China
CHINA ’S FOREST INDUSTRY : CHINA’S Trends and Perspectives Society of American Foresters Meeting, Canyonville, OR, April 30, 2009
Rose Braden
Center for International Trade in Forest Products University of Washington & Evergreen Building Products Association,
China Total Population: 1.3 billion
Beijing
Shanghai Chongqing
Guangzhou
Source: China Statistics Bureau 2007
Lacking domestic timber resources
Broadleaved Forests Coniferous Forests Ecological Forests Economic Forests
Total Forested Land (1999‐2003):
175 million ha
…of which, Plantation Area:
30%
Annual Afforestation/Reforestation Rate since 1999:
6 million ha
Forest Cover:
18.2%, aim to reach 20% by 2010 Sources: State Forestry Administration (SFA), China Data Center
China’s forest area up 30% in 10 years due to increase in plantation forests
China’s AAC Quotas: More increases planned for commercial plantations
Source: Pyory Forest Industry
Domestic fiber demand up 10%/year, major expansion in pulp & paper demand expected
= 18%increase, 2005-10
Source: Pyory Forest Industry
China’s growing wood fiber imports: mainly logs, pulp and wood chips By 2006, over 40% of China’s total wood fiber consumption was imported. Most of this was raw materials (Lu 2007)
China is the 3rd leading wood products importer: $8.2 billion in 2008(e) Avg Ann % Chg since 2005 U.S.
‐5.3%
Japan
‐2.5%
China
12.9%
Germany 12.4% U.K. 6.8%
*Wood products here refer to HS44, excluding wood furniture under HS94
Source: Global Trade Atlas
China is the 3rd leading wood products exporter: $9.2 billion in 2008(e) Avg Ann % Chg since 2005 Canada
‐17.3%
Germany
18.7%
China
13.0%
Russia
7.2%
U.S.
5.0% ‐8.3%
Brazil
*Wood products here refer to HS44, excluding wood furniture under HS94
Source: Global Trade Atlas
China is the largest wood furniture exporter: $7.1 billion in 2008(e) Avg Ann % Chg since 2005
*Wood furniture comprises: HS94330-60
China
15.2%
Italy
18.4%
Germany
21.3%
Poland
21.5%
Canada
‐9.6%
Source: Global Trade Atlas
Furniture industry is the single largest lumber and panel user in China
Source: Cambridge Forest Products Associates
Major log suppliers to China
Source: Pöyry Forest Industry
Leading imported products
Leading imported products from the US Description
United States Dollars 2006
2007
2008
Total
$546,604,428 $592,900,992
$570,120,527
Lumber
$353,163,107 $374,495,371
$373,765,232
Wood in the Rough/Cants
$123,314,354 $149,724,887
$146,783,221
Veneer
$39,992,095
$38,750,608
$23,225,360
Wood, Continuously Shaped
$18,227,804
$14,598,162
$10,749,828
Fiberboard
$2,603,749
$2,400,440
$4,009,724
Particleboard
$138,246
$2,301,136
$3,029,536
Plywood, Veneered Panels
$1,482,768
$1,260,927
$2,508,701
Articles Of Wood, Nesoi
$1,735,033
$1,070,692
$1,503,256
Builders' Joinery And Carpentry
$1,777,830
$1,269,598
$1,023,459
Source: Pöyry Forest Industry
Lumber & Panel imports slow as China ramps up domestic production Imported lumber and panels as % of total consumption has been on decline after reaching its peak in 2002.
7.1%
15.6% 6.4%
Source: Cambridge Forest Products Associates
Panel industry structural changes Chinese industry administration aims to adjust the proportion of plywood, fiberboard and particleboard from current 50:35:15 to 40:40:20 by 2010 Unit: million m3
Source: Qian, 2007
Plywood industry supplied wholly by plantations China has 3.1 million ha of poplar plantations with a total standing timber volume of 193.3 million m3, of which almost half are mature forests.
Wood Use in Plywood Production
This means that Chinese poplar plantations can supply its plywood industry with 52.5 million m3 RWE per year (Wu, 2007). Source: Wu, 2007
Flooring industry shifting to engineered wood products and non‐timber composites 250
Unit: million m3 200
Laminated 150 100
Solidwood
Engineered
50
Bamboo
0 1999
2000 Laminated
2001
2002 Solidwood
2003
2004
Engineered
2005 Bamboo
2006
Source: CWI, 2005
Global economy is cooling Global GDP Forecast by Cambridge Forest Products Associates The Economist Forecast of GDP 2008
2009
US
1.6
1.3
Japan
1.0
0.9
China
9.8
8.5
Britain
1.2
0.6
Canada
1.1
2.0
Brazil
4.6
3.4
India
7.7
7.1
Source: The Economist, Oct 2008
China’s economy slowing, too
Source: China Data Center
Post‐Olympic domestic Chinese market, still a boom?
Timber prices surge since 2007 due to rising oil prices
Source: China Data Center
Rising fiber prices impact resource intensive manufacturing , Pulp & Paper less so
Source: China Data Center
China’s faces competition from lower cost producers Unit price of Chinese wood bedroom furniture exports to the U.S. market vs. Vietnamese exports
Source: Global Trade Atlas
Will China be replaced by Vietnam in exports? US Wood Furniture Imports by Sources CHINA
CANADA
VIETNAM
Source: Global Trade Atlas
Rush to become certified
Source: FSC
Conclusions •
Long-term raw material supply is a major concern to China
•
Major govt. and private industry focus on increasing plantation productivity
•
But still, large dependence on imports
•
Declining wood products demand expected during 2008-2011 due to global economic downturn, but industry growth momentum will recover
•
China is losing its cost advantage in the export market as competition from Vietnam and other low-cost countries is increasing.
•
Forest certification and product safety regulations (CARB) pursued by Chinese manufacturers, increase costs.
www.cintrafor.org Rose Braden – [email protected]
Rose Braden
Center for International Trade in Forest Products University of Washington & Evergreen Building Products Association,
China Total Population: 1.3 billion
Beijing
Shanghai Chongqing
Guangzhou
Source: China Statistics Bureau 2007
Lacking domestic timber resources
Broadleaved Forests Coniferous Forests Ecological Forests Economic Forests
Total Forested Land (1999‐2003):
175 million ha
…of which, Plantation Area:
30%
Annual Afforestation/Reforestation Rate since 1999:
6 million ha
Forest Cover:
18.2%, aim to reach 20% by 2010 Sources: State Forestry Administration (SFA), China Data Center
China’s forest area up 30% in 10 years due to increase in plantation forests
China’s AAC Quotas: More increases planned for commercial plantations
Source: Pyory Forest Industry
Domestic fiber demand up 10%/year, major expansion in pulp & paper demand expected
= 18%increase, 2005-10
Source: Pyory Forest Industry
China’s growing wood fiber imports: mainly logs, pulp and wood chips By 2006, over 40% of China’s total wood fiber consumption was imported. Most of this was raw materials (Lu 2007)
China is the 3rd leading wood products importer: $8.2 billion in 2008(e) Avg Ann % Chg since 2005 U.S.
‐5.3%
Japan
‐2.5%
China
12.9%
Germany 12.4% U.K. 6.8%
*Wood products here refer to HS44, excluding wood furniture under HS94
Source: Global Trade Atlas
China is the 3rd leading wood products exporter: $9.2 billion in 2008(e) Avg Ann % Chg since 2005 Canada
‐17.3%
Germany
18.7%
China
13.0%
Russia
7.2%
U.S.
5.0% ‐8.3%
Brazil
*Wood products here refer to HS44, excluding wood furniture under HS94
Source: Global Trade Atlas
China is the largest wood furniture exporter: $7.1 billion in 2008(e) Avg Ann % Chg since 2005
*Wood furniture comprises: HS94330-60
China
15.2%
Italy
18.4%
Germany
21.3%
Poland
21.5%
Canada
‐9.6%
Source: Global Trade Atlas
Furniture industry is the single largest lumber and panel user in China
Source: Cambridge Forest Products Associates
Major log suppliers to China
Source: Pöyry Forest Industry
Leading imported products
Leading imported products from the US Description
United States Dollars 2006
2007
2008
Total
$546,604,428 $592,900,992
$570,120,527
Lumber
$353,163,107 $374,495,371
$373,765,232
Wood in the Rough/Cants
$123,314,354 $149,724,887
$146,783,221
Veneer
$39,992,095
$38,750,608
$23,225,360
Wood, Continuously Shaped
$18,227,804
$14,598,162
$10,749,828
Fiberboard
$2,603,749
$2,400,440
$4,009,724
Particleboard
$138,246
$2,301,136
$3,029,536
Plywood, Veneered Panels
$1,482,768
$1,260,927
$2,508,701
Articles Of Wood, Nesoi
$1,735,033
$1,070,692
$1,503,256
Builders' Joinery And Carpentry
$1,777,830
$1,269,598
$1,023,459
Source: Pöyry Forest Industry
Lumber & Panel imports slow as China ramps up domestic production Imported lumber and panels as % of total consumption has been on decline after reaching its peak in 2002.
7.1%
15.6% 6.4%
Source: Cambridge Forest Products Associates
Panel industry structural changes Chinese industry administration aims to adjust the proportion of plywood, fiberboard and particleboard from current 50:35:15 to 40:40:20 by 2010 Unit: million m3
Source: Qian, 2007
Plywood industry supplied wholly by plantations China has 3.1 million ha of poplar plantations with a total standing timber volume of 193.3 million m3, of which almost half are mature forests.
Wood Use in Plywood Production
This means that Chinese poplar plantations can supply its plywood industry with 52.5 million m3 RWE per year (Wu, 2007). Source: Wu, 2007
Flooring industry shifting to engineered wood products and non‐timber composites 250
Unit: million m3 200
Laminated 150 100
Solidwood
Engineered
50
Bamboo
0 1999
2000 Laminated
2001
2002 Solidwood
2003
2004
Engineered
2005 Bamboo
2006
Source: CWI, 2005
Global economy is cooling Global GDP Forecast by Cambridge Forest Products Associates The Economist Forecast of GDP 2008
2009
US
1.6
1.3
Japan
1.0
0.9
China
9.8
8.5
Britain
1.2
0.6
Canada
1.1
2.0
Brazil
4.6
3.4
India
7.7
7.1
Source: The Economist, Oct 2008
China’s economy slowing, too
Source: China Data Center
Post‐Olympic domestic Chinese market, still a boom?
Timber prices surge since 2007 due to rising oil prices
Source: China Data Center
Rising fiber prices impact resource intensive manufacturing , Pulp & Paper less so
Source: China Data Center
China’s faces competition from lower cost producers Unit price of Chinese wood bedroom furniture exports to the U.S. market vs. Vietnamese exports
Source: Global Trade Atlas
Will China be replaced by Vietnam in exports? US Wood Furniture Imports by Sources CHINA
CANADA
VIETNAM
Source: Global Trade Atlas
Rush to become certified
Source: FSC
Conclusions •
Long-term raw material supply is a major concern to China
•
Major govt. and private industry focus on increasing plantation productivity
•
But still, large dependence on imports
•
Declining wood products demand expected during 2008-2011 due to global economic downturn, but industry growth momentum will recover
•
China is losing its cost advantage in the export market as competition from Vietnam and other low-cost countries is increasing.
•
Forest certification and product safety regulations (CARB) pursued by Chinese manufacturers, increase costs.
www.cintrafor.org Rose Braden – [email protected]
