Commentary & Analysis
Take a New Look at China’s Printing Industry
By Regis Delmontagne
Published: March 1, 2013
I recently returned from Beijing where I attended the International Media Week at which more than 20 overseas media representatives from the U.S., UK, Germany, Italy, Denmark, Russia, India, Korea, UAE, Myanmar, Indonesia, Malaysia, Philippines, China, Hong Kong, Taiwan and Macau spent their time learning about the great strides of the China printing industry and the upcoming CHINAPRINT.
Also attending were over 150 individuals from the printing industry, government officials, leaders of printing and packaging associations, as well as leading exhibitors, some of whom commented on their participation in Asia’s largest printing exhibition.
The program began on 8 January 2013, which according to the Chinese Lunar Calendar is 27 November and also is the coldest day of the year, and it actually was the coldest day of the Beijing winter up to that date. The cold weather could not distract the attendees from learning about how “hot” the Chinese printing industry really is! The statistics are truly overwhelming: In 1978 the Chinese printing industry output value was only 4.8 billion RMB (6 RMB equals U.S.$1.00) by the end of 2011 that number had reached 868 billion RMB which, by the way, makes China the second largest printing market in the world, after the U.S.
More startling data: There are over 102,000 printing enterprises with over 3.5 million employees. Of these enterprises, 47,000 focus on packaging (46% of total) with an output value of 632 billion RMB (72% of total) with a remarkable 20.5% annual growth rate; 6,800 focus on publication printing (6.8% of total), with an output value of 131.3 RMB (15% of total) and a 0.94% annual growth rate; 48,000 focus on other printing markets (47% of total) with an output value of 106.4 RMB (12% of total) and a 15% annual growth rate.
Contrary to what many people may believe, not everything we see printed comes from China. For example, in 2011, the output value of exported printing products was 68 billion RMB taking less than 8% of the industry’s total output. Annual growth rate for this portion of the market is 2.8%. A few dark clouds appear on the horizon; with rising labor and transportation costs, much less labor costs in Vietnam, Thailand, Indonesia and Malaysia, Chinese printers are faced with increasing competition for printing jobs which almost automatically flowed their way. Competition, or what you may call exceptionally competitive pricing, means the Chinese industry can no longer look to a Western market to increase their bottom lines. The domestic market is where they must compete.
What is occurring, along with similar changes in the country, is increased domestic demand for almost everything produced in China. This change in the printing industry is exactly what the planners in the Ministry of Economics think need to happen in a country of over 1.3 billion.
The printing machinery manufacturing industry is huge by any standard of measurement. While many are small to mid -size, similar to almost every other country, there are over 800 companies producing every imaginable product required for the printing process. China is a net importer of printing machinery manufactured abroad (12 billion RMB) while exporting less than half in RMB to other countries, i.e., India, Russia, and Southeast Asia. One of the major reasons Chinese exports of printing machinery have not reached high numbers in the West is the fact that many of them have not established strong distribution and service facilities and the other reason is the domestic market is so strong that it currently absorbs domestic production. According to the government, the 800 or so manufacturers’ total output value is about 40 million RMB. Chinese printers are demanding high quality products, which are currently filled by foreign manufacturers but the emphasis is developing domestic suppliers or acquiring foreign firms such as, Goss, Akiyama and Shinohara.
The presence of the Chinese printing manufacturing industry is being noticed in the global printing family. For example, 20 years ago one or two Chinese companies may have been among the exhibitors at drupa. Times have certainly changed; at drupa2012, over 280 companies from China exhibited occupying a total show area of 11,000 square meters. This figure doubled from 2008 and even more may be present at drupa2016. The 2012 contingent made China the 2nd largest, by country, to exhibit and ranked 3rd in stand size. What a difference 4 years makes.
China has become a country with a huge printing market and it is still growing. Its transformation into a world class manufacturing industry and world class printers is still evolving. As the cultural and creative areas of Chinese society start booming, the printing industry will have a new opportunity. More affluent Chinese will demand top quality products of all kinds and the packaging market will take the lead in creating a huge incentive for companies striving to reach these “well off” Chinese consumers.
In contrast to most of the Western World, the printing industry in China is primed to be the world’s largest print market in the next several years. While magazines, books and newspapers are in a state of decline in the West, the exact opposite is true in the world’s largest populated country.
To see how these changes are and will occur, attendance at CHINAPRINT, 14-18 May 2013 should be on printing and packaging professionals’ list of must see events in 2013. Attend and see first- hand the eye opening challenges and opportunities in this welcoming country. For more information go to: www.chinaprint.com.cn