Trade Dispute Turns into Smart Globalization and Strategic Planning
December 24, 2020

December 24, 2020

Rick Foristel, Director of Webster University China


During the last Webster China MBA Study Tour in 2019 at Washington, D.C., Shanghai, Chengdu and the rest of China started sorting trash and other discarded items in a very systematic way. If you live Shanghai or Chengdu, you know household trash sorts into four separate streams of waste.


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China MBAs at U.S. Congress briefing trade and economics.


The Beijing government stopped the flow of trash from other countries to be recycled in China. Some companies in China grew and flourished by recycling from the old and creating new commodity products including both paper and plastic.  


In the U.S. the Scrap Recycling Industries in Washington, D.C. told both Washington, D.C. and Beijing they were suffering a loss of approximately $5 billion of revenue from the decision to ban trash coming into China. The U.S. companies were collecting trash, sorting items, and then shipping to China for more complete recycling. From paper to plastics to metals, recyclers lost their largest market.  


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2019 Washington Study Tour members a the Scrap Recycling Industries Association at their D.C. office.


Members of the 2019 China MBA study group met with senior staff at the offices of Scrap Recycling Industries, a trade association and lobbying group. Speaking for their thousands of members the Recycling representatives told the visiting China group,“it is unfair, abrupt and it's a non-tariff barrier. Foreigners are not allowed to trade in China.”


One of the visiting China MBAs retorted,“China doesn't want to be a trash dump for the rest of the world.”  


Nine Dragons Paper Buys Closed Main Paper Mill


This week, the New York Times published a story about the China company, Nine Dragons Paper and its purchase, renovation of pulp mill at Old Town, Maine. The China company used to buy scrap paper from abroad and used it for the key ingredient in their product lines – cardboard boxes and other corrugated products. Old Town is surrounded by forests and the mill can turn wood to pulp, and then ship to China.   


The Times article, "A Maine Paper Mill’s Unexpected Savior: China," profiles the CEO and Chairwoman, Zhang Yin, who heads-up the corrugated products company. The company started in 1995, listed in the HK stock exchange in 2006.  Nine Dragons U.S. arm is known as ND Paper, and now operates three paper mills in the U.S.  


Nine Dragons response to need for essential raw materials was very strategic. They knew they had demand for finished products in China and elsewhere in Asia, and supply was very limited. The pulp plants they bought were in areas where there is natural resources and enough human resources to run the plant operation. Because Nine Dragons bought existing plants, there were enough infrastructure to assure they could get pulp out of the factory and on its way back to China.   

 

 

 

 

 


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