China: Forest industry revitalization
Asia Observatory

11 December 2009

China: Forest industry revitalization

Five departments including the State Administration of Forestry, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Commerce and the State Taxation Administration recently released their plan for the revitalization of the forest industry 2010-2012.
This will serve as the foundation for an action plan to support the industry through the current global economic crisis.
The plan aims to raise the output value of the sector and to maintain growth of around 12% annually. This it will aim to achieve in 3 years by focusing on support for 100 national leading enterprises and 10 large wood industry.
The output value of the forest industry is set to increase from RMB1.44 trillion in 2008 to RMB2.26 trillion in 2012. The planned output of the wood-based panel sector will be around 100 million m3. The total value of wood products trade is expected to be over US$90 billion of which US$50 billion would be for export.
Export products such as wood-based panes, wood flooring, furniture, wooden doors will be given priority. To meet these targets timber imports are forecast to be over 60 million cu.m (log equivalent). The number of employees in wood processing sectors is set to increase to 57 million from the current 45 million.

Log price down
According to statistics from Tianjin Customs, during January to October log imports through Tianjin Port jumped almost ten fold to 221,000 cu.m valued at US$26.36 million but the average price for logs fell 54 percent to US$119 per cubic metre. The logs were mainly imported from New Zealand, (114,000 cu.m or 52%). The main importers are private enterprises which accounted for around 127,000 cu.m.

Hebei furniture exports up
In October the value of furniture exports from Hebei Province rose 7 percent to almost US$19 million, being the highest monthly figure since the beginning of 2009. During January to October furniture exports fell 15 percent to US$140 million.
The European Union and the USA are the largest markets for Hebei furniture. Furniture exports to the EU grew 11 percent to US$65 million for the year to date. However, furniture exports to the USA fell 34 percent. The value of exports to the two main markets (EU and USA) accounted for 70 percent of the total. Exports to Asian markets had mixed fortunes. The value of furniture exports to Japan rose 22 percent while exports to South Korea fell 25 percent.
Local experts suggest that China’s furniture exportoriented enterprise should diversify their markets especially as the EU and US markets are becoming very demanding and it is both costly and difficult to meet the requirements in these markets.