By Leo Quigley, AJOT As with most things in China, that country’s paper industry has changed dramatically in recent years, from thousands of small production units using wheat and rice residue as feedstock to large, modern paper mills using wood fiber. The shift from rice and wheat straw came in 2007 when the government announced it would order closure of small paper mills due to pollution concerns and, in the 1990’s, traditional mills with a paper capacity of roughly three million tonnes per year shut down. This was followed by an order in 1998 that declared a 10-year moratorium on logging following massive flooding that destroyed forests and years of destructive logging practices in the country. Together, these changes have meant that China can only provide about 28 percent of the raw materials needed to supply its growing paper industry and imports of pulp and recyclable paper are skyrocketing; supplied primarily by Canada, Indonesia, Russia, Brazil and the U.S. However, in an effort to overcome this shortage of wood fiber the government has plans to invest $8.65 billion on establishing tree plantations by 2015, including 5.8 million hectares for the pulp and paper industry. For example, China has about 1.65 million hectares of eucalyptus plantations and Guangxi province is one of China’s largest growers of eucalyptus and has more than 350,000 hectares of eucalyptus plantations in the region. As well, other companies are establishing new plantations in Guangxi province, including APP, Oji Paper, Sino Forest Group, Feng Lin, Gao Feng Group and Guangxi Plantation Development Company. In addition, several of the world’s largest pulp producers, including APP, Stora Enso and UPM, have said they have plans to develop huge hardwood pulp mills with associated large-scale plantations in southern regions of the country. While the bulk of these industrial plantations are being funded by Beijing, Australia is also developing a plantation in Guangxi that will add an additional 200,000 acres. However, even with these initiatives it will not be possible for China to supply the demands of its pulp and paper mills due to the fact that China’s massive population at present uses less paper per capital than the U.S. or Europe, but this is on the increase. And, even with less usage per capital China is already the second largest consumer of paper per person internationally, with the U.S. being the largest (It should be remembered that China re-exports much of its paper in the form of packaging for goods shipped out of the country.) China is also facing the dilemma of having to dedicate land for trees used for industrial purposes such as paper and lumber and not for food production. Several analysts believe that with the pressure for food by its huge population the country will never be able to supply its pulp and paper industry with sufficient wood fiber. Tom Brown of the Montreal-based Pulp & Paper Products Council told AJOT that China’s growing demand has meant that country is now the largest export market for North American pulp producers, having recently eclipsed Europe. In 2004 China imported 2,202,000 tonnes of North American pulp and paper that, by 2007 had grown to 3,036,000 tonnes and, by 2010, 4.206,000 tonnes. For pulp shippers, such as Squamish Terminals, owned by Grieg Star Shipping AS of Norway, the demand by China for pulp, together with other breakbulk such as steel and special project cargo, has meant a “roller coaster ride” according to President, Ron Anderson. The terminal’s primary breakbulk traffic is bales of pulp and roughly one million tonnes annually are put through the facility, located on Howe Sound, north of Vancouver. The terminal handles both kraft pulp and groundwood and ships primarily to Korea and China, not to the domestic Canadian market or the U.S. Most of the ships that load at the terminal are 20,000 dwt in size however; Anderson said they might see five or six smaller vessels in the 10,000 dwt category. Grieg Star Shipping owns a va