China is a major country involved in import-export trade of forest products, the total import-export volume of which increased from US$ 100 billion in 2010 to US$ 140 billion, growing at 7.5 percent annually, according to the statistics.
The 6th Forest Products International Trade Forum under CAEXPO Forest & Wood Products Exhibition 2016 was successfully held in Nanning on December 2, 2016, when experts and practitioners suggested that it is imperative to speed up the transformation and upgrading of import-export trade of forest products.
Impeded import & export trade
Over the years, numerous forest products seen everywhere in China are imported from the overseas markets like ASEAN countries, ranging from building materials to furniture and from bamboo & rattan to paper, due to the lack of forest resources. Now China is mainly importing log, paper products, paper pulp, veneer and converted timber from foreign countries.
ASEAN countries relatively abundant in forest resources remain a major source of China’s imported forest products. It is reported that the trade volume of China-ASEAN totaled US$ 31.8 billion in 2015, including US$ 20 billion produced by China’s import from ASEAN countries.
However, China’s major forest product trading partners in the ASEAN region, including Cambodia, Laos, Myanmar, Thailand and Vietnam, have issued their respective timber export bans successively, leading to the rising price of timber, particularly the price of log, and adversely affecting the main links of enterprises specializing in forest products, such as raw-material import, cost management and product export.
“In 2015, the import & export trade volume of China in terms of forest products totaled US$ 140 billion: the total import was US$ 64.7 billion, and the total export US$ 75.3 billion,” said Mr. Chen Yong, deputy director of the Forest Product International Trade Research Center, which is affiliated to the State Forestry Administration of the People’s Republic of China.
In the past, China mainly imported forest products dominated by the economic forest, and the export volume of high value-added products involved like furniture, paper and paperboard was on the increase. Mr. Chen said, “As environmental protection becomes a priority of international trade involving forest product, legitimate trade regulations will be utilized by developed countries to impose limits on the trade of developing countries. And China has become the primary target of trade protectionism implemented by some countries.”
In addition, due to the increase of labor cost and environmental cost in China’s domestic market and the excess production capacity of some forest products, it is urgent that work needs to be done to transform and upgrade the outdated development modes in terms of forest product trade.
International cooperation and self-improvement
Analysts noted that China’s forest products are still mainly exported to Europe and America; however, we feel pessimistic about part of such traditional export destinations. With the China-led Belt and Road Initiative being implemented, we could focus our attention on the emerging markets surrounding the Belt and Road, among which ASEAN could be one of China’s major trading partners in the field of forest product trade.
China is set to cooperate with some ASEAN countries in terms of the development and utilization of forest resources; meanwhile, overseas wood processing parks featured by felling, processing, trade and logistics would be established by transferring and utilizing China’s high-quality production capacity like wood processing and forestry machinery manufacturing. By doing so, not only can the allocation of Chinese forestry enterprises be optimized, but also more employment opportunities and advanced technologies can be brought to the local areas. For instance, to continue strengthening the forestry cooperation between China and Myanmar, China is negotiating with Myanmar on the establishment of an overseas cooperation zone in the local area, hoping that cooperation agreements would be signed to set standards for bilateral processing trade of forest products.
ASEAN countries are the relatively mature emerging markets along the Belt and Road, with enormous market potential, and local consumers show great interest in wood culture; therefore, with a priority placed on ASEAN countries, Chinese enterprises concerned are more likely to be successful in not only trade of forest products but also production capacity cooperation and investment.
As a matter of fact, encouraging Chinese enterprises specializing in forest products does not mean that the development of China’s forestry can be ignored; instead, we should give high priority to technology research and development, as well as brand upgrading.
Source: China-ASEAN Panorama
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