This machine is used to make paper shopping bags with flat handles inline (handles folded inside the bag or upright when coming out) fully automatically. The handle making unit makes the flat handles through the roll paper folding, cutting and pasting; afterwards, handles will be delivered to the designated position, and going through the handle pressing unit before they are sent to the bags forming unit. The main machine can form the paper bag in one process from the paper roll, handle patching, side gluing, tube forming & cutting, bottom creasing & gluing and forming to bags collection. The whole is in the control of servo motor system to ensure the high speed and stability, and to reduce the adjustment time for bags sizes change. It is with the advantage of high precision and stability, simple maintenance and high efficiency. Thus it is an ideal equipment for printing houses and paper bag manufacturers.