Chinese Printing Industry: Primed to Be Largest Market
Having returned recently from Beijing where I attended the International Media Week, patterned after the drupa format, I can tell you that the Chinese are no longer the student and could be considered the teacher.
More than 200 individuals from Europe, the United States and Asia attended the kick-off program to inform the printing and packaging world about the upcoming China Print 2013. Held in Beijing from May 14-18, the exhibition can now be considered one of the world's most important showcases of technology, blending the traditional printing methods alongside the digital offerings.
The program began on Jan. 8, which, according to the Chinese Lunar calendar, is the coldest day of the year—and it actually was the coldest day of the Beijing winter up to that point. But the cold weather could not distract the attendees from learning about how "hot" the Chinese printing industry really is!
The statistics are overwhelming: In 1978, the Chinese printing industry output value was only 4.8 billion RMB (6 RMB equals U.S. $1). 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 United States.
More startling data: There are more than 102,000 printing enterprises with over 3.5 million employees. Of these enterprises, 47,000 focus on packaging, with an output value of 632 billion RMB (20.5 percent annual growth rate); 6,800 focus on publication printing, with an output value of 131.3 billion RMB; and 48,000 serve other markets, with an output value of 106.4 billion RMB.
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, comprising less than 8 percent of the industry's total output. The annual growth rate for this portion of the market is 2.8 percent.
A few dark clouds appear on the horizon, as well. With rising labor and transportation costs, coupled with much lower labor costs in Vietnam, Thailand, Indonesia and Malaysia, Chinese printers are faced with increased competition for printing jobs that had 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 people.
The Chinese 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 more than 800 companies producing every imaginable product required for printing. China is a net importer of printing machinery manufactured abroad (12 billion RMB), while exporting less than half 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. Also, because the domestic market is so strong, 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 on 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 drupa 2012, more than 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 drupa 2016. The 2012 contingent of exhibitors made China the second largest country to exhibit and ranked them third in stand size. What a difference four 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 with 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 most populated country.
To see how these changes are and will occur, attendance at China Print should be on printing and packaging professionals' radar screen of key global events in 2013. For more information, visit www.chinaprint.com.cn PI
About the Author
Regis Delmontagne retired as president of NPES in 2005 following an almost 30-year career heading the U.S. trade association of suppliers to the printing industry. He also served as president of GASC, the producer of the Graph Expo and PRINT exhibitions. He currently serves as a consultant to several foreign firms, as well as to U.S. manufacturers and printers. He can be reached by e-mail at rdelmontagne@verizon.net.
