The Reach Of Solving Excess Capacity In China Paper Industry

China paper industry grows rapidly since 2000. China has become the biggest paper making country after 2008 with the great boost of paper consumption per capita. During the development, some phenomenon also came forth. Excess capacity is one of the typical problems.Excess capacity existed in other industries as well, such as steel and aluminum. Excess capacity usually goes with excessive competition and is likely to make the whole industry come into depression. Therefore it would be quite meaningful to enterprises and government that we can be aware of this problem earlier and take proper action to control or reduce the excess level.This article has used some theoretic and demonstration researches on excess capacity for reference. And try to evaluate paper industry by some quantitative indexes. Though this process, we can cognizance that there is certain level of excess capacity existing in China paper industry. After analyzing effectiveness of the policy on washing out behindhand capacity, it is found that we cannot solve the problem of overplus only by this policy. According to experience of other industry and other countries, mergers and acquisitions is a more effective method to solve the excess capacity in paper industry.