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| Slowdown in China – a threat for Southeast Asian Tissue Markets?  By almost all indicators – production, demand and potential consumption levels – the Southeast Asian tissue markets are booming. However the spectre of the Chinese slowdown hangs over these markets, threatening future growth. In this latest Point of View, Pöyry looks at how real the China threat is.A new Pöyry Point of View report highlights that, while there are intra-regional differences, taken collectively the Southeast Asian tissue markets represent a growth region. With current tissue production at 1 million tonnes per annum (when including Taiwan and Hong Kong), growth in demand at 6.5% on average and the potential for accelerating consumption levels, the fundamentals for continued expansion are in place. The Chinese tissue market has also witnessed strong growth. It is now the world's second largest market after the U.S., and has grown at 8% per annum over the last ten years. However, the Chinese economy is undergoing a deep structural shift as it moves from an economic model based on investment and exports, to one based on domestic consumption and services. The resulting economic slowdown, which the Chinese government has termed the 'new normal', is impacting a host of domestic industries, including the country's tissue market. 'Slowdown in China – a threat for Southeast Asian Tissue Markets?' looks at how significant the threat from China poses to Southeast Asian tissue markets. The piece highlights that while some Southeast Asian countries will experience at least temporary pressures, as overcapacity spills out of China, in the long run the economic transition in China may actually prove beneficial for neighbouring markets. Author of the report and Pöyry Consultant Pirkko Petaja said, "While overcapacity in China's tissue market remains a serious problem, the issue is likely to be felt more by some Southeast Asian markets than others, such as Indonesia which competes with Chinese exports to the region. Other markets with no domestic production, such as Hong Kong and Singapore, are less likely to feel the pressure. In the long-term the structural changes taking place in China will ease overcapacity and lift the pressure on Southeast Asian markets. As the Chinese middle class continues to grow and consumption takes a greater share of China's GDP, tissue trade flows may actually start to move towards, not from, China. In combination with new projects such as the Silk Road initiative, which are strengthening distribution and transportation networks, the future looks bright for Southeast Asian tissue markets." write your comments about the article :: © 2015 Construction News :: home page |