How much will the impact of the Sino-US trade war on the printing and packaging industry?

Such an unprecedented power war in a big country is unimaginable for the impact of such an important basic industry as printing and packaging.

On March 23, US President Trump officially signed a trade memorandum on China at the White House. Trump announced on the spot that it would be possible to impose tariffs on $60 billion of Chinese exports.

Therefore, there is a point of view that it is unimaginable to think that such an unprecedented trade war in a big country may be a blow to an important basic industry such as printing and packaging. For example, paper packaging used in electronics, toys, footwear, etc., will decrease as the volume of exports decreases. If more than 100 products reported in the media are subject to tariffs, there may be more paper packaging products that may be involved.

 

That is a simple analysis from several aspects. If China and the United States really have a trade war, how much impact will it have on our printing and packaging industry?

Wood pulp

China is currently a major exporter of wood pulp and paper. In 2017, the export volume of China's double-adhesive paper was 920,000 tons, accounting for 12% of the total output. The total export volume of coated paper was 1.23 million tons, accounting for 26.8% of the total output. The volume is 530,000 tons, accounting for 8% of the total output. However, the United States has always adopted anti-dumping policies on Chinese cultural papers, and the raw materials are shipped from Europe and the United States, and the products are not competitive in the local area. China's wood pulp paper exports are mainly in the Middle East and Southeast Asia. Therefore, from the marginal point of view, this round of trade war has little impact on China's wood pulp paper exports.

 

Boxboard corrugated paper and packaging

There may be considerable concerns in the field of packaging and box corrugated paper, as it is directly related to exports. In 2017, the total retail sales of consumer goods reached 36.6 trillion yuan. In 2017, China’s total exports amounted to 15.33 trillion yuan. Considering domestic consumption, the circulation of industrial products also needs corrugated packaging. Therefore, we assume that domestic consumption and overseas exports use boxboard corrugated paper. The proportion is equal to the ratio of domestic sales to exports, which is roughly 30%. In 2017, China’s exports to the United States accounted for approximately 20% of all exports. Therefore, the proportion of domestic exports of corrugated cardboard to the United States is roughly 6%, and the United States has imposed tariffs on China’s roughly 60 billion US dollars of goods on a large scale, accounting for about 14% of China’s exports to the United States. The total amount of slate paper is only 0.84%. This is the impact we have assumed on China's zero-growth exports to other countries and zero domestic growth.

Waste paper

The waste paper market as a whole is relatively stable. Even if the Sino-US trade game is upgraded, the raw materials for the control of wood waste and the import of wood pulp required for papermaking can be imported and filled in Europe and other regions. In particular, the recycling rate of waste paper in China has been rising in recent years, reaching nearly 48% in 2016. The substantial increase in the recycling of waste paper from its own waste paper can effectively meet the domestic papermaking needs.

The recycling rate of waste paper in international developed countries is generally around 75%. With the further support of national policies, there is still much room for domestic waste paper recycling. In addition, the adjustment of China's paper enterprises in 2017 will increase the voice of large paper mills. Small and backward production capacity delisting, providing stable waste paper raw material demand for the next paper recycling.

 

Therefore, we believe that the Sino-US trade war has little impact on the domestic printing and packaging industry, but it will bring certain negative impacts at the margin. By increasing the foreign trade orientation of other countries and enhancing domestic consumption, it can completely offset the Sino-US trade friction. Negative effects. In fact, if the real trade war has an impact that will affect all walks of life, there is no need to overstate the impact of tariffs on an industry.