China’s Printing Industry Under the 12th Five-Year Plan: Two Barriers on the Road to a Printing Powerhouse

Industry Brief:

Feng Fei, who heads the Industrial Economics Research Department at the Development Research Center of the State Council, notes that the 12th Five-Year Plan spans both a golden era for China’s economy and a period of sharpening contradictions. Tension between heavy chemical industry and the low-carbon economy is set to intensify, while faster urbanization will push the industrial structure into further adjustment. The printing sector, he suggests, mirrors that tension: a favorable operating environment paired with weak reform momentum among printing enterprises will define its central contradiction over the next five years.

The General Administration of Press and Publication’s five-year blueprint sets a target: by the close of the 12th Five-Year Plan, China should have made substantial headway in moving from a large printing nation to a strong one, with the goal of reaching powerhouse status ahead of schedule within news and publishing. Over the period, total printing output value should grow roughly in step with the national economy. National printing demonstration bases are to be built and refined, and a cohort of competitive printing enterprises cultivated. Green printing receives priority backing in primary and secondary school textbooks, government procurement items, and food and pharmaceutical packaging. Digital printing, digital workflows, CTP and digital management systems form the backbone of a push to spread digital technology across the industry.

Two hard problems stand between Chinese printing enterprises and their goals during the 12th Five-Year Plan — two chasms the sector must prepare thoroughly to cross.

Chasm one: industrial structure — the roadblock holding back the printing industry

Han Xiaoliang, a printing press expert in China, argues that what separates Chinese printing machinery manufacturing from large overseas manufacturers is neither product quality nor product technology, but production structure and product structure. China’s printing industry got off to a late start — the country’s first printing press manufacturer, the Beijing People’s Machinery Plant, only appeared in the 1950s — yet it grew fast, a result of an early path built on imitation, rapid product proliferation and price competition. That approach saved enormous R&D time up front but has proved problematic in later stages.

First, a narrow industrial structure and lagging product technology. Sustained imitation erodes independent innovation capability — that is the direct consequence. More companies now invest in technical innovation, yet China still trails advanced foreign technology by half a step. Much of the innovation work follows foreign technology pathways, with imitation remaining the core. Whether CTP or the green, low-carbon model, China is being led rather than leading, and no self-sustaining innovation system has taken shape.

Second, weak process integration. Chasing whichever machine sells best is a common failing among Chinese manufacturers: a plant producing printing presses one month may switch to post-press equipment the next. Many variables are at play, but the low level of product process integration is plain to see. Heidelberg illustrates the alternative — its Speedmaster line spans low-end to high-end as an integrated production flow, giving it strong resilience to shocks: in the 2008 financial crisis, Heidelberg took a heavy hit but its foundations remained intact.

Industrial structure therefore tops the list of what printing enterprises must overhaul over the next five years. How to break its grip on enterprise development is a question the industry has to answer.

Chasm two: building an environmental protection system — the second stumbling block

At its core, that system means advancing green development and steering the industry toward a green transition. Concretely, it calls for working with the Ministry of Environmental Protection to draft and improve green printing standards and to create a full-lifecycle standard framework covering raw material sourcing, printing production and post-use product recovery, gradually maturing into a relatively complete green printing management and standards system.

Since the 2009 Copenhagen climate conference closed, low-carbon environmental protection has become an obligation for individuals and businesses alike, and printing enterprises are no exception. Yet small and medium-sized firms make up nearly 80% of China’s printing industry, and they lack the capacity to build low-carbon systems. With thin working capital, they cannot develop environmental frameworks on their own and need a degree of policy support from the state.

Building competitive printing enterprises is a headline goal of the 12th Five-Year Plan, which makes an industry reshuffle within five years all but inevitable: a significant number of SMEs will face forced restructuring or acquisition. That should give China’s printing industry as a whole a strong push forward, but how to absorb the surplus labor created by mergers is a question for large printing enterprises and the state alike. Confucian teaching holds that “the people are the most precious; the state comes next; the ruler is the lightest.” If the ancients placed such value on the people, then over the coming five years of economic growth, managing surplus labor well deserves the same serious attention from both business and government.

——This article is reprinted from China Packaging Network (pack.cn); original link: http://news.pack.cn/show-362177.html