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Story Publication logo December 6, 2012

Paper Cuts: How China Took a Signature Industry from Wisconsin

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Faced with the devastating twin threats of digital and China, can a critical Wisconsin industry...

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Many western economics journalists who visit China want to see the same places.

Often it's Foxconn, the contract manufacturer that assembles iPads and iPhones (and provoked a worldwide backlash for its reported infractions of basic worker welfare). Or they visit other hot Chinese tech companies like TCL Corp. or Huawei Technologies Co. Or one of the scores of research universities and tech schools that are training the next generation of electronical component miniaturization engineers.

The Milwaukee Journal Sentinel took a different route.

We went to China to take stock of an industry as old as civilization and report on ink-on-paper technologies that are often deemed low-tech – or even no-tech.

But as analog and offline as paper might be, it doesn't lack for high stakes. The globalization of the pulp and paper industry, a phenomenon of the past decade, has heightened U.S.-China trade frictions, infuriated environmentalists and cast America's global competitiveness and innovation in a new light.

There is no question that China is the world's most dominant and disruptive papermaker. Its appetite for cellulose fiber is insatiable and its mills have all but cornered the world markets on pulp, timber and recycled paper. China is in the midst of the biggest investment boom the industry has ever seen.

At stake in Wisconsin are thousands of jobs that still depend on the production of publishing-grade paper, even this far into the digital age. The scale and anomaly of this quiet part of the Wisconsin economy is as staggering as it is unexpected, certainly after one starts driving north of Milwaukee or Madison, where the state becomes progressively more wooded.

Call it the cellulose economy. Throughout the last century, printing-grade paper mills spawned jobs by the thousands, employing three and four generations of families. The state's abundant forests and rivers, the main resources for paper making, also spun off tissues and paper towels and even carbonless transaction paper. But Wisconsin's publishing grade mills alone – which include books and magazines, but not newsprint – continue to produce 2.1 million tons of paper every year at 13 mills scattered across the state.

The mills managed one other feat. They spawned a sister industry of commercial printers with big names like Banta Corp., acquired in 2006 by R.R. Donnelley & Sons Co., and Quad/Graphics Inc., the biggest printer of magazines in North America. The state's printing plants employ an additional 23,000. The "Printing Impressions" trade journal has named Wisconsin the "Printing Capital of the USA" – creating an economy that's literally powered by ink on paper.

And yet the paper industry is all but unexamined, even in Wisconsin, the nation's biggest papermaking state. Partly that's because of the infatuation with touch screens and wifi. But paper is also ubiquitous to the point of being invisible. It never has a sexy brand image until the work of an author, magazine or advertiser is printed on it.

The industry did garner political attention this year in Wisconsin, although almost solely in the context of a closely fought race for a U.S. Senate seat.

And in that case, the issue of papermaking jobs came in handy for the victor, Democrat Tammy Baldwin.

Baldwin was not known for championing meat-and-potatoes economics issues over seven terms in the U.S. House. Much of her base lies in the university town of Madison. But she prevailed in close race against Republican Tommy Thompson, the former four-term GOP governor.

Baldwin wasted no time picking an issue to showcase in her first television ads: Chinese competition and Wisconsin paper mills. The ad underlines the sort of emotion that the paper industry still evokes:

"In Wisconsin, we lead the entire nation in paper industry jobs," Baldwin tells the TV camera. "But China, they lead the world in cheating. And it's costing us jobs in Wisconsin."

Join the conversation on this project on Twitter at #JSPaperCuts






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