In Paper and packaging markets in China, the firm urged caution for those considering the Asian market as a potential investment platform.

"The opportunity is there, but only to succeed where some have failed," said PwC global forest and packaging leader Robert Barnden. "Companies need to be meticulous in assessing the risk and reward equation."

China is currently the world's second largest market for paper and paperboard, with sales of more than 11.3bn ($20bn) per year.

Paper consumption is set to grow by 30% to 70m tonnes per year before the end of the decade. Packaging is forecast to double by 2008 to a value of 28bn.

Barnden said that paper and packaging companies looking to invest or grow in the region needed to take a close look at how domestic companies operate.

"They should go into China with their eyes wide open to the differences in what should be seen as a series of markets," he said.

Chinese paper demand
- 54.4m tonnes of paper and paperboard used in 2004
- Annual growth 13%, compared with 2-3% in Europe
- Nearly 25.8bn newspapers, 2.7bn magazines and 6.5bn books published last year