The Chinese Paper Trail

Chinadaily.com ran a story a couple of weeks ago titled “China Wages War on Piracy”. As you would expect “Pirates and bootleggers in China produce 120 million counterfeit audio and video products” a year and cause all sorts of havoc for record and movie companies. What was a surprise to me is that these pirates also publish “500 million unauthorized books a year”.

For a little perspective, that would be almost 3,000 copies of each of the 172,000 new books that were published in the U.S. in 2005

Liu Binjie, vice director with the General Administration of Press and publication, said “the rampant piracy of audio and video products and books has seriously affected China’s international reputation and future investment prospects”.
Binjie also acknowledges that “book piracy has left publishers and distributors…in a very unfavorable position”.

You had to figure something was going on for the government to publicly make such a statement. It is the first time I have heard of anything affecting “investment prospects” in China.

and then today –presto!

The NYT has a story “In Big Shift US Imposes Tariffs on Chinese Paper”

The Bush administration said “it would reverse more than 20 years of American policy and impose potentially steep tariffs on Chinese manufactured goods on the ground that China is illegally subsidizing some of its exports.”

Looks like paper is first up. Two Chinese makers of high-gloss paper have been hit with immediate tariffs, one at 10.9 % and the other 20.4 %
Only 5% of the high-gloss paper we use currently comes from China. The paper is mostly used for brochures, catalogs, annual reports, movie posters etc.

Obviously China has a “strong objection” and “urges the U.S. side to reconsider the decision and reverse it as soon as possible”

Of course this “new policy could lead to duties on imports of Chinese steel, plastics, machinery, textiles and many other products”.
Which could lead to a trade war, which could lead to a balancing of the playing field, which could lead to a resurgence of American manufacturing, which could lead to…