Required Report - public distribution

**Date:** 7/30/2004

**GAIN Report Number:** CH4024

CH4024

**China, Peoples Republic of**

**Solid Wood Products**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Maurice House

U.S. Embassy, Beijing

**Prepared by:**

Zhang Lei

**Report Highlights:**

Forest products imports, especially logs and lumber, increased slightly
in 2003, and prices increased rapidly. Forest product consuming sectors
such as furniture and plywood

manufacturing are developing very rapidly and are forecast to continue
growth in the coming years.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Beijing \[CH1\]

\[CH\]

Table of Contents

[Production 3](#production)

[Forest Situation/Outlook 3](#forest-situationoutlook)

[Solid Wood Situation/Outlook 6](#solid-wood-situationoutlook)

[Trade 8](#trade)

[Overview 8](#overview)

[Policy 10](#policy)

[Competition 10](#competition)

[Market Segment Analysis 11](#market-segment-analysis)

[Construction Sector 11](#construction-sector)

[Overview 11](#overview-1)

[Policy 12](#policy-1)

[Trade 13](#trade-1)

[Construction Sector Strategic Indicator Table
13](#construction-sector-strategic-indicator-table)

[Furniture & Interiors Sector 13](#furniture-interiors-sector)

[Overview 13](#overview-2)

[Trade 14](#trade-2)

[Furniture Sector Strategic Indicator Table
14](#furniture-sector-strategic-indicator-table)

[Material Handling Industry 15](#material-handling-industry)

[Overview 15](#overview-3)

[Material handling Sector Strategic Indicator Table
15](#material-handling-sector-strategic-indicator-table)

[Statistical Information (Trade tables and PS&D Tables)
16](#statistical-information-trade-tables-and-psd-tables)

[General Trade Tables 16](#general-trade-tables)

[LOGS 21](#logs)

[LUMBER 25](#lumber)

[Plywood 30](#plywood)

[Plywood 30](#__RefHeading___Toc80429213)

# Production

## Forest Situation/Outlook

**The forest planting area targets for 2004 have been reduced compared
to 2003, because of conflicting demands on land from policies to
increase crop production.** In 2004, the planned forest planting area
was an estimated 7,737,300 hectares, of which 6,320,700 hectares are of
general forest coverage and 1,416,600 hectares of mountainous area
coverage. The most significant reason for the reduction of the planned
forested area in 2004 is the Chinese government's current policies are
designed to increase grain production, which will affect the Conversion
of Cropland to Forest Program. According to State Forestry
Administration (SFA), the planned conversion of cropland to forest in
2004 was 666,667 hectares, only about 20 percent of what was converted
in 2003. The government also made structural adjustments to the
Conversion of Cropland to Forest Program, increasing the percentage of
hardwood forest, from single to multi-species. As reported in May of
2004, 4,503,600 hectares have been planted, accounting for 71 percent of
this year's plan.

State Forest Administration statistics state that China achieved
record-high forest coverage in 2003; total forested area was 10,936,200
hectares. The forested area was 9,118,900 hectares, an increase of 17.26
percent from 2002, and the mountainous area was 1,817,300 hectares. This
was significant in that the reforested area exceeded 1 percent of total
land area (960 million hectares).

In June of 2003, ***The State Council's Resolution on Accelerating
Development of the Forestry Industry*** was issued. This document was
drafted by China's SFA and issued by the Central Communist Party in
addition to the State Council. It is recognized as one of the most
important documents on China's forestry industry development in recent
years. The document states the following goals of China's forest
development: Forest coverage will reach 19 percent by 2010; forest
coverage will reach 23 percent by 2020; and forest coverage will reach
and be maintained at 26 percent by 2030. Key points of the document:

-   The ecological and environmental importance of China's forest areas,
    and their sustainable development, is of paramount concern to the
    Chinese government.

-   The government will protect China's natural forests through
    continuation of a logging ban and a logging quota, while encouraging
    development of tree plantation. Many of these policies have resulted
    from studies conducted through the State Forestry Administration's
    National Forest Protection Plan (NFPP).

-   The document sets out preferential tax and fee policies to reduce
    the high taxes and fees on legal logging of plantation trees,
    stimulating investment into plantations and reform ownership rights
    for forestland, making forestland legally transferable.

-   Currently, the total central and local government taxes are
    estimated to be between 50 percent and 70 percent of the cost of
    timber. New experimental regulations in Anhui Province seek to lower
    these taxes by eliminating a central government agro-forest special
    tax of 8.8 percent and part of local taxes.

-   These new experimental tax reductions have reportedly succeeded in
    raising incomes of farmers and encouraging investment in plantation.
    The tax reduction proposal is now being applied in several other
    provinces and may eventually be extended nationwide.

The document states that an appropriate evaluation and accreditation
system for plantation land must be established to ensure land rights are
transferable, and to guarantee such land receives appropriate bank loans
for processing. The SFA is now working on the detailed implementation
measures, which should be announced in October of 2004.

The year 2003 can be considered a peak year for China's forest industry
development. In 2003, the total output of China's forest industry was
RMB586 billion (US\$71 billion), an increase of 26.5 percent from 2002.
Much attention was paid to the establishment of shelterbelt forests. In
2003, 7,087,300 hectares of shelterbelt forest, 1,175,800 hectares of
timber forest and 21,400 hectares of special purpose forest were planted
nationwide, which increased by 22 percent, 31 percent and 6 percent
respectively from 2002. By contrast, newly planted area of economic
forest and fuel-wood forest was 797,300 hectares and 37,100 hectares, a
decrease of 18 and 37 percent respectively from 2002. Another vital
trend in 2003 was that 57 percent of the new areas were planted by the
private sector.

**Investment and distribution:** The total fixed asset investment in the
forest industry in 2003 was RMB40.7 billion (US\$4.9 billion), an
increase of 29 percent from 2002. State investment accounted for RMB31.3
billion (US\$3.8 billion). In 2003, Investment continued to increase for
six key forest development programs, which took 81 percent (RMB33.3
billion) of total investment. Among the six forest programs, the
Conversion of Cropland to Forest Program contributed the biggest
percentage to the forestation area, accounting for 6,196,100 hectares
(not including the converting land to forest in the Sand Control Program
for Areas in the Vicinity of Beijing and Tianjin), or about 68 percent
of the total forestation area in 2003. This includes 3,095,900 hectares
of cropland converted to forest and 3,110,200 hectares of plantations
established in barren mountains and waste lands. The total investment
for the Conversion of Cropland to Forest Program was RMB20.8 billion
(USD\$2.5 billion) in 2003, an increase of 19 percent from 2002.

There were areas of target forestation that were not successful. Most of
the conflicts between the farmers and the local government resulted from
the farmers' not receiving guaranteed benefits. Local governments forced
farmers to convert cropland to forest, but didn't provide subsidies to
farmers as promised. Such events crippled the farmers' willingness to
convert.

From the region distribution of the investment, the fixed assets
investment in the West Area (including 12 provinces and cities, Sichuan,
Guizhou, Yunnan, Chongqing, Xizang, Shaanxi, Gansu, Qinghai, Ningxia,
Xinjiang, Guangxi, Inner Mongolia) composed of RMB21.2 billion (USD\$2.6
billion), accounting for 52.09 percent of the total investment. The
investment in Northeast area (Heilongjiang, Jilin and Liaoning Province)
composed of RMB 6.0 billion, accounting for 14.71 percent.

In 2003, there were 479 foreign investment projects. The total foreign
investment in China's forest industry was US\$372 million, which was
5.39 times investment in 2002. The foreign investment focused on the
fast-growing-high-yielding plantation, timber and bamboo processing,
flowers and other competing sectors. Fujian Province attracted the most
foreign investment, accounting for US\$161 million, 43.3 percent of the
total foreign investment.

In 10 years, China is expected to invest RMB200 billion (US\$24 billion)
to build a 5 million hectares fast-grow-high-yielding forestry base for
paper producing. In 2003, the fast-growing-high-yielding forestation
area totaled 59,100 hectares. Farmers, foreign investors and leading
enterprises have been the main investors in the
fast-growing-high-yielding forest projects, accounting for 71.95 percent
of the total fast-growing-high-yielding forestation., the Raw material
forest of the panel sector and pulp-paper forest occupied a very big
percentage of tree plantations. The panel-product forest accounted for
43.6 percent of total fast-growing-high-yielding area. Poplar and
paulownia (kiri) are the main species in the North, accounting for 32
percent of the new northern forest projects. Eucalyptus and acacias
accounted for 27 percent in the South.

**China's logging quota will continue to be implemented, but some
industry resources believe that the quota policy may be changed in the
near future.** The logging quota was and continues to be a hot topic of
debate. Some propose that ecological forest should be managed more
strictly, while the control on the commercial forests should be relaxed.
Some believe that the logging quota should be relaxed in some selected
areas, and abolished in areas of fast-growing forest with rich forest
resources. Some suggest that China should start trials of logging quota
reform in qualified areas. They believe that there is a precedence to
follow and strengthen the current harvest quota policy, which is the
basis of the current forest management system. Such discussions have
made harvest quota a focus of current forestry policies. SFA has paid
more and more attention to these discussions, and has brought the
logging quota reform into its working agenda.

**Forest certification is a new topic for China's forest industry. Some
enterprises have experienced the impact of forest certification when
they exported forest products to Europe Union.** China is tentatively
evaluating options for timber certification strategy but has not
committed to any particular approach or implemented any domestic system.
It will be very cautious in order to implement a scheme that will not
disrupt normal trade flows. China will likely start with a go-slow,
voluntary, "domestically focused" scheme. China will likely try to
create its own unique system, modeled on international practices, rather
than adopt an existing certification scheme.

The Sixth National Forest Inventory covering the years 1999 to 2003 will
not be released until late October of 2004. The current official data of
China's forest coverage is still 16.55 percent.

  ----------------------------------- ------------ ------------ ------------
  FOREST AREA                                                   

  Country: China People's Republic of                           

  Report Year:                        2003         2004         2005

  Total Land Area (million hectares)  960          960          960

  Total Forest Area (million          164          167          170
  hectares)                                                     

  \--of which, Commercial ('000       101,680      103,540      105,400
  hectares)                                                     

  \-\-\--of commercial, tropical      4,880        4,970        5,059
  hardwood (\'000 hectares)                                     

  \-\-\--of commercial, temperate     43,926       44,729       45,533
  hardwood (\'000 hectares)                                     

  \-\-\--of commercial, softwood      52,874       53,841       54,808
  (\'000 hectares)                                              

  Forest Type                                                   

  \--of which, virgin (\'000          11,030       10,850       10,670
  hectares)                                                     

  \--of which, plantation (\'000      50,480       51,530       52,580
  hectares)                                                     

  \--of which, other commercial       102,490      104,620      106,750
  (regrowth) (\'000 hectares)                                   

  Total Volume of Standing Timber     12,908,630   13,102,260   13,298,790
  (thousand cubic meters)                                       

  \--of which, Commercial Timber      7,357,920    7,431,498    7,505,813
  (\'000 cum)                                                   

  Annual Timber Removal (\'000 cum)   339,772      349,965      360,464

  Annual Timber Growth Rate (\'000    485,390      499,950      514,950
  cum)                                                          

  Annual Allowable Cut (\'000 cum)    223,100      223,100      223,100
  ----------------------------------- ------------ ------------ ------------

## Solid Wood Situation/Outlook

**The strong demand for timber products in China will continue in the
coming years, driven by the rapidly developing construction, furniture
and panel sector. The gap between domestic supply and demand will grow
and imported timber products will meet the gap.**

Total annual consumption of wood in China for all purposes is about 370
million cubic meters. According to official data, about 65 percent of
the wood is used for industrial purposes. The construction sector,
furniture sector and paper sector account for about 90 percent of total
industrial wood consumption. Although government authorities have acted
to prevent overheating of the economy, many experts forecast that wood
consumption in China will continue to increase in 2004. The reasons
include:

-   Rapid urbanization stimulates the housing and decoration sector.

-   In countryside, a new house-building period is coming as the
    peasants' income increases.

-   The Olympic projects, especially "Green Olympics", will need a great
    amount of wood.

-   The domestic plywood sector and furniture sector develop very fast,
    while more and more products are exported, which determines the
    larger demand for timber material.

In 2003, timber production is estimated at 47.59 million cubic meters,
an increase of 7 percent over 2002. Although 7 percent is not a big
number, it is still a turning point because timber production in China
had been declining from 1998-2002, with the implementation of the
Natural Forest Protection Program (NFPP) in 1998. Sawn-wood production
in 2003 was 11.27 million cubic meters, an increase of 32 percent from
2002. The tropical sawn-wood production was 726,000 cubic meters,
accounting for 6% of the total sawn-wood production. The wood panel
production in 2003 was 45.53 million cubic meters, which increased by 55
percent from 2002. The production of plywood, fiberboard and
particleboard composed of 21.02 million cubic meters, 11.28 million
cubic meters and 5.47 million cubic meters respectively, all increased
by 85 percent, 48 percent and 18 percent respectively from 2002. China's
plywood production exceeded U.S. production to become the largest
plywood producing country in the world. The fast development of China's
plywood industry coincides with the fast development of China's
fast-growing forest, especially the poplar base, which provides adequate
raw material to meet the expanding international market.

Non-state enterprises are playing a more important role in China's wood
panel industry. For example, Pizhou City (in Jiangsu Province) is one of
the four plywood manufacturing bases in China. Pizhou's plywood output
estimated at 3 million cubic meters in 2003, accounted for 15 percent of
China's total plywood output and export plywood 750,000 cubic meters,
accounted for 40 percent of China's total plywood export. There are
2,913 plywood factories in Pizhou, all of them are private factories.
Most of the plywood factories are small and family owned, their biggest
competitive advantage is their low pricing of their product.

  ------------------------------------------ ----------- ----------- ---------
  WOOD PRODUCTS Subsidies                                            

  Country:                                                           

  Report Year                                2003        2004        2005

  Total Solid Wood Export Subsidy Outlay     n/a         n/a         n/a
  (US\$ million)                                                     

  Is there a ban on the export of logs,      Partial\*   Partial\*   n/a
  lumber or veneer?                                                  

  Are there export taxes (yea/no)?           No          No          No

  Total Wood Production Subsidy (US\$        n/a         n/a         n/a
  million)                                                           

  Scope (Thousands of hectares)              n/a         n/a         n/a

  Are there other wood products export       n/a         n/a         n/a
  expansion activities?                                              
  ------------------------------------------ ----------- ----------- ---------

**\* An export license is required when exporting logs and specific
types of lumber.**

# Trade 

## Overview

**Imports of roundwood and lumber slowed down in 2003. Russia continues
to dominate China's imports of roundwood, but its market share decreased
to 56 percent in 2003 from 61 percent in 2002. Imports of softwood
lumber decreased. By contrast, hardwood lumber imports increased because
of changing domestic demand. Prices of imported timber products
increased rapidly since the second half of 2003, especially the timber
products from North America. The main reason is increased freight
rates.**

China has adopted various policies to develop its forest industry, for
example, the Fast-Growing-High-Yielding (FGHY) Plantation Program with a
total investment of US\$8.65 billion, reducing the high taxes and fees
on timber logging and production, the reform of land ownership rights of
the forest industry, and so on. Attracted by the favorable policies and
the growing market demand for wood products, some of the world's largest
multinationals have invested in China's forest industry. However, it
will be at least five to eight years before China's forest resources are
significantly impacted by these investments. Therefore, some experts
believe for at least the next five to eight years, in spite of
dramatically increased foreign investment in China's forest industry,
China will continue to rely heavily on the imported forest products to
meet the rapid domestic demand.

In 2003, total imported timber products reached 40.2 million cubic
meters in roundwood equivalent volume, an increase of 5.5 percent over
2002 imports. The value of timber imports in 2003, was **US\$4,411
million**, about 13 percent above 2002 import value.

Roundwood imports in 2003 reached 25.45 million cubic meters, a 4.6
percent increase over 2002, with a value of US\$2.45 billion, a 14.5
increase over 2002. Compared to the 44 percent year on year increase in
2002, roundwood import growth for 2003 was considerably slower. The main
reason was attributed to changes in imports from Russia. But in 2003,
the roundwood from Russia slightly dropped from 14.81 million cubic
meters to 14.37 cubic meters. Despite the slight decrease of imported
roundwood, Russia continues to dominate China's roundwood imports.
However, Russia's market share of China's roundwood imports decreased to
56 percent from 61 percent in 2002.

**Table: Main supplies of China's import roundwood**

  -------------------- -------------- --------------- --------------------
  **Country**          **Amount                       **Yearly change
                       (1,000 Cubic                   (%)**
                       Meter)**                       

                       **2002**       **2003**        

  **Russia**           14,806         14,367          -2.96%

  **Malaysia**         2,122          2,931           38.12%

  **New Zealand**      1,641          1,921           17.06%

  **Papua New Guinea** 1,128          1,378           22.16%

  **Gabon**            1,088          942             -13.42%
  -------------------- -------------- --------------- --------------------

From China's Customs data, **imported roundwood in the first five months
of 2004 decreased slightly by 0.9 percent in volume, but increased 6.9
percent in value** over the same period of 2003. The imported roundwood
from Russia increased by 10.1 percent in volume and 21.5 percent in
value. Imported roundwood from the U.S. in the first five months of 2004
was US\$30.8 million, a 43.9 percent increase over the same period of
2003.

**The lumber imports in the first five months of 2004 increased 9.0
percent** over the same period of 2003, to 2,483 thousand cubic meters.
Lumber imported from Indonesia decreased by 10.4 percent over the same
period of last year, but continues to be the number one supplier of
China's imported lumber in volume. Lumber imported from Thailand and
Russia increased 25.4 and 22.4 percent respectively. The lumber imported
from U.S. increased by 15.1 percent. By contrast, the imported lumber
from U.S. accounted to US\$95 million in value in the first 5 months of
2004, exceeded Indonesia (US\$73 million), which increased 21.3 percent
over the same period in 2003.

The five listed countries accounted for 85 percent of China's imported
roundwood market. According to industry resources, New Zealand has
played increasingly important role in China's imported roundwood market.
China's roundwood imports from New Zealand are of two species: Douglas
Fir and Radiata Pine, which can be used as raw material for plywood. The
rapid development of China's plywood industry increased the demand
especially for New Zealand Radiata Pine.

Softwood imports in 2003 were 14.97 million cubic meters, a 5.11 percent
decrease from 2002 levels. The decrease in Russia Pine imports was the
main factor. In 2003, imported hardwood was 10.48 million cubic meters a
22.55 percent over 2002. This increase reflects changes in domestic
market demand, including increasing demand for plywood raw material,
like Okoume from Africa and Meranti from South-east Asia and the
increasing demand for the decoration, flooring and furniture material,
like Merban, Kempas, Beech and Teak.

**Imported lumber in 2003 increased slightly:** Imported lumber reached
5.51 million cubic meters, valued at US \$1.19 billion, a slight
increase of 2.0 percent and 3.0 percent respectively over 2002.
Indonesia, U.S., Thailand, Russia and Malaysia are the top five
suppliers. Imported softwood lumber in 2003 was 1.37 million cubic
meters, a 16 percent improvement over 2002. Softwood lumber imported
from Russia decreased 4.6 percent to 436 thousand cubic meters in 2003,
but still accounted for 32 percent of the total imported softwood
lumber. Softwood lumber imported from Canada increased from 127 thousand
cubic meters in 2002 to 265 thousand cubic meters in 2003, a 109 percent
increase. Softwood lumber imported from U.S. also increased 63 percent
to 55 thousand cubic meters.

**Imported timber price increased rapidly:** Industry sources indicated
that in the second quarter of 2004, prices of imported timber are
increasing. The strongest price increases are for Sydney Blue Gum logs
of South-east Asia, Monterrey Pine of New Zealand, Okoume of Africa,
which have increased about 30 percent. The reasons for the rising price
of timber are the depreciation of US\$ and increasing transportation
costs.

Since the end of 2003, imported timber and products prices have
increased rapidly, especially logs, sawn lumber, wood-based panel
(including plywood, fiberboard and particleboard) and wood flooring.
However, the prices for domestic lumber and wood products have shown
little increase and with some products prices are even decreasing. The
price of imported logs and sawn lumber increased RMB 50-120/m3,
especially for tropical hardwoods and the North America wood. Maple
imported from U.S. and Canada increased from RMB 10,000 in 2003 to RMB
11,500 this year.

China's log exports were 9,397 cubic meters in 2003, a 15 percent
decline from 2002. The decreasing trend for log exports continued in the
first five months of 2004.

Lumber exports were 476,493 cubic meters, 10 percent above 2002 levels.
Plywood exports in 2003 were 2,042,000 cubic meters, 14 percent above
2002. China's Custom data showed that there was a 78 percent increase in
plywood export in the first five months of 2004. Japan and South Korea
are the main export destinations for China's plywood. In 2003, China's
plywood exported to U.S. increased 57 percent to about 394,498 cubic
meters.

## Policy

**Tariff rates continue to decrease. The Value Added Tax (VAT) rebate
rate for logs and lumber was reduced to zero on January 1, 2004.**

The tariff rates continued to decrease in 2003 in accordance with
China's World Trade Organization accession agreement. The tariff on
panel products and packing products continued to decrease at different
rates. The tariff on wood furniture has been reduced to 3.7 percent in
2004 from 7.3 percent in 2003.

On October 13, 2003, the Ministry of Finance and State Taxation Bureau
of P. R. China issued the Announcement of the Adjustment of the VAT Tax
Rebate Rate. Following this announcement, the VAT tax rebates applied to
a variety of timber and paper/pulp products was reduced to zero
beginning January 1, 2004.

  ---------------- ------------------------------ ------------ -----------
  H.S. Code        Products                       Rebate rate  Rebate rate
                                                  of 2003      of 2004

  4403             Logs (rough, not sapwood)      5%           0%

  4404             Hoopwood; Pickets; split poles 13%          0%

  4407             Lumber, \>6mm thick            13%          0%

  4408             Veneer sheet \< 6mm thick      13%          0%

  4409             Wood Continuously shaped       13%          0%

  44190010         One-time chopsticks, of wood   13%          0%

  4501, 4502,4503  Cork and articles of cork      5%, 13%      0%

  47               Wood pulp and paperboard       13%          0%

  4801-4816        Paper, paper pulp and          13%          0%
                   paperboard                                  
  ---------------- ------------------------------ ------------ -----------

Importing rules have tightened up in China. China is now requiring
pest-free certification for all imported logs, and likely to become even
stricter in the future. Some domestic traders think use of certification
systems and import licensing will expand and ultimately become
mandatory.

## Competition

**It is difficult for other countries to compete with Russia at present
because of Russia's competitive pricing and its tree species similarity
to China. But some evidence shows that Russia's absolute dominance in
the market is weakening. Other main suppliers include Indonesia,
Malaysia, Myanmar, the United States, New Zealand and Canada.**

China has been one of the biggest timber consuming countries in the
world. In the following years, China's timber consumption is forecast to
continue to increase rapidly because of the factors including the strong
economic growth, 2008 Olympic Games, 2010 World Expo and improving
health standards.

Russia was and continues to be the biggest timber supplier to China
because of its competitive prices, especially when ocean freight rates
are high, and the similarity of Russian and Chinese tree species.
China's preferential forest products border trade policy allows Chinese
companies locating along the Sino-Russian border import logs and sawn
wood to pay only half the value-added tax (VAT) -- 6.5 percent on logs
and 8.5 percent on sawn wood. The preferential policy also strengthens
the competitive capability of Russia's forest products in China's
market.

More and more countries are exporting wood and wood products to China.
According to some domestic traders, the advantages of the U.S. wood
products are a sustainable logging system, the steady supply and high
quality. The disadvantage is the higher relative pricing. According to
China's Custom data, the imported softwood logs from the U.S. in volume
in the first four months of 2004 decreased by 51.47 percent over the
same period of 2003. One of the important reasons is that the average
price of the softwood logs imported from U.S. in the first four months
of 2004 increased by 96.61 percent over the same period of 2003.

# 

# Market Segment Analysis

## Construction Sector

### Overview

**In spite of China's general macroeconomic slow down, the construction
sector is forecast to continue rapid development in the coming years,
driven by Olympic Games, World Expo, infrastructure construction and
countryside housing building peak. China's real estate sector growth
will also keep the rapid pace, but will trend lower in the latter part
of 2004, because of the government's financial tightening and land
control measures.**

China's government authorities have acted to prevent the overheating of
its economy. Many sectors are affected, most notably manufacturing
sectors steel, cement, and aluminum. For the construction sector, it
will be affected in three ways:

-   The "slow-down" of the investments in fixed assets.

-   The reduced availability of supplies such as raw materials.
    Construction sector is the major consumer of the nation's steel and
    cement, with the Government of China (GOC) controlling the steel and
    cement sectors, the construction sector will also be affected.

-   The "slow-down" of the development of real estate sector trough land
    control measures.

However, many domestic experts believe that the macroeconomic policy
will only have a limited effect on China's construction sector. The
output of China's construction sector in 2004 is forecast to increase 20
percent from 2003, slightly lower than in 2003. There are lots of
projects already financed that should keep China's construction sector
strong in 2004, including:

-   2008 Olympic Games and 2010 World Expo: China has entered the
    construction peak period of Olympic started in the second half year
    of 2003.

-   Many big projects are under construction, like Qing-Zang Railway
    (from Xining, Qinghai Province to Lhasa, Xizang), West Gas Sent East
    Program, West Electronic Sent East Program, North-South Water
    Project.

-   The accelerating development of the urbanization.

-   The countryside, a new house-building period is coming in because
    current housing stocks are substandard.

According to official data, by 2008, Beijing will build or rebuild 30
sports venues, including 15 newly built, 11 renovated and 4 temporary
venues. Construction will begin on the 15 newly built sports venues by
the end of 2004. The total investment in the sports venues is estimated
at RMB 22 billion (US \$2.66 billion). In fact, the construction of the
Olympic sports venues is just a fraction of the Beijing Olympic Economy.
Beijing will invest RMB 280 billion (US \$33.88 billion) to improve
infrastructure and service capabilities. Demand for the construction
material will account for RMB 60 billion (US \$7.26 billion). Timber
products will account for 5%-7% of the total construction investment.
Timber product demand in Beijing in the coming years is forecast at RMB
20 billion (US \$2.42 billion). For potential suppliers, the China
Building Material Industry Association will host, the Third China
(Beijing) International Green Building Material Fair, November 24-27,
2004 at Beijing International Exhibition Center. For more information
about this Fair, visit <http://www.bmlink.com/displayexpo.asp> or
http://www.gbm.com.cn

According to the SSB data, the national average housing price in the
first five months in China was 2708 RMB/sqm, up 10.7 percent over the
same period last year. The average price in Shanghai, Beijing and
Guangdong was 5381 RMB/sqm, 5156 RMB/sqm and 3877 RMB/sqm respectively.
However, the data from SSB also showed that there is a slower increase
in the land developed and purchased area during the first five months of
2004, increasing by 19.8 percent and 9.8 percent, compared with 41.9
percent and 56.7 percent increased in the same period in 2003.

According to the statistics of State Statistical Bureau (SSB), new
housing in 2003 were 543 million square meters, an increase of 28.5
percent from 2002. In particular, housing starts in Hainan, Guangxi,
Shaanxi, Hebei and Xizang increased more than 50 percent from 2002. The
accumulative total investment of real estate in 2003 exceeded RMB1
trillion, an increase of 30 percent from 2002. The national average
price of commercial housing in 2003 was 2379 RMB/sqm, up 3.8 percent
above 2002 levels. In 2003, the average price of commercial residential
housing was 2212 RMB/sqm, up 3.9 percent; the average price of office
building was 4293 RMB/sqm, down 1.4 percent and the average price of
houses for business use was 3739 RMB/sqm, up 4.5 percent. The average
price of commercial housing in Shanghai, Jiangxi and Shanxi increased by
20 percent over 2002, the highest level nationally. The average price in
Shanghai in 2003 was 5118 RMB/sqm, the first time that Shanghai's
housing price has exceeded Beijing and becomes the most expensive city
in China. Industry resources contributed to the rapid price increase in
Shanghai and the rapid demand for housing, which were both driven by the
rapid increasing investments.

### Policy

The Chinese government issued some policies to restrict the "bubble" in
the real estate sector, mostly through financial and land--use
restrictions. In 2003, the biggest impact on China's construction sector
was the tightened mortgage policies of the People's Bank of China. In
2004, the biggest impact was a result of land use. In June of 2004,
China's real estate sector has dubbed 2004 the "Policy Year". China's
land management authorities have issued announcements to tighten the
management of construction land, including the registration and the
transfer of the land use-rights; adjusting the land supply structure -
increasing the land supply for affordable housing and limit the luxury
housing land supply. Both financial and land management policies are
focused on luxury homes and "unreasonable" development.

The government still looks to continue to build affordable apartments to
improve living condition, but states that the slow down in new housing
starts is helpful for the digestion of the vacant housing. Statistics
showed that in the first quarter of 2004, the area of unoccupied housing
was 90 million square meters, up 5.3 percent above 2003 levels.

According to the SSB data, the total investment of real estate during
the first five months of 2004 reached RMB370 billion, 32 percent above
the same period of last year, but growing at a slower rate than in
previous years.

### Trade

A new standard -- *Code for Design of Timber Structures* (GB 50005-2003)
was jointly issued by the Ministry of Construction and Administration of
Quality Supervision, Inspection and Quarantine of P. R. China on October
26, 2003. On January 1, 2004, the new standard brings into effect
regulations that are very similar with the construction standards of the
United States. These standard will play an important role in regulating
and promoting China's wood frame house construction. As for wood frame
housing, some domestic developers think that the wood frame houses will
be the trend for a "healthy living style" in China. U.S. and Canada be
the leaders in technology and material.

### Construction Sector Strategic Indicator Table

  ---------------------------------------- ---------- ---------- ---------
  **Construction Market**                                        

  **Country: China, People's Republic of**                       

  **Report Year:**                         2003       2004       2005

  Total Housing Starts (thousand units)    18,650\*   20,515     23,600

  \-- of which, wood frame (thousand       11         12         13
  units)                                                         

  \-- of which, steel, masonry, other      18,639     20,503     23,587
  materials (thousand units)                                     

  \-- of total starts, residential         15,853     17,438     20,060
  (thousand units)                                               

  \-\-\-- of residential, single family    1,585      1,744      2,006
  (thousand units)                                               

  \-\-\-- of residential, multi-family     14,268     15,694     18,054
  (thousand units)                                               

  \-- of total starts, commercial          2,797      3,077      3,540
  (thousand units)                                               

  Total Value of Commercial Construction   N/A        N/A        N/A
  Market (\$US million)                                          

  Total Value of Repair and Remodeling     N/A        N/A        N/A
  Market (\$US million)                                          
  ---------------------------------------- ---------- ---------- ---------

\* In China, there are no statistics on housing starts in units.
According to some industry resources, the average space of one unit of
house is about 80 square meters. The units number in the above table
comes from The Total Housing Starts Floor Space (square meters)/80
(square meters).

## Furniture & Interiors Sector

### Overview

**China's furniture sector will continue its present high growth trend.
China is the world's furniture manufacturing center because of the low
business cost, abundant skilled worker resources and mature
manufacturing technology. Guangdong is home to 50 percent of the total
exported furniture, followed by Zhejiang, Fujian and Jiangsu
provinces.**

China's furniture sector experienced a fast-growing year in 2003. The
production of furniture valued at US \$24.7 billion, up 22 percent above
2002. The export of furniture accounted for US \$7,333 million, up 35.3
percent. The main incentives for the fast growth in China's furniture
sector are as follows:

-   The domestic demand for furniture increased rapidly as a result of
    the booming of the real estate sector growth.

-   Exported furniture accounts for a large percentage of China's
    furniture production because of competitive advantage in the
    international market.

-   Many furniture manufactures in Hong Kong, Taiwan, Singapore and
    other South-East Asian countries moved their manufacturing
    facilities to China because of low costs and skilled workers.

By 2010, China's furniture production is forecast to exceed Italy and
become the No. 1 furniture production and export country in the world.
Even with the impact of China's sluggish economy and U.S.'s anti-dumping
case, the furniture production in China in 2004 is forecast to increase
20 percent above 2003 levels, because of strong domestic demand. In the
following five to ten years, millions of young people born in 1980's
China's last baby boom period, will come into their marriage years.
These new families will lead an ever increasing trend in furniture
consumption.

According to China's Building Decoration Association, the total output
of China's building decoration reached RMB 830 billion (US \$100
billion), the interior decoration reached RMB 430 billion (US \$52
billion). The forecast annual increase in interior decoration market in
China is 20 percent in the coming years.

In 2003, China's wood floor production reached 216 million square
meters, up 20.5 percent from 2002. The production of laminated composite
wood floor, solid wood floor, laminated solid wood floor and bamboo
floor was valued at 120 million, 70 million, 22 million and 4 million
square meters respectively, an increase of 26 percent, 8 percent, 38
percent and 11 percent respectively.

### 

### Trade

The wood furniture import tariff decreased to 3.7 percent from 7.3
percent in 2003. Imported wood furniture in 2004 is forecast to increase
20 percent from 2003. Wood furniture (H.S. 940330, 940340, 940350 and
940360) imported in 2003 reached US \$51.62 million, up 64 percent over
2002, because of the decreased tariff (from 11 percent in 2002 to 7.3
percent in 2002) and the increased domestic demand for high quality wood
furniture.

Major imported furniture suppliers include Sweden, Germany, Italy and
United States.

American hardwood products are acclaimed for their unique grain and
figure, and have received wide spread recognition among Chinese
consumers. But high prices hinder their sales in China.

In 2003, China exported furniture valued at US \$7.3 billion, up 35
percent from 2002. China's Customs data for the first quarter of 2004
reported a growth rate of 34 percent.

### Furniture Sector Strategic Indicator Table

  ----------------------------------- ------------ ------------ -----------
  FURNITURE & INTERIORS MARKET                                  

  Country: P. R. China                                          

  Report Year:                        2003         2004         2005

  Total Housing Starts (number of     18,650\*     20,515       23,600
  units)                                                        

  Total Number of Households          361,980      36,560       36,920
  (Thousand units)                                              

  Furniture Production (\$US million) 24,682       29,620       35,544

  Total Furniture Imports (\$US       195          230          280
  million)                                                      

  Total Furniture Exports (\$US       7,333        8,800        11,000
  million)                                                      

  Interiors Market Size (\$Us         52,027       62,430       74,920
  million)                                                      
  ----------------------------------- ------------ ------------ -----------

## Material Handling Industry

### Overview

China's material handling industry is forecast to maintain an annual
growth rate of 8 percent over the next 5 years. In 2003, the total value
of China's packing industry reached RMB 270 billion (US \$33 billion).
Paper and plastics are the main packing material in China, representing
about 60 percent of the total value output. Because of the shortage of
the forest resources, wood packing is shrinking. More and more wood
substitutes like plastics and metal are replacing wood packing.

On April 15, 2004, the General Administration of Quality Supervision,
Inspection and Quarantine of the People's Republic of China (AQSIQ),
hosted a Public Hearing regarding new regulations on wood packing
materials in reference to the provisions of International standards for
Plant Quarantine Measure No. 15 on Norms for the Administration of Wood
Packing in International Trade. Regarding the date of implementation for
the wood packaging measure, China said that some time would be given
before the implementation of the new regulations, but was not specific
on the timing.

### Material handling Sector Strategic Indicator Table

+-----------------------------------+-----------+----------+---------+
| Material Handling Market          |           |          |         |
+-----------------------------------+-----------+----------+---------+
| Country: China, People's Republic |           |          |         |
| of                                |           |          |         |
+-----------------------------------+-----------+----------+---------+
| Report Year:                      | 2003      | 2004     | 2005    |
+-----------------------------------+-----------+----------+---------+
| Total value of Industrial Output  | 32,668    | 35,280   | 38,100  |
|                                   |           |          |         |
| (\$US million)                    |           |          |         |
+-----------------------------------+-----------+----------+---------+
| New Pallet Production (million    | N/A       | N/A      | N/A     |
| units)                            |           |          |         |
+-----------------------------------+-----------+----------+---------+

#  Statistical Information (Trade tables and PS&D Tables)

## General Trade Tables

Table 1. Imports of Major Wood Products

  ------------------------- ----------- ----------- ----------- --------------
  CHINESE TRADE IN MAJOR                                        
  WOOD PRODUCTS                                                 

  Imports                   Units       2002        2003        Yearly Change

  Softwood Logs             1,000 CM    15,780      11,352      -28%

  Temperate Hardwood Logs   1,000 CM    6,276       6,595       5%

  Tropical Hardwood Logs    1,000 CM    2,273       2,717       20%

  **Total logs**            1,000 CM    24,329      20,664      -15%

  Softwood Lumber           1,000 CM    1,189       1,083       -9%

  Temperate Hardwood Lumber 1,000 CM    3,087       2910        -6%

  Tropical Hardwood Lumber  1,000 CM    1,120       1,206       8%

  **Total Lumber**          1,000 CM    5,396       5,199       -4%

  Softwood Plywood          1,000 CM    155         205         32%

  Temperate Hardwood        1,000 CM    116         93          -20%
  Plywood                                                       

  Tropical Hardwood Plywood 1,000 CM    79          223         182%

  **Total Plywood**         1,000 CM    350         521         49%

  Softwood Chips            Metric Tons 1,264       1,006       20%

  Hardwood Chips            Metric Tons 51,022      278,736     446%

  **Total chips**           Metric Tons 52,286      279,742     435%

  Fiberboard                Metric Tons 876,316     975,938     11%

  MDF                       Metric Tons 517,442     708,349     37%

  Particleboard             Metric Tons 383,357     405,600     6%

  OSB                       Metric Tons 41,001      43,675      7%

  Pulp Wood                 Metric Tons 4,875,166   5,345,153   10%

  Continuously Shaped Wood  Metric Tons 23,416      22,553      -4%

  Railway Ties              1,000 CM    88          86          -2%

  Softwood Poles            Metric Tons 18,727      5,632       -70%

  Hardwood Poles            Metric Tons 13,263      7,678       -42%

  **Total poles**           Metric Tons 31,990      13,310      -59%

  Softwood Veneer           Metric Tons 61,990      26,656      -57%

  Temperate Hardwood Veneer Metric Tons 27,220      44,958      65%

  Tropical Hardwood Veneer  Metric Tons 49,405      42,715      -14%
  Metric                                                        

  **Total Veneer**          Metric Tons 138,615     114,329     -18%
  ------------------------- ----------- ----------- ----------- --------------

**Table 2. Exports of Major Wood Products**

  ------------------------- ----------- ----------- ----------- -----------
  CHINESE TRADE IN MAJOR                                        
  WOOD PRODUCTS                                                 

  Exports                   Units       2002        2003        Yearly
                                                                Change

  Softwood Logs             1,000 CM    0           0           

  Temperate Hardwood Logs   1,000 CM    11          8           -27%

  Tropical Hardwood Logs    1,000 CM    0           0           

  **Total logs**            1,000 CM    11          8           -27%

  Softwood Lumber           1,000 CM    99          118         19%

  Temperate Hardwood Lumber 1,000 CM    322         349         8%

  Tropical Hardwood Lumber  1,000 CM    10          10          

  **Total Lumber**          1,000 CM    431         477         11%

  Softwood Plywood          1,000 CM    666         925         39%

  Temperate Hardwood        1,000 CM    47          385         719%
  Plywood                                                       

  Tropical Hardwood Plywood 1,000 CM    411         499         21%

  **Total Plywood**         1,000 CM    1,124       1,809       61%

  Softwood Chips            Metric Tons 22          565         2468%

  Hardwood Chips            Metric Tons 1,159,892   1,137,205   -2%

  **Total chips**           Metric Tons 1,159,914   1,137,770   -2%

  Fiberboard                Metric Tons 56,413      44,275      -22%

  MDF                       Metric Tons 38,679      17,842      -54%

  Particleboard             Metric Tons 33,116      43,769      32%

  OSB                       Metric Tons 2,216       1,431       -35%

  Pulp Wood                 Metric Tons 4,614       3,744       -19%

  Continuously Shaped Wood  Metric Tons 99,846      146,137     46%

  Railway Ties              1,000 CM    18          20          11%

  Softwood Poles            Metric Tons 3,337       5,711       71%

  Hardwood Poles            Metric Tons 8,193       8,168       0%

  **Total poles**           Metric Tons 11,548      13,899      20%

  Softwood Veneer           Metric Tons 1,123       2,530       125%

  Temperate Hardwood Veneer Metric Tons 16,090      44,642      177%

  Tropical Hardwood Veneer  Metric Tons 23,924      21,051      -12%
  Metric                                                        

  **Total Veneer**          Metric Tons 41,137      68,223      66%
  ------------------------- ----------- ----------- ----------- -----------

**Table 3. Tariffs and Taxes**

+---------+--------------------------+-----+-----+-----+-----+-----+
| FOREST  |                          |     |     |     |     |     |
| PRODUCT |                          |     |     |     |     |     |
| TARIFFS |                          |     |     |     |     |     |
| AND     |                          |     |     |     |     |     |
| TAXES   |                          |     |     |     |     |     |
| (p      |                          |     |     |     |     |     |
| ercent) |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| C       | Product Description      | Tar | Tar | Ot  | To  | Exp |
| ountry: |                          | iff | iff | her | tal | ort |
|         |                          | for | for | Imp | C   | Tax |
| P. R.   |                          | 2   | 2   | ort | ost |     |
| China   |                          | 003 | 004 | Tax | of  |     |
|         |                          |     |     | es/ | Imp |     |
|         |                          |     |     |     | ort |     |
|         |                          |     |     | F   |     |     |
|         |                          |     |     | ees |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| Report  | 2004                     |     |     | VAT |     |     |
| Year:   |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4401    |  Fuel wood, chips &      |  0  |  0  |  17 | 17  | 0   |
|         | sawdust, etc.            |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4403    |  Wood in the rough       |  0  |  0  |  13 | 13  | 0   |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4404    |  Hoopwood, poles, piles, |  8  | 8   | 17  | 25  | 0   |
|         | etc.                     |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4405    |  Wood wool, wood flour   |  8  | 8   | 17  | 25  | 0   |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4406    |  Railway or tramway      |  0  | 0   | 17  | 17  | 0   |
|         | sleepers                 |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4407    |  Sawn wood \>6 mm thick  |  0  |  0  |  17 | 17  | 0   |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4408    |  Sheets for veneering,   |     |     |     |     |     |
|         | plywood                  |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Coniferous: Veneer       |     |     |     |     |     |
|         | sheets                   |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Of laminated wood of     | 8   | 8   | 17  | 25  | 0   |
| 4081011 | plywood                  |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 4   | 4   | 17  | 21  | 0   |
| 4081019 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Sheets for plywood       | 4   | 4   | 17  | 21  | 0   |
| 4081020 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 4   | 4   | 17  | 21  | 0   |
| 4081090 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Tropical wood: dark red  |     |     |     |     |     |
|         | Meranti, Light red       |     |     |     |     |     |
|         | Meranti and Meranti      |     |     |     |     |     |
|         | Bakau: Veneer sheets     |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Of laminated wood of     | 10  | 10  | 17  | 27  | 0   |
| 4083111 | plywood                  |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 4   | 4   | 17  | 21  | 0   |
| 4083119 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Sheets for plywood       | 4   | 4   | 17  | 21  | 0   |
| 4083120 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 4   | 4   | 17  | 21  | 0   |
| 4083190 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Other tropical wood      |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Veneer sheets            |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Of laminated wood of     | 10  | 10  | 17  | 27  | 0   |
| 4083911 | plywood                  |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 4   | 4   | 17  | 21  | 0   |
| 4083919 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Sheets for plywood       | 4   | 4   | 17  | 21  | 0   |
| 4083920 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 4   | 4   | 17  | 21  | 0   |
| 4083990 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Other: Veneer sheets     |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Of laminated wood of     | 6.2 | 4   | 17  | 21  | 0   |
| 4089011 | plywood                  |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Temperate zone           | 3   | 3   | 17  | 20  | 0   |
| 4089012 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 3   | 3   | 17  | 20  | 0   |
| 4089019 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Sheets for plywood       |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Temperate zone           | 3   | 3   | 17  | 20  | 0   |
| 4089021 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 3   | 3   | 17  | 20  | 0   |
| 4089029 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4409    | Wood continuously shaped |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Coniferous               | 7.5 | 7.5 | 17  | 2   | 0   |
| 4091000 |                          |     |     |     | 4.5 |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Non-coniferous           | 6.2 | 4   | 17  | 21  | 0   |
| 4092000 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4410    | Particle board and       |     |     |     |     |     |
|         | similar board            |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | OSB and waferboard       |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Unworked or not further  | 6.8 | 4   | 17  | 21  | 0   |
| 4102100 | worked than sanded       |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 6.8 | 4   | 17  | 21  | 0   |
| 4102900 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Other                    |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Unworked or not further  | 6.8 | 4   | 17  | 21  | 0   |
| 4103100 | worked than sanded       |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Surface-covered with     | 6.8 | 4   | 17  | 21  | 0   |
| 4103200 | melamine-impregnated     |     |     |     |     |     |
|         | paper                    |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Surface-covered with     | 6.8 | 4   | 17  | 21  | 0   |
| 4103300 | decorative laminates of  |     |     |     |     |     |
|         | plastics                 |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 6.8 | 4   | 17  | 21  | 0   |
| 4103900 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 9.6 | 7.5 | 17  | 2   | 0   |
| 4109000 |                          |     |     |     | 4.5 |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4411    | Fiberboard of wood       |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Density exceeding        |     |     |     |     |     |
|         | 0.8g/cm3                 |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Not mechanically worked  | 6.2 | 4   | 17  | 21  | 0   |
| 4111100 | or surface covered       |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 9.6 | 7.5 | 17  | 2   | 0   |
| 4111900 |                          |     |     |     | 4.5 |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | 0.5                      |     |     |     |     |     |
|         | g/cm3\<density\<0.8g/cm3 |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Not mechanically worked  | 6.8 | 4   | 17  | 21  | 0   |
| 4112100 | or surface covered       |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 6.8 | 4   | 17  | 21  | 0   |
| 4112900 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | 0.35                     |     |     |     |     |     |
|         | g/cm3\<density\<0.5g/cm3 |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Not mechanically worked  | 7.5 | 7.5 | 17  | 2   | 0   |
| 4113100 | or surface covered       |     |     |     | 4.5 |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 7.5 | 7.5 | 17  | 2   | 0   |
| 4113900 |                          |     |     |     | 4.5 |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Other                    |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Not mechanically worked  | 7.5 | 7.5 | 17  | 2   | 0   |
| 4119100 | or surface covered       |     |     |     | 4.5 |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 4   | 4   | 17  | 21  | 0   |
| 4119900 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4412    | Plywood, veneered panels |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Solely consisted of      |     |     |     |     |     |
|         | sheets, each ply not     |     |     |     |     |     |
|         | exceeding 6 mm thickness |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | With at least one outer  | 12  | 12  | 17  | 29  | 0   |
| 4121300 | ply of tropical wood     |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 6.2 | 4   | 17  | 21  | 0   |
| 4121410 |                          |     |     |     |     |     |
|         |                          |     |     |     |     |     |
| /90     |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Other, with at least one |     |     |     |     |     |
|         | outer ply of             |     |     |     |     |     |
|         | non-coniferous wood      |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | With at least one ply of | 10  | 10  | 17  | 27  | 0   |
| 4122200 | tropical wood            |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other, containing at     | 10  | 10  | 17  | 27  | 0   |
| 4122300 | least one payer of       |     |     |     |     |     |
|         | particle board           |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Other                    |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other, temperate zone    | 10  | 10  | 17  | 27  | 0   |
| 4122910 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 10  | 10  | 17  | 27  | 0   |
| 4122990 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
|         | Other                    |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | With at least one ply of | 8   | 8   | 17  | 25  | 0   |
| 4129200 | tropical wood            |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other, containing at     | 10  | 10  | 17  | 27  | 0   |
| 4129300 | least one layer of       |     |     |     |     |     |
|         | particle board           |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 6.2 | 4   | 17  | 21  | 0   |
| 4129910 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Other                    | 6.2 | 4   | 17  | 21  | 0   |
| 4129990 |                          |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4413    | Densified wood blocks,   | 6   | 6   | 17  | 23  | 0   |
|         | etc.                     |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4414    | Wooden frames            | 20  | 20  | 17  | 37  | 0   |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4415    | Packing cases,           | 9.6 | 7.5 | 17  | 2   | 0   |
|         | cable-drums, pallets,    |     |     |     | 4.5 |     |
|         | pallet collars           |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4416    | Casks, barrels, vats,    | 16  | 16  | 17  | 33  | 0   |
|         | etc.                     |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4417    | Tools, tool handles,     | 16  | 16  | 17  | 33  | 0   |
|         | etc.                     |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4418    | Builder's joinery,       | 6.8 | 4   | 17  | 21  | 0   |
|         | carpentry                |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Shuttering for concrete  | 7.2 | 4   | 17  | 21  | 0   |
| 4184000 | constructional work      |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Shingles and shakes      | 9.6 | 7.5 | 17  | 2   | 0   |
| 4185000 |                          |     |     |     | 4.5 |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4419    | Tableware, kitchenware   | 7   | 3.5 | 17  | 2   | 0   |
|         |                          |     |     |     | 0.5 |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4420    | Wood marquetry and       | 7   | 3.5 | 17  | 2   | 0   |
|         | inlaid wood, statuettes  |     |     |     | 0.5 |     |
|         | and other ornaments      |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Wood marquetry and       | 2.4 | 0   | 17  | 17  | 0   |
| 4209010 | inlaid wood of           |     |     |     |     |     |
|         | strain-sensitive wood    |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4421    | Other articles of wood   | 7   | 3.5 | 17  | 2   | 0   |
|         |                          |     |     |     | 0.5 |     |
+---------+--------------------------+-----+-----+-----+-----+-----+
| 4       | Spools, cops, bobbins,   | 2   | 0   | 17  | 17  | 0   |
| 4219010 | sewing thread reels      |     |     |     |     |     |
+---------+--------------------------+-----+-----+-----+-----+-----+

##  LOGS

Table 4. Softwood logs production, Supply and Distribution

+-----------------+--------+--------+--------+--------+--------+--------+
| #               |        |        |        |        |        |        |
| ##### PSD Table |        |        |        |        |        |        |
+-----------------+--------+--------+--------+--------+--------+--------+
| ###### Count    | **     |        |        |        |        |        |
| ry {#country-1} | China, |        |        |        |        |        |
|                 | P      |        |        |        |        |        |
|                 | eoples |        |        |        |        |        |
|                 | Re     |        |        |        |        |        |
|                 | public |        |        |        |        |        |
|                 | of**   |        |        |        |        |        |
+-----------------+--------+--------+--------+--------+--------+--------+
| **Commodity**   | **So   |        |        | Unit:  |        |        |
|                 | ftwood |        |        | 1000   |        |        |
|                 | Logs** |        |        | CUBIC  |        |        |
|                 |        |        |        | METERS |        |        |
+-----------------+--------+--------+--------+--------+--------+--------+
|                 | 2003   | R      | 2004   | Es     | 2005   | Fo     |
|                 |        | evised |        | timate |        | recast |
+-----------------+--------+--------+--------+--------+--------+--------+
|                 | USDA   | Post   | USDA   | Post   | USDA   | Post   |
|                 | Of     | Es     | Of     | Es     | Of     | Es     |
|                 | ficial | timate | ficial | timate | ficial | timate |
|                 | \      | \      | \      | \      | \      | \      |
|                 | [Old\] | [New\] | [Old\] | [New\] | [Old\] | [New\] |
+-----------------+--------+--------+--------+--------+--------+--------+
| ###### Ma       |        | 0      |        | 0      |        | 0      |
| rket Year Begin |        | 1/2003 |        | 1/2004 |        | 1/2005 |
+-----------------+--------+--------+--------+--------+--------+--------+
| Production      | 26791  | 28079  | 27594  | 29760  | 0      | 32736  |
+-----------------+--------+--------+--------+--------+--------+--------+
| Imports         | 15298  | 11352  | 18357  | 11920  | 0      | 13112  |
+-----------------+--------+--------+--------+--------+--------+--------+
| TOTAL SUPPLY    | 42089  | 39431  | 45951  | 41680  | 0      | 45848  |
+-----------------+--------+--------+--------+--------+--------+--------+
| Exports         | 0      | 0      | 1      | 1      | 0      | 1      |
+-----------------+--------+--------+--------+--------+--------+--------+
| Domestic        | 42089  | 39431  | 45950  | 41679  | 0      | 45847  |
| Consumption     |        |        |        |        |        |        |
+-----------------+--------+--------+--------+--------+--------+--------+
| TOTAL           | 42089  | 39431  | 45951  | 41680  | 0      | 45848  |
| DISTRIBUTION    |        |        |        |        |        |        |
+-----------------+--------+--------+--------+--------+--------+--------+

Table 5. Softwood logs imports

  ----------------------- ------------------------ -----------------------
  Import Trade Matrix                              

  Country:                China, People\'s         Unit: Cubic Meters
                          Republic of              

  Commodity               Softwood Logs            

  Import for              CY2002                   CY2003

  United States           60,381                   17,166

  Others:                                          

  Russia                  13,844,783               9,513,746

  New Zealand             1,606,334                1,419,086

  Australia               75,172                   195,151

  Myanmar                 55,984                   65,339

  North Korea             51,384                   48,192

  Canada                  20,149                   64,124

  Kazakstan               29,578                   

  South Africa            26,137                   

  Germany                 1,398                    16,486

  Total for others:       15,710,919               11,322,124

  Others not listed       9,018                    13,049

  Grand Total             15,780,318               11,352,339
  ----------------------- ------------------------ -----------------------

**Table 6. Softwood logs exports**

  ----------------------- ------------------------ -----------------------
  Export Trade Matrix                              

  Country:                China, People\'s         Unit: Cubic Meters
                          Republic of              

  Commodity               Softwood Logs            

  Export for              CY2002                   CY2003

  North Korea             0                        392

  Taiwan                  0                        25

  Grand Total             0                        417
  ----------------------- ------------------------ -----------------------

**Table 7. Temperate Hardwood Logs Production, Supply and Distribution**

+----------------+--------+--------+--------+--------+--------+--------+
| ##             |        |        |        |        |        |        |
| #### PSD Table |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Country**    | **     |        |        |        |        |        |
|                | China, |        |        |        |        |        |
|                | P      |        |        |        |        |        |
|                | eoples |        |        |        |        |        |
|                | Re     |        |        |        |        |        |
|                | public |        |        |        |        |        |
|                | of**   |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Commodity**  | **Tem  |        |        | 1000   |        |        |
|                | perate |        |        | CUBIC  |        |        |
|                | Ha     |        |        | METERS |        |        |
|                | rdwood |        |        |        |        |        |
|                | Logs** |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
|                | 2003   | R      | 2004   | Es     | 2005   | Fo     |
|                |        | evised |        | timate |        | recast |
+----------------+--------+--------+--------+--------+--------+--------+
|                | USDA   | Post   | USDA   | Post   | USDA   | Post   |
|                | Of     | Es     | Of     | Es     | Of     | Es     |
|                | ficial | timate | ficial | timate | ficial | timate |
|                | \      | \      | \      | \      | \      | \      |
|                | [Old\] | [New\] | [Old\] | [New\] | [Old\] | [New\] |
+----------------+--------+--------+--------+--------+--------+--------+
| **Market Year  |        | 0      |        | 0      |        | 0      |
| Begin**        |        | 1/2003 |        | 1/2004 |        | 1/2005 |
+----------------+--------+--------+--------+--------+--------+--------+
| Production     | 13437  | 12960  | 13840  | 13740  | 0      | 14840  |
+----------------+--------+--------+--------+--------+--------+--------+
| Imports        | 7532   | 6596   | 9038   | 7120   | 0      | 7832   |
+----------------+--------+--------+--------+--------+--------+--------+
| TOTAL SUPPLY   | 20969  | 19556  | 22878  | 20860  | 0      | 22672  |
+----------------+--------+--------+--------+--------+--------+--------+
| Exports        | 8      | 8      | 8      | 8      | 0      | 8      |
+----------------+--------+--------+--------+--------+--------+--------+
| Domestic       | 20961  | 19548  | 22870  | 20852  | 0      | 22664  |
| Consumption    |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| TOTAL          | 20969  | 19556  | 22878  | 20860  | 0      | 22672  |
| DISTRIBUTION   |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+

**Table 8. Temperate Hardwood Logs Imports**

  --------------------- ------------------------- -----------------------
  Import Trade Matrix                              

  Country:              China, People\'s Republic Unit: Cubic Meters
                        of                        

  Commodity             Temperate Hardwood Logs    

  Import for            CY2002                    CY2003

  United States         58,935                    67,056

  Others:                                          

  Malaysia              1,567,969                 1,593,230

  Russia                961,431                   1,491,557

  Papua New Guinea      1,096,923                 1,318,557

  Myanmar               488,284                   661,685

  Liberia               624,757                   345,268

  Germany               390,170                   320,178

  Solomon Island        155,549                   282,641

  Gabon                 208,290                   99,035

  Equatorial Guinea     171,339                   96,327

  Australia             56,152                    115,157

  Total for others      5,720,864                 6,323,635

  Others not listed     496,334                   304,994

  Grand Total           6,276,133                 6,595,685
  --------------------- ------------------------- -----------------------

**Table 9. Temperate Hardwood Logs Exports**

  --------------------- ------------------------- -----------------------
  Export Trade Matrix                              

  Country:              China, People\'s Republic Unit: Cubic Meters
                        of                        

  Commodity             Temperate Hardwood Logs    

  Export for            CY2002                    CY2003

  Japan                 10,550                    7,711

  Malaysia              340                       157

  Taiwan                202                       260

  Thailand                                        254

  South Korea           11                         

  United States                                   2

  Hong Kong             2                          

  Grand Total           11,105                    8,384
  --------------------- ------------------------- -----------------------

**Table 10. Tropical Hardwood Production, Supply and Distribution**

+----------------+--------+--------+--------+--------+--------+--------+
| ##             |        |        |        |        |        |        |
| #### PSD Table |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Country**    | **     |        |        |        |        |        |
|                | China, |        |        |        |        |        |
|                | P      |        |        |        |        |        |
|                | eoples |        |        |        |        |        |
|                | Re     |        |        |        |        |        |
|                | public |        |        |        |        |        |
|                | of**   |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Commodity**  | **Tr   |        |        | 1000   |        |        |
|                | opical |        |        | CUBIC  |        |        |
|                | Ha     |        |        | METERS |        |        |
|                | rdwood |        |        |        |        |        |
|                | Logs** |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
|                | 2003   | R      | 2004   | Es     | 2005   | Fo     |
|                |        | evised |        | timate |        | recast |
+----------------+--------+--------+--------+--------+--------+--------+
|                | USDA   | Post   | USDA   | Post   | USDA   | Post   |
|                | Of     | Es     | Of     | Es     | Of     | Es     |
|                | ficial | timate | ficial | timate | ficial | timate |
|                | \      | \      | \      | \      | \      | \      |
|                | [Old\] | [New\] | [Old\] | [New\] | [Old\] | [New\] |
+----------------+--------+--------+--------+--------+--------+--------+
| **Market Year  |        | 0      |        | 0      |        | 0      |
| Begin**        |        | 1/2003 |        | 1/2004 |        | 1/2005 |
+----------------+--------+--------+--------+--------+--------+--------+
| Production     | 814    | 2160   | 820    | 2290   | 0      | 2520   |
+----------------+--------+--------+--------+--------+--------+--------+
| Imports        | 3269   | 2717   | 3759   | 2990   | 0      | 3440   |
+----------------+--------+--------+--------+--------+--------+--------+
| TOTAL SUPPLY   | 4083   | 4877   | 4579   | 5280   | 0      | 5960   |
+----------------+--------+--------+--------+--------+--------+--------+
| Exports        | 0      | 0      | 0      | 0      | 0      | 0      |
+----------------+--------+--------+--------+--------+--------+--------+
| Domestic       | 4083   | 4877   | 4579   | 5280   | 0      | 5960   |
| Consumption    |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| TOTAL          | 4083   | 4877   | 4579   | 5280   | 0      | 5960   |
| DISTRIBUTION   |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+

**Table 11. Tropical Hardwood Logs Imports**

  ----------------- ----------------------- --- --------------------------
  Import Trade                                  
  Matrix                                        

  Country:          China, People\'s            Unit: Cubic Meters
                    Republic of                 

  Commodity         Tropical Hardwood Logs       

  Import for        CY2002                      CY2003

  United States     0                           349

  Others:                                        

  Malaysia          551,902                     1,105,210

  Gabon             879,104                     626,741

  Equatorial Guinea 173,155                     323,847

  Congo             140,056                     241,681

  Indonesia         103,593                     80,418

  Myanmar           61,000                      101,289

  Cameroon          172,897                     81,986

  Papua New Guinea  31,074                      49,229

  Liberia           73,535                      49,859

  Mozambique        12,083                      15,388

  Laos              6,432                       11,515

  Vietnam           13,605                      10,052

  Total for Others  2,218,436                   2,697,215

  Others not listed 54,600                      19,128

  Grand Total       2,273,036                   2,716,692
  ----------------- ----------------------- --- --------------------------

**Table 11. Tropical Hardwood Logs Exports**

  ----------------- --------------------------- -------------------------
  Export Trade                                   
  Matrix                                        

  Country:          China, People\'s Republic   Unit: Cubic Meters
                    of                          

  Commodity         Tropical Hardwood Logs       

  Export for        CY2002                      CY2003

  United States     0                           0

  Grand Total       0                           0
  ----------------- --------------------------- -------------------------

##  LUMBER

**Table 12. Softwood Lumber Production, Supply and Distribution**

+-----------------+--------+--------+--------+--------+--------+--------+
| #               |        |        |        |        |        |        |
| ##### PSD Table |        |        |        |        |        |        |
+-----------------+--------+--------+--------+--------+--------+--------+
| **Country**     | **     |        |        |        |        |        |
|                 | China, |        |        |        |        |        |
|                 | P      |        |        |        |        |        |
|                 | eoples |        |        |        |        |        |
|                 | Re     |        |        |        |        |        |
|                 | public |        |        |        |        |        |
|                 | of**   |        |        |        |        |        |
+-----------------+--------+--------+--------+--------+--------+--------+
| **Commodity**   | **So   |        |        | 1000   |        |        |
|                 | ftwood |        |        | CUBIC  |        |        |
|                 | Lu     |        |        | METERS |        |        |
|                 | mber** |        |        |        |        |        |
+-----------------+--------+--------+--------+--------+--------+--------+
|                 | 2003   | R      | 2004   | Es     | 2005   | Fo     |
|                 |        | evised |        | timate |        | recast |
+-----------------+--------+--------+--------+--------+--------+--------+
|                 | USDA   | Post   | USDA   | Post   | USDA   | Post   |
|                 | Of     | Es     | Of     | Es     | Of     | Es     |
|                 | ficial | timate | ficial | timate | ficial | timate |
|                 | \      | \      | \      | \      | \      | \      |
|                 | [Old\] | [New\] | [Old\] | [New\] | [Old\] | [New\] |
+-----------------+--------+--------+--------+--------+--------+--------+
| **Market Year   |        | 0      |        | 0      |        | 0      |
| Begin**         |        | 1/2003 |        | 1/2004 |        | 1/2005 |
+-----------------+--------+--------+--------+--------+--------+--------+
| Production      | 5229   | 6761   | 0      | 8450   | 0      | 10980  |
+-----------------+--------+--------+--------+--------+--------+--------+
| Imports         | 960    | 1083   | 0      | 1190   | 0      | 1370   |
+-----------------+--------+--------+--------+--------+--------+--------+
| TOTAL SUPPLY    | 6189   | 7844   | 0      | 9640   | 0      | 12350  |
+-----------------+--------+--------+--------+--------+--------+--------+
| Exports         | 88     | 118    | 0      | 0      | 0      | 0      |
+-----------------+--------+--------+--------+--------+--------+--------+
| Domestic        | 6101   | 7726   | 0      | 9640   | 0      | 12350  |
| Consumption     |        |        |        |        |        |        |
+-----------------+--------+--------+--------+--------+--------+--------+
| TOTAL           | 6189   | 7844   | 0      | 9640   | 0      | 12350  |
| DISTRIBUTION    |        |        |        |        |        |        |
+-----------------+--------+--------+--------+--------+--------+--------+

**Table 13. Softwood Lumber Imports**

  ------------------- ------------------------- -------------------------
  Import Trade Matrix                           

  Country:            China, People\'s Republic Unit: Cubic Meters
                      of                        

  Commodity           Softwood Lumber           

  Import for          CY2002                    CY2003

  United States       33,584                    49,404

  Others:                                       

  Russia              456,854                   333,194

  New Zealand         186,129                   156,249

  Canada              127,268                   211,177

  Indonesia           103,766                   26,267

  Chile               48,970                    65,820

  Finland             44,162                    42,487

  Myanmar             45,533                    37,529

  Brazil              25,190                    41,925

  North Korea         26,795                    15,836

  Singapore           6,912                     25,330

  Argentina           6,578                     21,685

  South Africa        8,207                     14,318

  Sweden              10,281                    10,890

  Kazakstan           16,890                    

  Malaysia            15,534                    671

  Total for Others    1,129,069                 1,003,378

  Others not listed   26,239                    30,500

  Grand Total         1,188,892                 1,083,282
  ------------------- ------------------------- -------------------------

**Table 14. Softwood Lumber Exports**

  ------------------- ------------------------- -------------------------
  Export Trade Matrix                           

  Country:            China, People\'s Republic Unit: Cubic Meters
                      of                        

  Commodity           Softwood Lumber           

  Import for          CY2002                    CY2003

  United States       820                       761

  Others:                                       

  Japan               85,650                    108,917

  South Korea         10,171                    5,993

  Taiwan              710                       1,455

  Hong Kong           398                       417

  Vietnam             402                       143

  Philippines         440                       \-

  Total for Others    97,771                    116,925

  Others not listed   403                       617

  Grand Total         98,994                    118,303
  ------------------- ------------------------- -------------------------

**Table 15. Temperate Hardwood Lumber Production, Supply and
Distribution**

+----------------+--------+--------+--------+--------+--------+--------+
| ##             |        |        |        |        |        |        |
| #### PSD Table |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Country**    | **     |        |        |        |        |        |
|                | China, |        |        |        |        |        |
|                | P      |        |        |        |        |        |
|                | eoples |        |        |        |        |        |
|                | Re     |        |        |        |        |        |
|                | public |        |        |        |        |        |
|                | of**   |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Commodity**  | **Tem  |        |        | 1000   |        |        |
|                | perate |        |        | CUBIC  |        |        |
|                | Ha     |        |        | METERS |        |        |
|                | rdwood |        |        |        |        |        |
|                | Lu     |        |        |        |        |        |
|                | mber** |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
|                | 2003   | R      | 2004   | Es     | 2005   | Fo     |
|                |        | evised |        | timate |        | recast |
+----------------+--------+--------+--------+--------+--------+--------+
|                | USDA   | Post   | USDA   | Post   | USDA   | Post   |
|                | Of     | Es     | Of     | Es     | Of     | Es     |
|                | ficial | timate | ficial | timate | ficial | timate |
|                | \      | \      | \      | \      | \      | \      |
|                | [Old\] | [New\] | [Old\] | [New\] | [Old\] | [New\] |
+----------------+--------+--------+--------+--------+--------+--------+
| **Market Year  |        | 0      |        | 0      |        | 0      |
| Begin**        |        | 1/2003 |        | 1/2004 |        | 1/2005 |
+----------------+--------+--------+--------+--------+--------+--------+
| Production     | 3816   | 3944   | 4168   | 4930   | 0      | 6400   |
+----------------+--------+--------+--------+--------+--------+--------+
| Imports        | 3241   | 2910   | 3727   | 3055   | 0      | 3300   |
+----------------+--------+--------+--------+--------+--------+--------+
| TOTAL SUPPLY   | 7057   | 6854   | 7895   | 7985   | 0      | 9700   |
+----------------+--------+--------+--------+--------+--------+--------+
| Exports        | 345    | 346    | 380    | 350    | 0      | 380    |
+----------------+--------+--------+--------+--------+--------+--------+
| Domestic       | 6712   | 6508   | 7515   | 7635   | 0      | 9320   |
| Consumption    |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| TOTAL          | 7057   | 6854   | 7895   | 7985   | 0      | 9700   |
| DISTRIBUTION   |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+

**Table 16. Temperate Hardwood Lumber Imports**

  ------------------- --------------------------- ------------------------
  Import Trade Matrix                             

  Country:            China, People\'s Republic   Unit: Cubic Meters
                      of                          

  Commodity           Temperate Hardwood Lumber   

  Import for          CY2002                      CY2003

  United States       563,111                     606,127

  Others:                                         

  Thailand            530,296                     637,590

  Indonesia           646,638                     370,853

  Malaysia            318,206                     257,420

  Germany             155,376                     118,638

  Myanmar             127,062                     146,077

  Canada              141,376                     108,504

  Russia              94,796                      113,409

  Brazil              53,535                      102,587

  Romania             80,447                      65,185

  New Zealand         35,116                      65,500

  Singapore           14,565                      68,029

  France              37,958                      20,900

  Taiwan              30,092                      25,070

  Hong Kong           28,932                      20,334

  Australia           20,001                      18,725

  Italy               27,369                      10,871

  Philippines         6,950                       25,448

  Austria             18,540                      10,758

  Total for others    2,367,255                   2,185,898

  Others not listed   156,478                     117,516

  Grand Total         3,086,844                   2,909,541

                                                  
  ------------------- --------------------------- ------------------------

**Table 17. Temperate Hardwood Lumber Export**

  ------------------- --------------------------- ------------------------
  Export Trade Matrix                             

  Country:            China, People\'s Republic   Unit: Cubic Meters
                      of                          

  Commodity           Temperate Hardwood Lumber   

  Export for          CY2002                      CY2003

  United States       3,463                       4,111

  Others:                                         

  Japan               186,298                     211,637

  South Korea         98,835                      88,163

  Taiwan              13,351                      14,120

  Hong Kong           7,752                       7,310

  Italy               1,264                       7,836

  Germany             1,566                       4,996

  Thailand            3,272                       2,286

  Vietnam             1,359                       2,551

  Malaysia            1,210                       1,662

  Total for others    314,907                     340,561

  Others not listed   4,041                       3,919

  Grand Total         320,158                     346,142
  ------------------- --------------------------- ------------------------

**Table 18. Tropical Hardwood Lumber Production, Supply and
Distribution**

+----------------+--------+--------+--------+--------+--------+--------+
| ##             |        |        |        |        |        |        |
| #### PSD Table |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Country**    | **     |        |        |        |        |        |
|                | China, |        |        |        |        |        |
|                | P      |        |        |        |        |        |
|                | eoples |        |        |        |        |        |
|                | Re     |        |        |        |        |        |
|                | public |        |        |        |        |        |
|                | of**   |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Commodity**  | **Tr   |        |        | 1000   |        |        |
|                | opical |        |        | CUBIC  |        |        |
|                | Ha     |        |        | METERS |        |        |
|                | rdwood |        |        |        |        |        |
|                | Lu     |        |        |        |        |        |
|                | mber** |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
|                | 2003   | R      | 2004   | Es     | 2005   | Fo     |
|                |        | evised |        | timate |        | recast |
+----------------+--------+--------+--------+--------+--------+--------+
|                | USDA   | Post   | USDA   | Post   | USDA   | Post   |
|                | Of     | Es     | Of     | Es     | Of     | Es     |
|                | ficial | timate | ficial | timate | ficial | timate |
|                | \      | \      | \      | \      | \      | \      |
|                | [Old\] | [New\] | [Old\] | [New\] | [Old\] | [New\] |
+----------------+--------+--------+--------+--------+--------+--------+
| **Market Year  |        | 0      |        | 0      |        | 0      |
| Begin**        |        | 1/2003 |        | 1/2004 |        | 1/2005 |
+----------------+--------+--------+--------+--------+--------+--------+
| Production     | 190    | 564    | 219    | 705    | 0      | 910    |
+----------------+--------+--------+--------+--------+--------+--------+
| Imports        | 1346   | 1206   | 1817   | 1380   | 0      | 1650   |
+----------------+--------+--------+--------+--------+--------+--------+
| TOTAL SUPPLY   | 1536   | 1770   | 2036   | 2085   | 0      | 2560   |
+----------------+--------+--------+--------+--------+--------+--------+
| Exports        | 10     | 10     | 11     | 10     | 0      | 10     |
+----------------+--------+--------+--------+--------+--------+--------+
| Domestic       | 1526   | 1760   | 2025   | 2075   | 0      | 2550   |
| Consumption    |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| TOTAL          | 1536   | 1770   | 2036   | 2085   | 0      | 2560   |
| DISTRIBUTION   |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+

**Table 19. Tropical Hardwood Lumber Imports**

  --------------------- ------------------------ ------------------------
  Import Trade Matrix                            

  Country:              China, People\'s         Unit: Cubic Meters
                        Republic of              

  Commodity             Tropical Hardwood Lumber 

  Import for            CY2002                   CY2003

  United States         30,097                   14,094

  Others:                                        

  Indonesia             669,327                  679,053

  Malaysia              155,640                  178,590

  Brazil                78,480                   136,619

  Myanmar               56,046                   44,465

  Thailand              60,268                   33,657

  Taiwan                14,199                   17,641

  Cameroon              11,217                   17,081

  Canada                12,621                   6,682

  Gabon                 2,417                    15,379

  Philippines                                    13,761

  Cambodia              1,296                    12,329

  Total for others      1,061,511                1,155,257

  Others not listed     28,664                   36,890

  Grand Total           1,120,272                1,206,241
  --------------------- ------------------------ ------------------------

**Table 20. Tropical Hardwood Lumber Exports**

  --------------------- ------------------------ ------------------------
  Export Trade Matrix                            

  Country:              China, People\'s         Unit: Cubic Meters
                        Republic of              

  Commodity             Tropical Hardwood Lumber 

  Export for            CY2002                   CY2003

  United States         232                      298

  Others:                                        

  Hong Kong             6,441                    6,531

  Japan                 535                      1,056

  Taiwan                1,150                    349

  Mozambique            675                      

  Italy                 117                      174

  South Korea                                    232

  Total for others      8,918                    8,342

  Others not listed     466                      959

  Grand Total           9,616                    9,599
  --------------------- ------------------------ ------------------------

##  

## Plywood

Table 21. Softwood Plywood Production, Supply and Distribution

+----------------+--------+--------+--------+--------+--------+--------+
| ##             |        |        |        |        |        |        |
| #### PSD Table |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Country**    | **     |        |        |        |        |        |
|                | China, |        |        |        |        |        |
|                | P      |        |        |        |        |        |
|                | eoples |        |        |        |        |        |
|                | Re     |        |        |        |        |        |
|                | public |        |        |        |        |        |
|                | of**   |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Commodity**  | **So   |        |        | 1000   |        |        |
|                | ftwood |        |        | CUBIC  |        |        |
|                | Ply    |        |        | METERS |        |        |
|                | wood** |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
|                | 2003   | R      | 2004   | Es     | 2005   | Fo     |
|                |        | evised |        | timate |        | recast |
+----------------+--------+--------+--------+--------+--------+--------+
|                | USDA   | Post   | USDA   | Post   | USDA   | Post   |
|                | Of     | Es     | Of     | Es     | Of     | Es     |
|                | ficial | timate | ficial | timate | ficial | timate |
|                | \      | \      | \      | \      | \      | \      |
|                | [Old\] | [New\] | [Old\] | [New\] | [Old\] | [New\] |
+----------------+--------+--------+--------+--------+--------+--------+
| **Market Year  |        | 0      |        | 0      |        | 0      |
| Begin**        |        | 1/2003 |        | 1/2004 |        | 1/2005 |
+----------------+--------+--------+--------+--------+--------+--------+
| Production     | 1787   | 3153   | 0      | 3780   | 0      | 4725   |
+----------------+--------+--------+--------+--------+--------+--------+
| Imports        | 116    | 201    | 0      | 230    | 0      | 280    |
+----------------+--------+--------+--------+--------+--------+--------+
| TOTAL SUPPLY   | 1903   | 3354   | 0      | 4010   | 0      | 5005   |
+----------------+--------+--------+--------+--------+--------+--------+
| Exports        | 677    | 925    | 0      | 1100   | 0      | 1200   |
+----------------+--------+--------+--------+--------+--------+--------+
| Domestic       | 1226   | 2429   | 0      | 2910   | 0      | 3805   |
| Consumption    |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| TOTAL          | 1903   | 3354   | 0      | 4010   | 0      | 5005   |
| DISTRIBUTION   |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+

Table 22. Softwood Plywood Imports

  ------------------- ------------------------- -------------------------
  Import Trade Matrix                           

  Country:            China, People\'s Republic Unit: Cubic Meters
                      of                        

  Commodity           Softwood Plywood          

  Import for          CY2002                    CY2003

  United States       44                        1,493

  Others:                                       

  Indonesia           108,113                   117,011

  Malaysia            25,756                    54,720

  Taiwan              3,477                     10,591

  Cambodia            5,150                     2,369

  Russia              1,564                     5,433

  Japan               1,913                     3,817

  Canada              3,073                     1,157

  South Korea         1,297                     1,805

  China               798                       1,801

  Singapore           52                        2,262

  New Zealand         302                       1,522

  Thailand            1,634                     83

  Germany             1,402                     14

  Total for others    154,531                   202,585

  Others not listed   918                       915

  Grand Total         155,493                   204,993
  ------------------- ------------------------- -------------------------

**Table 23. Softwood Plywood Exports**

  ------------------- ------------------------- -------------------------
  Export Trade Matrix                           

  Country:            China, People\'s Republic Unit: Cubic Meters
                      of                        

  Commodity           Softwood Plywood          

  Export for          CY2002                    CY2003

  United States       64,372                    161,132

  Others:                                       

  South Korea         163,886                   146,565

  Hong Kong           104,154                   107,415

  Japan               62,119                    93,314

  Saudi Arabia        50,286                    47,752

  U.A.E               22,552                    56,727

  Yemen               46,131                    27,019

  Israel              26,735                    37,194

  Taiwan              32,015                    24,702

  Singapore           13,116                    28,819

  United Kingdom      10,941                    27,693

  Belgium             7,735                     20,619

  Jordan              8,719                     17,852

  Kuwait              2,247                     15,555

  Total for others    550,636                   651,226

  Others not listed   51,110                    112,398

  Grand Total         666,118                   924,756
  ------------------- ------------------------- -------------------------