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									    Aarkstore.com Research Report on China's Papermaking Industry, 2012

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In recent years, China becomes one of the countries with the quickest productivity increase in
world’s papermaking industry. Since 2006, the production of China’s machine-made paper and
paper boards maintains a steady increase momentum. In 2011, the production reached 110.34
million tons, with an increase of 13.24% YOY. There is a large gap between output and
consumption of China’s pulp annually. For paper and paper boards, the productivity continually
expands while that of certain paper varieties will be at risk of over productivity. Packaging paper
and culture paper are still the priority. China’s chrome paper market suffers from double pressure
from the export obstacle and over productivity. The market of news paper markedly declines; in
recent two years, the productivity of case boards will largely expands, which will also have such
secret worries in the long term.

Although forestry-paper integration is enhanced and it is encouraged to be implemented in
enterprises by the government, it still relies on the import of raw materials to a great extent
because of the rapid growth of output. The output of most paper products is predicted to
basically meet the demand of domestic markets, so the import volume of products is annually on
the decrease. Moreover, the export volume of China’s paper products also constantly rises in
recent years.

Productivity of China’s paper and paper boards will further expands within the future several
years. Meanwhile, with the government’s forceful promotion of energy-saving and emission
reduction, a batch of backward productivity will be replaced and new programs will be obviously
characterized by the large scale. Various papermaking enterprises continue the expansion, high-
end products of papermaking industry will be short and the supply of low-end products will
distinctly exceeds demand.

It is predicted that in the future several years, the average annual increase rate of China’s paper
and paper board consumption is no less than 5%. The product structure will be continuously
optimized, which is adjusted in the direction of light basis weight, functionalization, high quality
and multi-variety. The paper product structure with complete functions adapting to different
levels and pluralism market demands will be gradually formed.

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