How Paper Industry Faces the New Situation of Entering WTO

The World Trade Organization (WTO) was established in 1995 as an international organization established by the General Agreement on Tariffs and Trade (GATT) after the Uruguay Round (1986, 1994) as the pillar of the World Trade Organization process. The basic composition of the World Trade Organization is three agreements, namely, GATT, GATS and TRIPS. The intention of the World Trade Organization is to regulate all trade matters, including tariffs, market access, intellectual property rights, most-favoured-nation treatment, labor, arbitration, and sanctions. WTO is a supranational economic legislation and judicial institution. Its regulations are higher than those of individual countries. If any country’s economic legislation contradicts WTO regulations, it may be convicted of violating WTO rules and being subject to sanctions. The WTO currently has 135 member states. As an official international trade organization, it is legally equal to the UN international organization. It is considered that the WTO is essentially equivalent to the economical United Nations. Together with the International Monetary Fund (IMF) and the World Bank, it is called the three pillars of the contemporary world economic system.
From the entry into force of GATT in 1948 to the establishment of WTO in 1995, after many rounds of multilateral trade negotiations, developed countries’ average tariff rate from 50% in the 1940s dropped to around 4% in the 1990s. The developing countries and regions have generally established a restricted tariff system and lowered the average tariff rate to around 13%. Multilateral trade negotiations have also achieved numerous results in cutting non-tariff barriers (such as market access, import quota restrictions, etc.), which has greatly promoted the development of international trade and economic prosperity. 
After more than 13 years of arduous negotiations, China took the opportunity of the relevant bilateral agreements reached between China and the United States in November 1999. In addition, an agreement was reached with the European Union in 2000 and China will formally join the WTO. The practice in China for more than 20 years has proved that the sooner the industry is opened up, the faster the industry develops and reform and opening up is the only way. Joining the WTO is an inevitable choice for China to build a good external environment for economic development. It also shows that China, the world's largest potential market, not only allows China to develop itself, but also needs to be open to the world conditionally, so that all countries in the world can participate in development. This is conducive to the use of foreign investment and external driving forces to promote the further development of reforms and breakthrough bottlenecks in the reform process in order to accelerate economic development. However, China has long been in a planned economic system, and it is necessary to achieve economical integration with the international market. There are many problems that need to be resolved. Therefore, we are negotiating and solving problems, so it took more than a decade to gradually create adaptations to join the WTO. Some basic conditions. However, domestic industries at different stages of development and different types of industries have different impacts after joining the WTO. All of them have opportunities and challenges. All of them need to be carefully analyzed according to specific conditions, and corresponding measures must be taken to meet the challenges. ready. A brief summary is as follows:
1 Characteristics of Modern Pulp and Paper Industry and Current Situation of China's Paper Industry 1.1 Compared with traditional industries, modern paper industry is a capital and technology intensive industry, similar to heavy chemical industry and metallurgical industry, and its economies of scale and technical equipment level. The impact on competitiveness is much more important than that of general labor-intensive industries. Its development and clean production require large amounts of capital and advanced technology inputs. 
1.2 During the period of planned economy, China's paper industry did not receive equal attention, such as metallurgy and heavy chemical industry, and the country’s investment funds were extremely limited. The rapid growth of production since the reform and opening up has largely depended on the disorderly development of small enterprises in townships and townships, thus distorting the nature of this modern industry to a large extent, and overall it has become a kind of non-modernization with low efficiency and heavy pollution. Industry is still in the childish stage of development.
1.3 Since the 1990s, the domestic paper industry has been protected by a small amount of policy, the import tax rate has been continuously lowered, and foreign investment has also been limited.
1.4 The domestic textile, machinery, clothing and Other industries export is much higher than the import, and has become a large foreign exchange earner. However, the paper industry is basically self-sufficient in the early period of reform and opening up, and has increasingly become a large importer of foreign exchange. In 1999, various papers were imported. There were 6.913 million tons of paperboard and paper products, 3.09 million tons of commercial pulp, and 2.517 million tons of waste paper. The total amount was 12.527 million tons, and more than 5.6 billion US dollars was used for foreign exchange. However, the exports are insignificant, which is worse than that of the steel and chemical industries.
2. Aspects of the impact of WTO accession on the paper industry 2.1 It is generally believed that as tariffs are lowered after the accession to the WTO, the price competitive advantage of imported paper will increase, and the impact on the domestic market will increase. The second is the opening up of investment markets, the reduction of restrictions on foreign investment, and the granting of preferential treatment for foreign-funded enterprises in terms of national treatment, which will increase the competitive pressure on the relatively backward companies in the country. Therefore, it is believed that after China's accession to the WTO, papermaking companies will fall into a very difficult position. Some departments estimate that after the accession to the WTO, papermaking companies will face an impact of 60%. As some companies have reduced their personnel and collapsed, the number of unemployed people has reached 700,000. The reliance on imported paper has increased further and the industrial situation is severe. Think that the harm is more than benefits.
2.2 Some people think that the domestic papermaking industry is in a very difficult situation in recent years, and it has a large relationship with its own technology and quality. Compared with the capital and technology-intensive modern paper industry, downstream industries that use paper as the main raw material, such as printing, publishing, packaging, cigarettes, etc., require less funds to modernize, have shorter construction periods, and can quickly To realize their modernization and transformation, it is inevitable that higher quality requirements are put forward for paper products. Under the current situation of import tariff rates, the price/performance ratio of some imported papers is still better than domestic products, and users have the right to choose. For example, if there is a backlog of domestic coated paper and a lot of imports, that is an example. There is no other way out for the paper industry if it does not accelerate the elimination of inferior forces and improve product performance and price ratio.
2.3 From the current tariff rate, the tax rate on the main varieties of domestic paper has been reduced to 12% to 15% in recent years (commercial pulp has dropped to zero). Although it is higher than 5% to 6% in some developed countries, it is already lower than the average of 20% in countries in Southeast Asia and South Asia. It is far lower than the 50% to 100% tax rate of the long-term protected automobile industry in China. A country needs certain protection for its infant industry, but it is overprotected and lacks external pressure. It is even more difficult to change its backwardness. It should also be noted that in recent years, foreign-funded enterprises have developed rapidly, and their papers without import duties have pressure on the overall market, but they have not been able to suppress the domestic powerhouses. It is a good thing to turn stress into a driving force for self-improvement. We must welcome the entry of foreign capital, use their funds and technology, and develop with domestic enterprises in competition. This will be beneficial to turning China into a strong paper industry.
2.4 Based on the above considerations, from the perspective of industrial development strategy, it is believed that joining the WTO will help encourage domestic papermaking enterprises to accelerate the realization of industrial organization, management system, product structure, raw material structure adjustment and technological progress through more intense market competition. And it is conducive to attracting foreign capital to solve the lack of capital and technical difficulties in industrial development. This will accelerate the modernization of China's paper industry and solidly increase the competitiveness of the industry. Moreover, some problems have already existed. Even if China does not join the WTO, in order to seek the survival and development of the industry, we must also strive to speed up the solution. For example, in order to meet the requirements of national environmental protection, in order to meet the market's demand for increasing production of medium and high-grade products, in order to reduce waste and increase labor productivity to reduce costs, the impact of forcing existing enterprises to accelerate adjustment and reconstruction may exceed 60%. In addition, compared with foreign peers, in 1998, the total output of paper and primary pulp in China was more than 40 million tons in Japan and Canada, 51,000 in Japan, and 65,000 in Canada, while there were more than 1.2 million people in China. Even if 700,000 people are laid off, labor productivity is still only one-tenth of them. Without such an impact, how can China's papermaking industry modernize and how can it face the competition in the international market? Therefore, from the perspective of the modernization and development needs of the industry, profits should outweigh the disadvantages. This understanding seems to be more in-depth and rational.
3. After China's accession to the WTO, the domestic paper industry needs to consider the countermeasures 3.1 In the face of the upcoming challenges and opportunities, the basic policy of China's paper industry should focus on comprehensively improving the quality and competitiveness of the company - high quality, low cost, High efficiency and clean production. It is necessary to mobilize positive actions from the entire industry by changing the operational management mechanism, adjusting the organizational structure, technical structure, raw material structure, and product structure of the enterprise. To encourage the development of joint ventures and private enterprises, it is necessary to study the WTO's rules of the game and international experience, and suggest that the government give the industry appropriate financial support and feasible policy protection within a certain period of time.
3.2 Actively promote the strategic restructuring of existing companies, optimize the organizational structure, and increase industrial concentration. To support and encourage a group of companies with strong strength and vitality, to achieve cross-regional, cross-sectoral, cross-ownership, cross-industry (such as forestry, packaging, etc.) joint mergers and acquisitions, vertical extension, diversification, etc. With low-cost, ultra-conventional, and high-efficiency development, the company has quickly established a number of powerful industrial groups (Shandong Chenming Group has started this exploration and can learn from it). Papermaking entrepreneurs should have a high degree of consciousness and urgency for institutional innovation. Institutional innovation will open the way for technological innovation.
3.3 Enterprises should pay attention to technological innovation and innovation and widen the road to development. Facing the market, faced with competition, focusing on quality, variety, cost, and environmental protection as the main goals, we made more investigations, made decisive and resolute decisions, and managed to avoid mistakes and strive for practical results. From the perspective of investment efficiency, the first paper after slurry, the more efficient use of waste paper and commercial pulp efficiency; small-scale advantages of small enterprises should pay attention to the development of new varieties and small batch varieties, in order to escape difficulties and survival.
3.4 Accelerated Elimination of Disadvantages Lagged behind productivity in favor of the growth of advanced productive forces and key assistance. China's paper industry must base its efforts on the fiercely competitive international market. Over-protection and backwardness will hinder the development of the overall industry. The elimination of the fittest is also an inevitable trend of development. Take Shandong as an example. In 1995, the province had 805 papermaking enterprises with a total output of 2.31 million tons. In 1999, it reduced to less than 200. In 4 years, it eliminated 3/4 of the total, but the total output rose to 3.53 million tons; The pollution has been relatively reduced, and several star enterprises have emerged with strong vitality and rapid development of production and benefits. Shandong is being developed from a papermaking province to a papermaking province.
3.5 Enterprises must be invincible in the increasingly fierce market competition and achieve smooth development. They will rely to a great extent on knowledge, technology, and high-quality management and technical personnel, rather than simply capital and material resources. Therefore, attaching importance to information and knowledge, emphasizing training and good use of talents, attaching importance to the combination of production, education and research, good decision-making, and decisive action will be one of the basic countermeasures for China's papermaking enterprises to adapt to the new situation, and it is also a group of star enterprises that can rapidly emerge in recent years. Basic experience.
3.6 Papermaking is a capital and technology-intensive industry. Joining the WTO to participate in international competition, both our capital and technology are at a disadvantage. Although relying on the strength of the industry itself, it is important to actively overcome difficulties. At the same time, it is still necessary to seriously study the relevant rules of the WTO and foreign experience to win the government's possible and appropriate financial and policy assistance so as to gain valuable time and accelerate the enhancement of competitive strength. .
3.7 Striving for the country to give priority to the papermaking industry, refer to Japan’s practices in the past for its machinery industry, increase the national bank’s low-interest and interest-subsidized loans to key enterprises and key projects, increase financial investment appropriately, and help solve the practical difficulties of developing funds. .
3.8 The WTO allows developing countries to have a higher degree of protection than developed countries. For example, if the average import tariff rate is now 4% for developed countries and 14% for developing countries, it also allows developing countries to align with WTO regulations. Its transition period can be extended to 4 to 8 years. Based on this, we can suggest that the government's reduction of the paper import tax rate, which has a severe impact on the domestic market, should be gradually reduced slightly to moderately reduce the pressure on the industry; there are also some minor minor species that have set original tax rates too high, such as Shenzhi. The (absurd paper) tax rate is as high as 40%, which is virtually unnecessary, and can be significantly reduced to lower the paper's average tax rate.
3.9 The WTO also has some exceptions. For example, in terms of foreign investment access, developing countries can make necessary provisions on the use of foreign capital and the proportion of use of foreign capital in accordance with the needs of their own economic development. According to the current papermaking industry policy, only a few projects such as banknote paper that foreign capital will not enter are limited. From the perspective of China's national conditions, there are actually some varieties, such as sanitary paper, thin papers of 32 g/m2 or less, which are more suitable

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