According to the Financial Times, US papers are looking to China for newsprint:
The newsprint that will roll over the presses of the Orlando
Sentinel some time next month may not look any different to the paper’s
readers. But it will have endured a fairly tortuous journey – from a
port in China, across the Pacific, through the Panama Canal, and then
by rail from the port of Miami.The Sentinel could have saved a
lot of hassle by buying the newsprint from its usual suppliers in
Canada. But its owner, the Tribune Company, is betting that it can save
money by importing the Chinese product…Along with personnel, [newsprint] ranks as the largest cost for most
newspapers, and over the past four years, its price has increased more
than 50 per cent – from about $445 per metric tonne to more than $675.Sadly
for newspaper publishers, the increase is not because they are selling
more papers. In fact, consumption has levelled off as circulation
remains flat or falling at most papers. Instead, it is because of a
consolidation among the major Canadian suppliers over the past decade…
There’s a much simpler explanation for the rising price of newsprint and the shutdown of paper mills than an attempt by Canadian producers to flex whatever market power they might have. The CAD has appreciated 40% against the USD – and therefore the yuan – over the past four years. Throw in inflation, and you’ve pretty much explained all of the increase in the price of newsprint – as well as how China can suddenly become a player in the US newsprint market.
Worthwhile Canadian Initiative 
I like your theory better than the conspiracy theory.
However, I wonder if it is so simple. Just because currencies have moved doesn’t mean that the Chinese would have low enough costs to enable exportation. I’ll confess up front to being ignorant on the lumber and paper industries. That said, I have three different hypotheses, all based in ignorance of facts and pure speculation. 😡
1) China and Russia may (just a guess, I really don’t know) finally have a large trade in Russian trees that were simply sitting ther eunder communism, and China is turning them into lumber for internal uses and paper for export. Currency valuations help of course to defer the expense of overseas export.
2) Canada may (just a guess, I really don’t know) sell a lot of raw timber to China. China turns what it can into lumber it is voraciously devouring as it grows by leaps and bounds, and uses the “scraps” for making paper, which it then turns around and exports to the US, underbidding Canadian paper mills. 😮
3) Environmental regulations and voluntary set asides by conservation groups in Canada and the US may (yeah yeah, I’m just guessing again) be raising prices enough to make importation from China a factor.
I suspect a combination of all four (including foreign exchange rates of course) are at play here.
Oh, I’m sure that there are other factors as well. I don’t think Canada sells raw lumber to China (and if it did, Canadian lumner would be 40% more expensive to the Chinese as well). The exchange rate movement is probably not the whole story, but it appears to account for most of the change in prices.