It is without question, China’s impact on the Paper and Pulp Industry from 2002 on becoming the top world manufacturer of paper. Wisconsin has lost over twenty paper and pulp companies, and we are witnessing more USA shutdowns of paper and pulp companies across the USA. In China, the government subsidies and loans have provided dedicated support for the paper & pulp industries expansion leading to enormous overcapacity with a meteoric increase in China’s exports. Yet, China has no competitive advantage in these capital-intensive industries and lacks the natural resources to fuel this growth importing the bulk of its materials. China sells at prices much lower than the United States or the European Union. The cost of labor is a small cost of the paper industry and pulp at about 35% of the production costs. China must transport their material and finished products across the global adding costs to their products!
The Chinese Government strategy is to target specific industries to dominate, control, and use other countries resources with Government incentives to increase their manufacturing capacity. From 2002 to 2009, billions of dollars in subsidies supported electricity, coal, loans, land, pulp, paper, and recycled paper.
The Chinese Paper Industry government owned companies have been able to finance the large investments in the Paper and Pulp Industries. USA companies do not invest billions with minimum returns on their investments. The overcapacity has led to low prices, low optimization of production unacceptable to USA Companies, with a strategy to export their products at unfair market pricing by driving companies out of business! Today, China has major stakes in USA and Canada Paper and Pulp companies. The Chinese Government strategy is the same with other key manufacturing industries to the USA and World! Simply, put USA and Worldwide companies out of Business!
We are witnessing the same strategy from China for the Packaging Industry in the USA. Recently, TedPack, a flexible packaging company from China, has acquired Fairview International’s operations and opened its first U.S. office in Wisconsin to better serve American customers. China’s Kingsun to invest $80 million in their First U.S. Manufacturing Facility in North Carolina. Kingsun is a Chinese manufacturer of biodegradable paper tableware, using wood pulp, and recycled cardboard impacting USA Manufacturers. Anticircumvention Working Group of the American Paper Plate Association requests relief – including retroactive duties from Chinese Circumventing products through Thailand and Vietnam. The Chinese companies began moving paper plates finishing operations to Cambodia and Malaysia to circumvent the AD and CVD duties arising from those investigations to gain unfair advantage in the marketplace. Simply, the Chinese companies skirting the rules and dumping their products at the expense of USA Companies. The principal manufacturers in the United States affected include AJM Packaging, Aspen Products, Dart Container, Hoffmaster Group, and Unique Industries, all of which are in the Great Lakes region.
