly $1 billion. China is rich in non-wood fiber resources and raw materials are cheap. Therefore, if we can further improve the quality of non-wood fiber papers and position the market to meet the needs of the international market for some mid-range products, we can adopt this differentiated competitive strategy to The internationalization of the international challenges will open up a new path for the development of China's paper industry.
4. Domestic enterprises should actively carry out mergers and reorganizations to form a “joint fleet” of China’s paper industry as soon as possible to fight against foreign “ship-air carriers”.
Domestic enterprises must reorganize their advantageous assets, remove bad assets as soon as possible, and abandon the existing burden so that the living forces can survive. This should be done sooner rather than later, otherwise, due to historical burdens, even well-run companies can hardly win in the future international competition.
For domestic large-scale enterprises, they are currently facing rare opportunities for low-cost expansion. According to the requirements of the state, by the end of this year, paper-making enterprises must be environmentally friendly. Just as in the closure of more than 4,000 small paper-making enterprises in the two river basins in 1996, some companies that are not up to standard will be closed by the end of this year. In this way, there will be a larger gap in the paper product market, which will provide market space for the expansion of large companies, and also create conditions for large companies to acquire good assets at low cost.
It is a strategic requirement for large and medium-sized state-owned enterprises to adapt to international competition by establishing large group companies through mergers and acquisitions and other means in the same region or in the same paper species, thereby achieving economies of scale and improving overall competitiveness. If China’s paper industry does not seize the precious opportunity to integrate the advantageous resources of the entire industry, then even individual companies and projects will flourish at the moment, but in the face of the intense competition of foreign large-scale paper groups, they will survive for several years. crisis.
"Single fight alone" can no longer adapt to an international competitive environment. Domestic paper-making companies can only form "joint fleets" as soon as possible to fight against foreign "aircraft carriers."
5. Governments, enterprises, and financial institutions must strengthen communication and collaboration to jointly undertake the task of revitalizing China's paper industry. In the planned economy era, the government adopts a "unified and joint external" approach to the regulation of the industry, and carries out unified approval of the project. Prevent redundant construction and disorderly development.

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