Paper industry investments in China on the back burner

Removal of import tariffs by China on I January this year has led to a slight overheating of the investment climate. During 2004, papermaking capacity rose by 4.9 million tonnes through installation of new and used machines. Keenness to invest has been further boosted by the country's new environmental regulations, which also came into force on I January and which the government intends to enforce as promised. Although the regulations are not as strict as those in force in Europe and permit higher emissions for production capacity started up before 1998, they mark an important milestone. Changes in water consumption should have a particularly significant impact, as the new emission levels measure absolute amounts per tonne of product rather than just levels in the treated effluent (article on pages 80-82). In 2004, China's pulp imports totalled 6.5 million tonnes. In 2005, Hainan pulp mill will raise domestic production by around 800,000 tonnes, which means that imports are unlikely to rise much despite expected growth in demand of one million tonnes. China has set itself the goal of using more wood pulp and waste paper as raw materials for paper production. The focus is on waste paper, and China is seeking to raise its collection rates from the present figure of just under 30%.