Rising paper price in China to impact the world book industry

  • China is deeply embedded in the international book market, publishers in the United States and Europe are turning to Chinese printers to churn out books, reducing their costs by up to 30 percent.
China is credited as the first country to invent paper, believed to have been around the 2nd century

BEIJING — For Chinese fans, the latest Harry Potter book is not so affordable. Neither are the latest Dan Brown novels and classic Chinese fiction.

Voracious demand for books and a crackdown on small, polluting paper mills have caused a paper crunch in China, pushing up the price of paper by 10 percent so far this year and forcing printers to delay books and publishers to raise prices.

So far the problems have been largely confined to China, but experts say that if the trend is unchecked, publishers worldwide could find themselves paying higher costs — and consumers facing higher book prices.

The Chinese paperback translation of the "Harry Potter and the Deathly Hallows," the seventh in the series, sells for 66 yuan (US$9 or €6), more than twice the price of its predecessors and a slice out of disposable income that in cities still averages less than 1,200 yuan (US$165 or €120) a month.

"This one is too expensive if you want to buy the whole series," sniffed 21-year-old university student Li Jie as she browsed at a central Beijing bookstore, "especially for a student."

China is deeply embedded in the international book market. It is the United States' biggest offshore supplier of print products, chiefly books. Exports of paper products from China rose by 76 percent between 2005 and 2006, according to government statistics, and are projected to rise a similar amount by the end of the decade.

Like many manufacturers, publishers in the United States and Europe are turning to Chinese printers to churn out books, reducing their costs by up to 30 percent, according to Pira International, a research and consultancy firm specializing in the print and paper industries.

As a result of these trends, Chinese printing companies are cutting a visible presence at world book fairs.

"The main reason is price, and the other is quality," said Stephanie Chen, a sales representative for southern-China based Hengyuan Printing Co., who attended the most recent Frankfurt book fair, a major get-together for the world's publishing industry. China will be a special guest at next year's gathering.

As international and domestic demand for Chinese paper grows, the government is shutting down small paper mills to clean up the environment and force consolidation in a fragmented industry.

"The closures in China will tighten the demand" in China and lift the price of paper worldwide, said Sandy Lu, an economist for forest products industry group RISI in Shanghai.

Penguin UK, a British book publisher, spends about 60 percent of its manufacturing budget in China, a shift that created savings of 20 percent to 50 percent three years ago when it first moved here. Those savings have provided a cushion that the company says will allow the publisher to avoid raising prices — for now.

"Inflationary pressures will bite eventually but we have huge volumes and a broad supplier base," Liz Allen, Penguin's production director in London, said in an email. She said cost inflation will not be "a significant problem for some time to come."

China is credited as the first country to invent paper, believed to have been around the 2nd century, before it was spread to the Arab world along the ancient Silk Road and then on to Europe centuries later.

But the industry has relied on straw and other waste from crops to make paper, not the wood pulp used in the West. But crop and straw waste is highly polluting and not as easily recycled as wood pulp.

Paper mills, most of them small, inefficient operators, accounted for 17 percent all industrial water pollution in 2005, according to the Chinese Paper Association, an industry group.

In a bid to clean up China's rivers and spur the paper-making industry to consolidate and modernize by using wood pulp, the government has closed down hundreds of mills and targeted hundreds more for shutdown between 2006 and 2010. In March, the government closed 234 mills alone around severely polluted Dongting Lake, in central China.

The restructuring is spurring heavy demand for wood pulp, nearly all of which China must import. As it does, worldwide prices for pulp could also rise, creating cost pressures for publishers worldwide, said RISI's Lu.

With material costs rising and paper shortages disrupting publishing schedules, Chinese publishers said book prices had to rise.

The development shows that taking steps to clean up the environment often does raise prices for consumers.

When Li Ying, a television writer and editor, went to buy a copy of the classic Chinese novel "Family," he was shocked to find it cost 40 yuan (US$5.40 or €3.70), nearly twice what he expected to pay. A 1996 edition sells for less than half online.
People's Literature Publishing House hiked prices for Dan Brown's novels 20 percent since 2004, selling "Deception Point" for 29 yuan (US$3.90 or €2.70).

When People's Literature raised the cover price of the latest Harry Potter installment, fans of the series complained, said an employee in the publishing section who would only give his surname, Wu.

Hu Lichang, a construction worker in Beijing, hunted for bargain copies of the latest Harry Potter book at a recent Beijing book fair before finding a discounted volume for 50 yuan (US$6.75 or €4.90).

"But even that was expensive," he said.

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