China, the world's second-largest paper consumer after the United States, plans to plant 5 million hectares worth of fast-growing trees within 10 years to meet its increasing demand for papermaking resources.

The forest bases will be mainly located in eastern and southeastern China, where wet weather is likely to make trees grow quickly.

The program, approved by the State Council recently, will help restructure China's paper-producing sector, said Liu Tienan, the National Development and Reform Commission official in charge of the industry.

The program will partly change the situation in which China has heavily relied on imports in the sector, said Liu, whose commission is responsible for offering the country's economic development plans and monitoring their implementation.

Now, nearly 94 percent of China's wood pulp is imported from other countries, but within 10 years the import rate is likely to be reduced to 85 percent.

Liu also said that the planned forests will not infringe upon arable agricultural land and will mainly cover up unused land considered suitable for fast-growing trees.

"On the contrary, the programs can absorb surplus laborers into planting trees and producing paper," said Liu. "The scheme is useful for increasing the income of rural laborers."

At yesterday's press conference organized by his commission, Liu said that China will introduce an international model in the program, allowing paper businesses to invest in tree-planting.

"This is a new practice for China, but it is quite popular in the world's paper-making sector," said Liu.

He said the government will step up packages to encourage both foreign and domestic enterprises to invest in planting trees and producing paper at the same time.

The initiative has already been backed by the Finnish UPM-Kymmene Group, one of the world's largest papermakers, which is looking into investing further in the country, said Liu.

"The group will invest in planting fast-growing trees soon," Liu said.

Cao Pufang, executive vice-president of the China Paper Association, urged investors to take advantage of these opportunities because of the country's mounting demand.

The increase in demand for paper products will continue to outpace that of production during the period because of the country's rapid economic growth, Cao said.

Since 1999, China has become the world's second-largest paper consumer and domestic demand is expected to rise to 50 million tons in 2005 from 47 million tons last year, Cao said.

She estimated that the paper demand in China will outpace 70 million tons in 2010.

The funding shortfall was the biggest factor hindering increased output, although there had been an average annual investment of 10 billion yuan (US$1.2 billion) in the sector in recent years, said Cao.

"The sector will open wider to foreign and domestic private investors to obtain more funds," Cao said.

(China Daily February 18, 2004)