Domestic consumption is going up daily, export demand is increasing and China can’t produce enough wood from its own forests, said Zhonghao Jin, manager of the China Forest and Trade Network (China FTN), summarising the country’s forest products industry.
It’s an interesting conundrum and one that has global significance for China’s forest products market as the country’s spectacular economic growth over the past decade has a dramatic impact throughout the world.
In just 10 years, China has moved from a ranking of seventh to second among all nations in terms of the total value of its forest products imports, and it is now the leading importer of industrial roundwood. Between 1997 and 2005, the value of its forest products imports rose from US$6.4bn to US$16.4bn, and the volume more than trebled from 40 million to 134 million m3 roundwood equivalent (RWE).
Timber exports
From WWF’s perspective, China is a key country for engagement both for the conservation value of domestic forests and the huge impact that the Chinese are having on other forests, from Russia to the tropics.
Recent estimates suggest that around 30% of China’s exports of forest products are made from illegally harvested or traded wood. For some supply chains, such as those originating in the Russian Far East, the illegal content may be as much as 50%. “There is no history of questioning wood supply and this is one of our great challenges,” said Mr Jin.
The main timber products exported by China are furniture, wood-based panels and, to a lesser extent, wood chips. In 2005, these three accounted for over 80% of China’s total timber product exports. Its exports of wood furniture have increased at an average annual rate of 19%, from 3.2 to 12.7 million m3 RWE between 1997 and 2005. During the same period China’s plywood exports increased 10-fold, to over 10 million m3 RWE, making it the world’s largest plywood exporter. China’s forest products exports were valued at over US$17bn in 2005.
The US has been the single largest importer since 2000, accounting for 35% of China’s total export value by 2005. Imports by the EU have grown dramatically – by almost 800% – since 1997, with the UK the top importer and accounting for approximately one-third of all EU imports. Germany and the Netherlands follow the UK in imports from China with 16% and 10% respectively.
Demand for plywood continues to grow; UK interest is evident as the UK-Chinese plywood market grows at around 30% per year. “We had a number of UK and US buyers come to us in China last year and ask for help,” said Mr Jin. Many of these companies have responded to recent NGO campaigns and recognise that if they need to purchase plywood in China they are going to have to act as responsibly as they do in other countries.
Responsible purchasing
China FTN was launched in November 2005, initially with eight companies from across mainland China and Hong Kong. Prior to launch the WWF’s Global Forest and Trade Network (GFTN) commissioned research to develop target lists of companies that would be suitable candidates for membership. These lists focused on companies in key sectors, such as plywood and flooring, where the companies were importing wood from countries such as Russia, Indonesia and Central Africa. Consideration was also made for companies processing wood from the north-east of China (Manchuria) where there is a considerable area of natural forest in the Amur-Heilong eco-region. This region offers the best hope for significant large-scale FSC certification.
Around 2% of China’s wood consumption is encompassed by China FTN’s membership, which has now grown to 10 trade participants and two forest participants. Another six companies are expected to become members this year and membership is expected to reach 25 companies within the next 18 months.
The sheer scale and global reach of the forest products industry in China means that it plays a vital role in the development of the GFTN as a whole. Most of the larger companies within GFTN source forest products in China and all the producer countries GFTN operates in see China as a market.
Increasingly, thanks to market pressure from the UK, western Europe and North America, Chinese companies are opting to work with the China FTN.
For further information contact Jin Zhonghao at zhhjin@wwfchina.org or George White at george@btinternet.com or visit www.forestandtradeasia.org/china
