Paper Industry Issues First "Anti-Involution" Initiative – Supply-Side Consolidation Expected

The Guangdong Paper Industry Association released the "Initiative on Promoting High-Quality Development in Guangdong's Paper Industry Through Anti-Involution," marking the first such proposal in China's paper industry. It calls for resisting disorderly low-price competition, maintaining fair market order, and rejecting below-cost dumping or unfair practices to secure subsidies or market share.

In late July, major paper producers like Nine Dragons Paper, Lee & Man Paper (Jiangxi), and Hubei Rongcheng Paper announced another round of price hikes for corrugated paper and recycled kraft paper, effective August 1, citing rising costs. Since July alone, Nine Dragons has raised prices four times, following three earlier waves of increases in March–April, May, and July this year.

Guotai Haitong Research noted that since 2021, the industry has seen rapid capacity and player expansion, record losses, and profit lows. Coupled with stricter energy consumption standards effective May 2025 (extending to auxiliary production systems and raising compliance costs for outdated capacity), this could drive a new round of supply-side consolidation.

Per CLS Theme Library, key listed firms include:

• Guanhao High-Tech (Zhanjiang, Guangdong): Specializes in R&D and production of specialty papers (e.g., thermal, sublimation transfer) and new materials.

• Songyang Resources (Shantou): Focuses on eco-friendly recycled paper, operating a closed-loop value chain from waste paper recycling to coated paper production.