China opens up huge market of forestation, paper making

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Last updated at: (Beijing Time) Tuesday, February 17, 2004

China opens up huge market of forestation, paper making

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China is to invite foreign investment in a gigantic forestation and paper making program that is expected to involve 200 billion yuan (24 billion US dollars) of funds over one decade, officials said here Monday.

The Chinese central government has approved a national plan of building a complete industrial chain between the forestation and paper making sectors by 2010, said State Development and Reform Commission (SDRC) official Liu Tienan.

Liu, heading the SDRC's Industry Department, told a press conference held in Beijing that the move is aimed at meeting the rapidly growing demand of paper consumption and easing mounting industrial pressure on ecological environment.

The program includes planting five million hectares of fast-growing trees in the southeastern coastal areas. The country will also build a number of large-scale paper mills near the forestation areas, with their raw materials mainly from harvesting the woods.

The SDRC is planning to locate the construction sites of 3-4 large-scale wood pulp mills in the southeastern coast, each of which has an annual production capacity of 500,000 tons or more.

It will also direct investment to several construction projects of bamboo pulp mills in southwest China, each with an annual capacity of between 100,000 and 500,000 tons.

For the past decade, improvement of living standards of the Chinese people has led to a double-digit annual growth of paper consumption. In 2003, China consumed 48 million tons of paper and paper board, accounting for 16 percent of the world's total consumption.

However, China has a very limited resources of original forests that can be used for logging. Instead of wood, China's paper making industry uses straw as the main raw material. But the processing of straw fiber consumes much more water and produces greater amount of pollutants than wood fiber.

Wastes from paper mills have become a real headache for local residents in many regions in China. In October 2000, waste water from paper mills in Qian'an city in north China's Hebei province destroyed all harvest at more than 200 hectares of aquatic farms in the Bohai Bay.

The China Paper Association predicts that China's paper consumption will reach 70 million tons in 2010. Liu Tienan said by that time, China will be able to add production capacity of 5.5 million tons of wood pulp through implementing the national program.

In the meantime, the country will upgrade the existing paper mills in north and northeast China and close down small-sized paper making factories with annual capacity of less than 17,000 tons.

Liu said the Chinese government would only provide a small part of the 20 million yuan investment, mostly as seed money to encourage enterprises to participate in the program.

Liu said the Chinese government welcomes nongovernment sectors and foreign investors to participate in the program. The central authorities will allow qualified paper making companies to float shares on the stock market and encourage the merger, joint business and regrouping of state-owned enterprises with private and foreign investors.

The country will introduce advanced technology and methods of paper making and pollution control from other countries and use overseas talents and expertise to develop paper making equipment. In addition, the country will carry out international cooperation in the fields of breeding, fire fighting and pest and disease control in forestation, according to Liu.

Industrial analysts believe the paper making industry has huge market potential and its growth will also push up demand for other industries such as farming, package, printing, chemicals, machine building and transportation.

Source:Xinhua

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