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Subsidies to Chinese IndustryState Capitalism, Business Strategy, and Trade Policy$
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Usha C.V. Haley and George T. Haley

Print publication date: 2013

Print ISBN-13: 9780199773749

Published to Oxford Scholarship Online: May 2013

DOI: 10.1093/acprof:oso/9780199773749.001.0001

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No Paper Tiger: Subsidies to China’s Paper Industry

No Paper Tiger: Subsidies to China’s Paper Industry

(p.96) Chapter 5 No Paper Tiger: Subsidies to China’s Paper Industry
Subsidies to Chinese Industry

Usha C. V. Haley

George T. Haley

Oxford University Press

This chapter covers $33.1 billion in subsidies to China’s paper industry from 2002-2009 and effects. Since 2000, China tripled paper production, and in 2008, became the largest producer of paper. The industry has no economies of scale or scope and is geographically fragmented, operating in 30 provinces. With among the smallest forest bases, China is the largest importer of major inputs, pulp and recycled paper. Labor is 4 percent and imported recycled paper and pulp about 35 percent of production costs. Yet, Chinese paper is much cheaper than U.S. or European paper. Governmental policies have aimed to reduce China’s dependence on imported raw materials and to subsidize the paper industry’s restructuring. Subsidies measured include: from 2002-2009, for electricity $778 million, coal $3 billion, reported subsidy income $442 million and loan-interest subsidies $2 billion; from 2004-2009, for pulp $25 billion; and from 2004-2008, for recycled paper $1.7 billion.

Keywords:   Chinese subsidies to paper, Chinese policy, subsidies to coal, subsidies to electricity, subsidies to pulp, subsidies to recycled paper, paper industry, paper exports, paper imports, loans

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