She terribly hard counters him.
His hest hope is an ambush scenario, where he sneaks up and cuts her. However, even that is questionable because simply transforming into paper could heal her injuries and allow her to reform her body.
In proper battle, its an embarassment. As soon as she turns to paper, there is nothing he can do. His Water Prison can't suffocate paper. His Water Dragons can't smash against paper to any meaningful effect. His Hidden Mist can't block her sensing. So all his techniques are completely ineffective against her paper form.
His best hope would be to somehow get Water Prison and outlast her, but her achievement with the 600 billion paper bombs suggests that her stamina and reserves are vastly superior to his own.
If she turns aggresive, she simply turns to paper, hardens it and covers the field in sharpened papers.
I'm not sure if there is a difference levels of shinobi-hood, but her technique is . . . just too much for him.