Paper subsidies from the Chinese government are gouging U.S. manufacturing and could cost 5,000 jobs in Southwest Washington, according to a new analysis by the Economic Policy Institute.The study, commissioned by the Alliance for American Manufacturing, found that China has fueled its rapidly growing paper industry with more than $33.1 billion in government subsidies, undercutting the U.S. paper industry’s competitive advantages and allowing that country to overtake the U.S. to become the world’s largest producer of paper and paper products. Clark County has lost half its paper industry jobs in the past decade. There were 1,300 local paper jobs in 2009, down from 2,600 paper jobs in 1999. To the north, Cowlitz County’s paper industry contracted 42 percent over that time, to 2,100 jobs.Scott Bailey, Southwest Washington regional economist for the state Employment Security Department, said that China cannot shoulder all the blame for that decline.The industry has also lost jobs because of increased automation and corporate decisions to close, rather than upgrade, aging mills. “It comes down to profitability,” Bailey said. “There’s a cycle of new plants versus old plants. How much do you reinvest in the old plant and then finally pull the plug?”Scott Paul, executive director of Washington, D.C.-based Alliance for American Manufacturing, agreed that the Chinese government was not the sole cause of the industry’s decline.