Moreover, while machine-produced paper looks similar to the handmade product, it deteriorates quickly, so calligraphers and painters don't use it for serious work.

Both Yang and Zhu's workshops produce about 50,000 sheets of paper a year, while Li's workshop, which employs about 30 workers to operate machinery, has annual output of about 50 million sheets.

However, while Li's business generates annual sales revenue of 20 million yuan ($3 million), he rarely makes a profit because he sells wholesale at low prices and the cost of raw materials has soared.

By contrast, Zhu's workshop has annual sales revenue of 600,000 yuan but he makes a net profit of about 150,000 yuan because his operating costs are low and his handmade paper sells for a high price.

As a result, Li has been considering reintroducing manual production methods.

"As people get richer, students of calligraphy and painting will not care so much about the price," he said, adding that he anticipates a rise in demand for handmade paper.

The move may not be as easy or profitable as Li imagines, though.

"It could just be hard for him. Financial strength, connections with renowned artists－who are key to branding－and production skills are some of the major challenges he would face," Tang said.

"The market for machine-produced paper will be further dominated by major companies who are more effective at reducing costs and improving efficiency."

He suggested that producers of handmade paper should maintain their traditions whenever possible because demand for the high-end product may rise again－he cited the example of expert renovators of ancient books and documents who have been searching for high-quality paper in recent years.

Moreover, many types of handmade paper have died out recently, mostly due to declining demand.

"Some of the demand should have been nurtured, such as use of paper for packaging," said Tang, adding that too much plastic is used in packaging nowadays.