Economy Rebounds — Can Packaging and Printing Follow Suit, and Where Do They Go from Here?

Among China's 666 finely divided industrial sectors, the packaging and printing industry, with a scale of 2 trillion [yuan], is closely related to 97% of those industrial sectors, making it arguably the industry with the greatest strategic depth among all walks of life.

Looking back on the development of the packaging industry over the past thirty-odd years, no matter how the international situation changes, the industry has always been able to find new growth points and ensure its steady development.

However, in the first half of 2023 after the pandemic was fully relaxed, the packaging and printing industry clearly faced unprecedented challenges: the simultaneous downward adjustment of exports and domestic demand, the multiplying effect of economic recovery in most industrial sectors falling short of expectations, and cutthroat competition among peers brought about by excessive capacity expansion...

Throughout January-May 2023, apart from infrastructure being the lone standout, China's economy was dragged down by the downward momentum of 2022 in exports and domestic demand, and remained in a process of bottoming out. The most prominent manifestation was the steady decline in demand, which directly forced upstream raw-material manufacturers to keep cutting prices. Whether white cardboard, containerboard, corrugated paper or plastic films, all were in a collapse-style decline.

Bringing our gaze back to the fog-shrouded packaging and printing industry: how will the market trend over the remaining half of 2023, and how should we accurately predict next year and beyond?

"World Economic Outlook": 2023 global economic growth forecasts

Let us look at the 2023 global economic growth forecasts published in the "World Economic Outlook"; we will help you tease out some ideas from these data.

As the leader of emerging markets and a new engine of the global economy, China is still favored by the global economic community. Its 2023 growth forecast is higher than that of 2022.

On June 6, the World Bank said in its latest "Global Economic Prospects" report that it had raised its forecast for China's 2023 economic growth to 5.6%, a marked increase from the 4.3% in its January "Global Economic Prospects" report and the 5.1% in its April "East Asia and Pacific Economic Update".

In addition, the "Global Economic Prospects" report also raised its forecast for US economic growth this year to 1.1%, and the euro area's growth forecast this year was raised to 0.4%.

Moreover, the OECD raised growth forecasts for some economies: it raised China's 2023 growth forecast to 5.4% and the US 2023 growth forecast to 1.6%.

It is not hard to see that the World Bank's economists are more optimistic about China's economy in the second half of the year, on the one hand because of China's accommodative monetary policy and on the other because of the strong resilience of the Chinese economy.

Therefore, we have reason to believe that the second half of the year will be a critical period for the economy to bottom out and rebound.

Where does the future lead, and how do we break through now?

After four decades of runaway growth, China's printing and packaging industry has reached an extremely important historical turning point.

Internet packaging can link the various entities along the industry chain to the same platform, and through informatization, big data and intelligence, achieve the optimal matching of packaging manufacturing, packaging-material supply, packaging design and customer orders, thereby providing customers with fast, convenient, low-priced, integrated quality services. "Internet Plus" is expected to reshape the competitive landscape of the printing and packaging industry; industry consolidation will also gain new momentum, and a grand industry alliance will become possible.

At the same time, the widespread application of digital and network technologies is driving printing technology to develop rapidly in a digital direction, and digital printing technology is becoming increasingly active in paper-based printing and packaging. As an entirely new printing technology that records digitalized text and image information directly onto the printing substrate, digital printing can fully match personalized and differentiated printing-packaging needs, and will gain broad room for development in the future.

At present, the digitalization and intelligent upgrading being carried out in full swing across all walks of life will help China smoothly cross the middle-income trap and achieve the transformation of old and new growth drivers and economic restructuring. In 2023, China is embracing a great opportunity for the nation's rejuvenation!

In the printing and packaging industry, some leading enterprises have made breakthrough progress in digitalization and intelligence.

At Yuto's smart factory in Xuchang, half of the workforce has already been replaced, and once mature it will cut manpower by two-thirds.

At Hexing's smart factory, large-scale, small-batch flexible manufacturing of cartons and color boxes is already very mature, capable of producing 2 million color boxes a day. Compared with the traditional process of offset printing + corrugating + mounting + die-cutting + stitching/gluing, its efficiency is on a completely different level.

At the Zhongshan Zhongrong smart factory, which focuses on cartons, more than 2,000 product types are delivered every day, with more than 8,000 semi-finished-product turnovers and more than 30,000 kinds of new and old materials moving in and out — yet such a huge logistics operation has basically achieved unmanned operation.

In the production workshop of Hucai Printing, a worker gently presses a button, and in about a minute three exercise books transform from electronic form into physical books, streaming out continuously. Flipping open two at random, the content of each book's error-collection section at the back is different. The "custom-made" error collections for 5,000 students take about 24 hours to produce and are delivered within 48 hours.

As the smart factories of the major leading printing and packaging enterprises replicate rapidly from 1 to N, the dimensionality-reduction blow faced by traditional enterprises will become ever more obvious; many enterprises will have to withdraw from the competition, aging employees who cannot master digitalization and intelligence will reluctantly retire early, and the Gen Z young people who grew up steeped in the internet will become the backbone.

——This article is reprinted from China Packaging Network (pack.cn), original link: http://news.pack.cn/show-379363.html