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IFC Study Provides Roadmap for Sustainable Development of China’s Non-Wood Pulp and Paper Industry

In Beijing
Wenqin Zhu                                                        
Phone: +86 10 5860 3130                                

In Hong Kong
Andrew Mak
Phone: +852 2509 8110

In Washington, D.C.
Carmen Powell
Phone: +1(202) 473-4982

Beijing, October 27, 2006 — China’s non-wood pulp and paper industry can help meet the country’s growing wood deficit and secure millions of jobs in rural areas, according to the findings of a new study released today by the International Finance Corporation.

The study sets out a course of sustainable development for China’s non-wood pulp and paper industry, which has been under threat in recent years because of the damage non-wood fiber mills cause to the environment.  The study concludes the main part of a $1.45 million IFC technical assistance project funded by the Finnish Ministry of Trade and Industry.  It recommends modernization of the industry by implementing new pulping and chemical recovery processes and technologies, which will reduce pollution and significantly lower the consumption of energy and water. These advances will safeguard millions of jobs in rural areas and mitigate the shortage of domestic sources of wood for China’s economy.

“We are very pleased to make major progress in addressing China’s fiber shortage.  Developing the non-wood fiber sector will not only help solve this shortage, but will also fit well into our strategy for social and environmental sustainability. We will follow up on this technical assistance to support investment projects in the sector,” said Dimitris Tsitsiragos, IFC’s Director for Global Manufacturing and Services.

Developing and modernizing the non-wood pulp and paper industry will be an important step toward helping China narrow its wood deficit. At the moment China imports most of its wood fiber due to the lack of domestic sources. But the country has abundant and underutilized non-wood fiber resources, including straw, reed, bamboo, and bagasse, and the available straw alone would be sufficient to eliminate all fiber imports.  Although non-wood pulp and paper represents 60 percent of pollution caused by China’s pulp and paper sector today, it is also an important source of employment, sustaining the livelihood of some 8 million people.

“We are very excited about this project, because addressing China’s wood deficit issue would help ease the strains on its neighbors’ resources. We plan to pursue similar initiatives across the region and around the globe,” said Richard Ranken, IFC’s Director for East Asia and the Pacific.

The technical assistance project was assisted by two leading Finnish consulting firms, Savcor-Indufor and Poyry Forest Industry, as well as the China Paper Association and the China National Pulp and Paper Research Institute. The project team is preparing a conclusion paper and making recommendations to help the Chinese government implement an appropriate policy to support the sector.  

About IFC

The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries.  IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments.  From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries.  With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services.  For more information, visit