China Packaging Revenue Tops 1 Trillion Yuan in 2020 as Green Upgrading Gains Momentum

I. Packaging Industry Performance

In 2020, above-scale enterprises in China's packaging industry recorded sales revenue of 1,006.458 billion yuan, up 0.32 percentage points year on year. Across segments, paper and paperboard container manufacturing posted cumulative main business revenue of 288.474 billion yuan, down 2.53% year on year; plastic film manufacturing, a key area for flexible packaging, reached 275.435 billion yuan, down 0.55%; plastic packaging boxes and container manufacturing totaled 158.462 billion yuan, down 2.49%; and metal packaging containers and materials manufacturing generated 108.326 billion yuan, down 7.84%.

Packaging processing special equipment manufacturing achieved cumulative main business revenue of 81.056 billion yuan, up 21.05% year on year. Glass packaging container manufacturing reached 57.679 billion yuan, down 1.8%, while cork products and other wood products manufacturing recorded 37.025 billion yuan, down 6.71%.

Source: China Packaging Federation, compiled by Huajing Industry Research Institute

Source: China Packaging Federation, compiled by Huajing Industry Research Institute

Between 2015 and 2020, the number of above-scale enterprises in China's packaging industry—defined as all industrial legal-person enterprises with annual main business revenue of 20 million yuan or more—rose steadily. This points to more players entering the market and increasingly intense competition. According to the China Packaging Federation, China had 8,183 above-scale packaging enterprises in 2020, 267 more than in 2019.

Source: China Packaging Federation, compiled by Huajing Industry Research Institute

II. Packaging Paper Industry Status

By packaging material, the industry is divided into paper packaging, plastic packaging (including plastic film), metal packaging and glass packaging. Paper packaging has long held a leading position within the packaging sector.

Data from the China Paper Association shows that packaging paper output in 2020 was 7.05 million tonnes, up 1.44% year on year, while consumption was 6.99 million tonnes, down 0.3%. Overall, domestic packaging paper still relies to some extent on imports.

Source: China Paper Association, compiled by Huajing Industry Research Institute

Source: China Paper Association, compiled by Huajing Industry Research Institute

Related report: 2021-2026 China Packaging Industry Market Supply and Demand Pattern and Industry Prospect Outlook Report, released by Huajing Industry Research Institute

In 2020, the COVID-19 pandemic kept people at home for extended periods, and many turned to online shopping for idle goods, driving a rapid rise in China's packaging paper consumption. Because domestic output could not meet demand, imports helped fill the gap. China's packaging paper imports surged by 55% in 2020, while exports also continued to rise, with a 12.5% increase that year.

Source: China Paper Association, compiled by Huajing Industry Research Institute

Source: China Paper Association, compiled by Huajing Industry Research Institute

III. Key Characteristics of China's Packaging Industry

1. Technical barriers are low, product differentiation is limited, and competition is relatively full. China's packaging industry is fully open for business and is encouraged by the government, with few restrictive measures and relatively easy capital entry and exit. Competition is fierce, enterprise scale varies widely, and industry concentration remains very low.
2. Packaging companies are mainly concentrated in large and medium-sized cities and economically developed coastal areas in eastern China. Multinationals also tend to establish factories in developed regions first before gradually expanding inland. A region's packaging industry development is directly linked to its economic level, because packaging serves other manufacturing sectors and depends heavily on their growth.
3. Technical talent is scarce and innovation capacity remains insufficient. Packaging companies need to increase upfront investment in technical transformation, encourage innovation, attract funding from multiple sources, expand production scale, raise production concentration, and carry out technical upgrades required for circular and cleaner production. This would help them respond to national macro-control under the scientific development concept and improve market competitiveness. It should be an urgent priority for China's packaging industry.
4. Price competition remains the main tool, while brand competition is not yet prominent. Since packaging product quality differences are small, and market segmentation is deepening, competition is increasingly focused on brands and often plays out through price wars. However, the industry still lacks an absolutely dominant leading brand.

IV. Green Upgrading Measures for the Packaging Industry

1. Improve policy incentives

First, increase support for the green transformation and upgrading of packaging enterprises, reward the adoption and promotion of green packaging materials and technologies, and incentivize merchants and express delivery companies that reuse packaging products. Second, support R&D in common key technologies such as green design, green recycling and renewable raw material use for packaging products. Third, accelerate an exit mechanism for non-environmentally friendly packaging and gradually achieve comprehensive green packaging. Fourth, use government green procurement, green taxation and green finance to speed up the adoption of green packaging products, technologies and services.

1. Strengthen standards and regulations

First, refine and enrich packaging standards across categories and specifications, raise energy-saving, water-saving and material-saving indicators and measurement requirements, and accelerate the revision of standards for energy consumption, water consumption, carbon emissions and cleaner production to improve standardization for green development. Second, speed up green design evaluation standards for express packaging materials and products, and continue to release lists of green design packaging materials and products. Third, formulate management measures for recycling and disposal of packaging waste, especially express packaging waste, and improve standards and norms for packaging waste recycling and disposal as well as group standards in extended producer responsibility. Fourth, accelerate revisions to relevant provisions of the Cleaner Production Promotion Law and Circular Economy Promotion Law, add mandatory clauses, and recommend basic research on special packaging legislation by drawing on international experience and considering relevant packaging regulations.

1. Expand green product supply

Support express packaging companies in adopting green design, including simple, reduced, reusable and refined green design technologies, and in designing and producing green express packaging products to promote green upgrading in the express packaging industry. Support packaging companies in developing, applying and promoting new green packaging materials, gradually prohibit the production of non-degradable ultra-thin plastics and other packaging materials, and promote degradable tape, eco-friendly fillers, renewable paper, and packaging items printed with eco-friendly inks and other auxiliary materials. Also increase R&D in green and intelligent packaging technologies, equipment and processes to expand and upgrade the supply of green packaging products.

1. Build green supply chains

Support packaging companies in green design, selecting green materials, adopting green technologies and processes, and properly recycling and disposing of waste packaging products to achieve green environmental protection throughout the packaging product life cycle. Encourage downstream companies and merchants to choose green packaging products, thereby driving green development in upstream packaging materials, packaging design and packaging manufacturing. Select suitable packaging product categories, such as paper packaging products and plastic products, to encourage packaging companies to implement extended producer responsibility and improve packaging waste recycling and disposal systems through reverse logistics.

—This article is reposted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-379433.html