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China Is No Paper Tiger

Without much fanfare, and without many people even being aware of it, in 2009, China overtook the U.S. as the world’s leading papermaker.  Moreover, they did it in much the same way that they became the world’s premiere manufacturing beast: with innovative engineering, a solid game plan, a vast reservoir of cheap labor, and massive government subsidies.

In this instance, it’s their “innovative engineering” that boggles the mind.  China has managed to develop a genetically altered hardwood eucalyptus tree (which begins its life in the lab as a tissue sample in a petri dish) that requires only four to six years to reach full height.  That’s roughly one-tenth the time it takes “natural” trees in North America (which, all will agree, are abundant) to reach maturity.  Eucalyptus is a favored furnish in papermaking because of its soft, low-coarse fiber.

Each year Chinese laboratories clone 190 million of these “test-tube” eucalyptus sprigs, which are planted on hundreds of thousands of acres spread over several Chinese provinces.  Wending Huang, Asia Pulp & Paper’s chief forester in China, calls these genetically altered trees, “Yao Mings” (referring to a famous and very tall Chinese basketball player).

Wisconsin is the leading papermaking state in the U.S.  Maine is second.  China can now produce in just three weeks what Wisconsin produces in one year.

But genetically engineered trees aren’t the whole story.  In addition to experimental woodlands, China has established itself as the world’s leading recycler of paper.  Indeed, its recycling, de-inking, re-pulping operation is staggering.  China buys about 54 billion pounds a year of scrap paper and cardboard from all over the world, and uses this recycled material to produce about two-thirds of its paper and cardboard (the cardboard in which it ships its manufactured goods all over the world).

The McClatchy News Service reports that China has 20 mega-sized paper mills spread across the country, and that the automated paper machines in these state-of-the-art facilities are capable of producing sixty miles of glossy publishing-grade paper per hour.  That’s a mile a minute—5,280 feet per minute (fpm) of glossy, high-quality base sheet.  That’s very impressive.

Not to give away any trade secrets here, but Kimberly-Clark’s CW Machine #1, in California, produces a 172-inch wide sheet, at 4,600 fpm, which is a very respectable speed for a “vintage” machine that cranks out paper 24 hours a day, 360 days a year.  But Machine #1’s wadding is used exclusively for facial tissue, bath tissue, and paper towels.  A glossy, “publishing-grade” sheet is a whole other deal.

It should be noted that China is still required to import the overwhelming majority of its virgin timber and processed (chemically treated) pulp.  It gets its timber from all over the world (e.g., Indonesia, Russia, Vietnam, Brazil).  In 2011 alone, it imported 14.5 million tons of it (29 billion pounds), l.6 million tons of which came from the U.S., where sawmills, logging and pulp operations have closed down, leaving timber businesses looking for new customers.

While environmental groups have objected to China’s aggressive demand for wood pulp, claiming that it’s destroying the world’s forests, American companies and Wisconsin politicians have their own reasons to complain.  They accuse the Chinese government of illegally subsidizing the country’s paper mills by “dumping” unfairly priced (too cheap to compete with) paper on the American market.  In the 1970s and early ‘80s, Japan was accused of the same practice with its cars.

According to McClatchey News, “the Washington-based Economic Policy Institute estimates the Chinese government doled out at least $33 billion in subsidies to its paper industry from 2002 to 2009—the period that coincides with its stunning growth. That’s more than $4 billion a year, and the number is growing.”

So what we have are American paper mills being squeezed out not only by foreign competitors but by foreign competitors who are being subsidized by their governments.  It must be nice having a government as your business partner and benefactor.  One of the advantages that immediately comes to mind is that they can continue printing money for you, even after you’ve run out of your own.

Consider the American space program.  What if there had been no NASA—no federal space agency?  What if, instead of NASA, we had half a dozen private companies, financed by private investors, trying to put a man on the moon?  Forget about it.  You wouldn’t even have a space program in 1969 without the government.  Which is why the Chinese government chose to “sponsor” its emerging paper industry.

The third complaint—along with environmental degradation and illegal “dumping”—is reserved for labor unions.  Predictably, paper companies blame the unions for wanting decent wages and benefits.  Attacking working people—those at the very bottom—should come as no surprise.  It’s an example of Newton’s First Law of Fecal Gravitation (i.e., shit rolls downhill).

David Macaray a Los Angeles playwright and author (“It’s Never Been Easy:  Essays on Modern Labor,” 2nd Edition), was a former labor union rep.  He can be reached at dmacaray@earthlink.net 

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David Macaray is a playwright and author. His newest book is How To Win Friends and Avoid Sacred Cows.  He can be reached at dmacaray@gmail.com

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