（一）Pulp industry overview

1. Pulp product overview

Pulp is based on plant fiber as raw material, processed by different processing methods made of fibrous material, which in accordance with the source of raw materials, processing methods, processing, etc. can be divided into many sub-species, and can be widely used in paper making, man-made fibers, plastic , chemical and other fields.

2. The world pulp industry overview: stable production, active trading

Data show that global pulp production in 2015 reached 181 million tons, slightly less than 2014, 0.23%. North America, Europe and Asia are still the three regions with the largest pulp production, with output of 65.54 million tonnes (36.2% of global production), 45.58 million tonnes (25.2% of global production) and 39.716 million tonnes (from global production) Accounting for 21.9% of global production). Latin America grew rapidly, pulp production in 2015 25.376 million tons, an increase of 2.74%, accounting for 14% of global production, becoming the fourth largest pulp production area.

From the national point of view, the top five countries with the largest pulp production in 2015 were US (48.445 million tonnes), Brazil (17.226 million tonnes), Canada (17 million tonnes), China (16.833 million tonnes) and Sweden (11.87 million tonnes), the five countries accounted for the proportion of global pulp production as high as 61.2%.

(二) The status of China's pulp industry: production capacity is lower than the market demand, import dependence is high

Domestic pulp production can not meet consumer demand. Data show that in 2016 China's total pulp production 79.25 million tons, down 0.74% year on year. Among them, the total output of wood pulp was 10.55 million tons, up 4.03% over the previous year; the total output of waste paper pulp was 63.29 million tons, down 0.14% from the previous year; the total output of non-wood pulp was 5.91 million tons, which was significantly reduced from 13.09 %. The total amount of imported wood pulp is 18.81 million tons, the import dependence is 65.1%, and the import dependence is higher.

In 2016, China's total pulp consumption of 97.97 million tons, up 0.68% over the previous year. Among them, wood pulp 28.77 million tons, up 6.04% over the previous year; waste paper pulp 63.29 million tons, slightly lower than the previous year 0.14%; non-wood pulp 5.91 million tons, a substantial reduction of 13.09% over the previous year. From the pulp source, the consumption of wood pulp in the 10.55 million tons for the domestic, accounting for 34.93%, 18.81 million tons for imports (deducted from the dissolved pulp imports), accounting for 65.07%; waste paper pulp, domestic waste paper pulp 4021 Million tons, accounting for 63.53%, imports of waste paper raw materials pulp 23.08 million tons, accounting for 36.47%.

(三)  China's wood pulp dependence on the external high, and the relative concentration of imports

China's imports of pulp countries are more concentrated. China's imports from more than 30 countries and regions of pulp, the top ten countries accounted for more than 93% of the total. Of which Canada is the largest importer, accounting for 23%, and maintain high growth. Brazil, Indonesia is also the same growth rate, offset by the United States, Finland and other countries of the decline in imports, the overall import to maintain the rise.

Dependence on the existence of political risks (export political stability, etc.), trade risks (trade openness, exchange rate fluctuations, etc.) and transportation risks (transport distance, mode of transport) and many other risks. Although the overall risk of pulp imports in China as a whole, less volatile, but China's import dependence on the growth of the pulp industry is still a potential impediment to the development. These potential uncertainties for the impact of the domestic pulp industry will be through the amount and price of the two mechanisms of diffusion conduction, affecting the stable development of the industry.