China’s economy grew steadily through 2018, with data from the National Bureau of Statistics showing GDP at 90.03 trillion RMB, up 6.6 percent from 2017 and exceeding the government’s growth target of 6.5 percent. In the first half of 2019, China’s GDP reached 45.09 trillion RMB, a year-on-year growth of 6.3 percent in comparable prices. The government’s Quarterly Macroeconomic Model (CQMM) predicts GDP growth in 2019 to be 6.3 percent, down 0.3 percent.
The latest data from the Label Printing Branch of the Printing and Printing Equipment Industries Association of China (PEIAC) shows that the gross output value of China’s label printing industry was 46.87 billion RMB in 2018, up 8.5 percent from 2017. Although lower than the industry’s historical growth rates, this is still higher than the global growth rate of 6.9 percent reported by AWA. The gross output volume of the adhesive label sector was 6.4 billion sqm, up 10 percent from 2017.
‘Internet +’ is the most important new technology model in the conventional label printing industry. There are two aspects to this. On the one hand, online shopping, driven by mobile internet technology, has propelled PS label growth in the logistics sector. The latest data from the State Post Bureau of China shows that the volume of express delivery in China was 50.7 billion parcels in 2018, up 26.6 percent from 2017. China has become the world’s largest consumer of express delivery parcels in five successive years. The value of the annual online retail sector is approximately 7 trillion RMB.
The possibilities opened up by a combination of internet technology and conventional labels has led to a surge in development of RFID labels and tags. The development of China’s Internet of Things had been incorporated into the government’s national development strategy since 2010, presenting the Chinese RFID and IoT industry with immense development opportunities.
Data from China’s RFID industrial alliance shows that the market value of the country’s RFID industry grew consistently between 2011 and 2018. In 2019, demand for RFID labels will continue to rise and the applications will cover an even wider range. RFID is already applied in many sectors including finance, mobile payments, city public utilities, transportation, medical and health, food safety and anti-counterfeiting.
Data from China’s Ministry of Industry and Information Technology shows that financial payment is now the biggest market for RFID applications, accounting for 27 percent of the total; next comes transport management (12 percent), military security (11 percent), identification (11 percent), public utilities (7 percent), warehouse logistics (6 percent) and asset management (5 percent). Apparel, medical, food and other applications are still in the early stages of development.
The Qianzhan Industry Research Institute predicts that the compound annual growth rate of China’s RFID market will remain at around 15 percent, and will break through the 200 billion RMB barrier in 2024. Labels and packaging are the delivering mechanisms for around one third of total RFID output.
Letterpress still dominates China’s label printing market. But with the increasingly strict environmental protection policies of the Chinese government, especially the environmental tax levied since 2018, and the increase in demand for short-run, personalization and customization in the end user market, flexo and digital printing are accepted by more and more printing companies and end users. It is predicted that flexo printing will soon account for 12-15 percent of the total output of China’s package printing industry.
The rapid growth of flexo in the label sector is driven not only by the impact of government environmental policies, but also by improvements in flexo press technology, substrates and inks from domestic suppliers. 2018 China’s Flexo Ink Industry Development report shows that the gross output of key ink manufacturers in 2018 was 755,000 tonnes, of which flexo ink accounted for 76,000 tons, or 10.06 percent.
According to the report ‘2019 Flexo Press Installations in China’ in Printing Technology magazine, there were 225 unit-type flexo presses installed in mainland China and put into operation between July 2018 and 2019, with narrow web flexo presses for label printing accounting for one third of the total. Of these 225 flexo presses, 198 were made in China – 88 percent of the total – and 27 were imported, or 12 percent. Domestically manufactured flexo presses now predominate in China’s flexo industry.
New trends noted above towards variable data and personalized labels and packaging have greatly benefited the digital printing sector, putting the technology firmly into the spotlight. But in China, it is still at an early stage of development. Many label converters have taken a good look at digital printing, but have not taken taken the plunge. This is mostly because they need to invest not only in digital printing presses, but also auxiliary pre-press software, production consumables, post-press and inspection, both hardware and software. They also have to consider how to give digital full play by implementing new marketing and management strategies.
Many have invested in digital of course. In 2019, label converters such as Super Label, Shanghai Gurong, Tianjin Xiangjiang and Shanghai Zhiqin installed their first digital presses.