平成 28 年度林野庁委託事業
違法伐採対策取組強化事業

Timber Industry, Timber Tradeand Timber Legality in China
中国における木材、木材製品の合法証明の確立に関する動向調査
報告書（英語版）

March, 2017
平成 29（2017）年 3 月
Japan Federation of Wood Industry Associations( JFWIA )一般社団法人全国木材組合連合会

Timber Industry, Timber Tradeand Timber Legality in China

Contents
1. Basic Information on International Timber Trade of China in 2015 ........................................... 1
1.1 Overview of Import of Timber Products in 2015 .............................................................. 7
1.1.1 Import of logs ....................................................................................................... 8
1.1.2 Import of swnwood ............................................................................................. 16
1.1.3 Import of wood-based panel............................................................................... 19
1.1.4 Import of wood pulp and waste paper ................................................................ 20
1.1.5 Import of paper, paperboard and paper products ............................................... 20
1.1.6 Import of wood chip............................................................................................ 21
1.1.7 Import of wooden furniture ................................................................................. 21
1.2 Overview of Export of Timber Products in 2015 ............................................................ 21
1.2.1 Export of wooden furniture ................................................................................. 21
1.2.2 Export of paper, paperboard and paper products ............................................... 22
1.2.3 Export of plywood .............................................................................................. 23
1.2.4 Export of fiberboard ........................................................................................... 24
1.2.5 Export of particleboard ....................................................................................... 26
1.3 Features of Timber Products Trade in China in 2015 .................................................... 26
1.4 Main Problems .............................................................................................................. 28
1.5 Preliminary Analysis for Timber Products Trade in China for 2016................................ 29
1.6 Basic Information on International Timber Trade of China in 2016 (soon)..................... 31
1.7 Comparison of Timber Products Trade in China for 11 Years in 2005-2015 .................. 31
1.7.1 Overview ............................................................................................................ 31
1.7.2 Logs imports ...................................................................................................... 37
1.7.3 Logs vs. sawnwood imports ............................................................................... 42
1.7.4 Sawnwood imports ............................................................................................. 43
1.7.5 Plywood imports................................................................................................. 46
1.7.6 Veneer imports ................................................................................................... 47
1.7.7 Wood chip imports ............................................................................................. 48
1.7.8 Furniture imports ................................................................................................ 49
1.7.9 Plywood exports................................................................................................. 51
1.7.10 Furniture exports .............................................................................................. 52
1.7.11 Other timber products exported to EU .............................................................. 53
1.7.12 Pulp and paper exports .................................................................................... 54
2. Status of Timber Industries in China ....................................................................................... 55
2.1 Current Status of Timber Industries in China by Geographic Region ............................ 56
2.1.1 Overview of timber industry in China ................................................................. 56
2.1.2 Timber products ................................................................................................. 59
2.1.3 Wood based panels ........................................................................................... 61
2.1.4 Wooden floor...................................................................................................... 68
2.1.5 Wooden door ..................................................................................................... 70
2.1.6 Furniture ............................................................................................................ 72

I2.2 Case Analysis of Timber Industry in Guangdong Province of China ............................. 77
2.2.1 General situation ................................................................................................ 77
2.2.2 Statistics of the Timber processing enterprises .................................................. 78
2.2.3 Rapid development of the furniture industry ...................................................... 78
2.2.4 Papermaking is the lead part of the timber industry in Guangdong.................... 85
2.2.5 The timber processing enterprises of Guangdong managed to address
the economic barriers to normalize its import and export ................................... 86
2.2.6 Conclusion ......................................................................................................... 87
2.3 Cases of External Investment and Business Integration by the Chinese Private
Enterprises ........................................................................................................ 88
2.3.1 An overview of oversea Investment by Chinese enterprises .............................. 89
2.3.2 An Overview of Forestry Investment by Chinese Enterprises in Russia............. 93
2.3.3 An overview of forestry investment by Chinese enterprises in Africa ................. 94
2.3.4 Overseas forestry investment policies of Government of China ........................ 95
2.3.5 Cases of overseas forestry investment by Chinese enterprises......................... 96
2.3.6 A case of successful overseas forestry investment by Chinese
enterprises - Nature Home (China) Co. Ltd. ................................................... 100
3. Illegal Logging Countermeasures Taken by the Government of China ................................. 104
3.1 Illegal Logging Countermeasures Taken by the Government of China ....................... 105
3.1.1 Enhanced administration of domestic forest resources to eradiate illegal
logging from the sources .................................................................................. 105
3.1.2 Strengthened administration of timber import and export trade to avoid
trade in illegal timber ........................................................................................ 109
3.1.3 Timely amendments of laws, regulations and policies ..................................... 110
3.1.4 Strict implementation of CITES ......................................................................... 111
3.1.5 Establishment of cooperation mechanisms ...................................................... 112
3.1.6 Enhanced guidance and services to increase enterprises’
consciousness of self-discipline and responsibility during practicing
overseas investment .................................................................................... 112
3.1.7 Enhanced organizing and guidance to improve Chinese enterprises’
capacity in meeting international requirements of timber legality ................... 113
3.1.8 On-going establishment of China’s Timber Legality Verification System .......... 114
3.1.9 Establishing and improving China Forest Certification Scheme ....................... 116
3.1.10 Implementation of government green procurement policy ............................. 117
3.1.11 Active participation into international cooperation........................................... 118
3.2 Progress in forest certification ..................................................................................... 124
3.2.1 Development history of China Forest Certification Scheme ............................. 125
3.2.2 Latest progress of forest certification in China ................................................. 128
3.2.3 Supervision and management of forest certification in China .......................... 129
3.2.4 Overview of China Forest Certification Scheme............................................... 130
3.2.5 Government support ........................................................................................ 136
3.2.6 Chain of custody certification standard and EU Timber Regulations................ 139
3.2.7 FSC development in China .............................................................................. 141
3.3 Actions Adopted by the Government and Industrial Organizations to Include

IITimber Legality into Legislation ....................................................................... 143
3.3.1 Actions adopted by government departments .................................................. 143
3.3.2 Actions adopted by industrial organizations ..................................................... 143
3.4 Key Factors in the Introduction of Forest Certification and Legality Assurance
Measures ........................................................................................................ 147
3.4.1 Key factors in introducing forest certification .................................................... 147
3.4.2 Key factors in introducing timber legality verification........................................ 148
4. External Measures and Actions............................................................................................. 150
4.1 Discussions on the Three Acts Focusing on Wood Legality ........................................ 151
4.1.1 EU Timber Regulation ...................................................................................... 151
4.1.2 The US Lacey Act ............................................................................................ 152
4.1.3 Australian Illegal Logging Prohibition Act ......................................................... 153
4.2 Measures and Actions Adopted by Governmental Departments ................................. 153
4.2.1 Cooperation with issuing countries of these laws in combating illegal
logging ........................................................................................................... 153
4.2.2 Assistance in enterprises’ adaptation ............................................................... 154
4.3 Measures and Actions Adopted by the Private Sector................................................. 154
4.3.1 Raw materials imported from low risk countries ............................................... 155
4.3.2 Application of third party forest certification ...................................................... 155
4.3.3 Application of third party legality verification..................................................... 155
4.3.4 Application of second party legality verification ................................................ 155
4.3.5 Establishment of first party due diligence system ............................................ 156
4.3.6 Involvement in NGOs’ initiatives ...................................................................... 157
4.3.7 Participation in relevant trainings ..................................................................... 157
4.4 Two Noteworthy Phenomena ...................................................................................... 157
Abbreviations ............................................................................................................................ 159
Appendix: Relevant Laws, Regulations, Policy Documents, Standards, and Guidelines(Separately Attached)IIITables
Table 1-1: Overview of China’s trade in forest products in 2015 ........................................... 3
Table 1-2: Overview of the import and export of major wood products in China in 2015 ....... 4
Table 1-3: Overview of the import of major WFP in China in 2015 ........................................ 5
Table 1-4: Overview of China’s export of major WFP in 2015 ............................................... 6
Table 1-5: Top 10 logs importing countries of China.............................................................. 8
Table 1-6: Top 10 countries where China imported coniferous logs ...................................... 9
Table 1-7: Top 10 countries where China imported broad-leaved logs ................................ 10
Table 1- 8: Top 10 countries where China imports tropical logs .......................................... 12
Table 1-9: Major customs involved in the import of coniferous logs in 2015 in China ......... 14
Table 1-10: Major customs involved in the import of broad-leaved logs in 2015 ................. 15
Table 1-11: Major exporting countries and regions and unit price of Chinese
plywood in 2015 ........................................................................................................ 23
Table 1-12: Major customs and unit price of exported plywood in China in 2015 ................ 24
Table 1-13: Forest products trade between China and emerging markets .......................... 28
Table 2-1: Output of major timber and products of China (2002-2015) ............................... 60
Table 2-2: Wood based panel output of China (2001-2015) ................................................ 61
Table 2-3: Wood flooring output of China (2010-2015)........................................................ 69
Table 2-4: Timber industry output of Guangdong ................................................................ 77
Table 2-5: Timber industry output value of Guangdong (1,000 yuan) .................................. 78
Table 2-6: Production value and structure of scale production furniture enterprises ........... 84
Table 2-7: Paper industry output value of Guangdong in 2014 and 2015 ........................... 85
Table 2-8: Timber and timber products import volume and value of Guangdong ................ 87
Table 2-9: Timber and timber products export volume and value of Guangdong ................ 87
Table 3-1: Three permits mechanism of logging................................................................ 107
Table 3-2: List of standards of China Forest Certification Scheme .................................... 132

IVFigures
Figure 1-1: Proportion of China’s trade value of forest products in the total value ofall goods between 2005 and 2015 ................................................................................. 2
Figure 1-2: Trade value of forest products in China from 2005 to 2015 ................................ 3
Figure 1-3: Import value of major timber products in China from 2005 to 2015 .................... 7
Figure 1-4: Proportion of the import value of major timber products in 2015......................... 8
Figure 1-5: Proportion of major log importing countries ........................................................ 9
Figure 1-6: Proportion of major coniferous logs importing countries in 2015 ...................... 10
Figure 1-7: Proportion of major broad-leaved importing logs countries in 2015 ................... 11
Figure 1-8: Proportion of major tropical logs importing countries in 2015 ........................... 12
Figure 1-9: Monthly changes of imported logs in 2015 in China ......................................... 13
Figure 1-10: Monthly changes of the import value of major varieties of coniferous
logs in 2015 in China ................................................................................................... 13
Figure 1-11: Monthly changes of the import value of major broad-leaved varieties ............ 14
Figure 1-12: Major customs involved in the import of coniferous logs in 2015 .................... 15
Figure 1-13: Import volue of sawnwood in China from 2005 to 2015 .................................. 16
Figure 1-14: Proportion of imported coniferous sawnwood from major countries in 2015 ... 17
Figure 1-15: Monthly changes of the import value of sawnwood in 2015 ............................ 17
Figure 1-16: Monthly changes of the import prices of coniferous sawnwood in 2015 ......... 18
Figure 1-17: Monthly changes of the import prices of broad-leaved sawnwood in 2015 ..... 18
Figure 1-18: Proportion of imported broad-leaved sawnwood from major countries
in 2015 ......................................................................................................................... 19
Figure 1-19: China’s major importing countries of wood pulp in 2015 ................................. 20
Figure 1-20: Major exporting countries of Chinese furniture in 2015 ................................... 21
Figure 1-21: Major ports for exported Chinese furniture in 2015 ......................................... 22
Figure 1-22: Major exporting countries and regions of Chinese paper, paperboard
and paper products in 2015 ......................................................................................... 22
Figure 1-23: Value share of major exporting countries of Chinese plywood in 2015 ........... 24
Figure 1-24: Monthly export of fiberboard in China ............................................................. 25
Figure 1-25: Major exporting countries of fiberboard in China in 2015 ................................ 25
Figure 1-26: Major exporting countries of particleboard from China in 2015 ....................... 26
Figure 1-27: Forest Product Imports: Timber products vs. pulp and paper products(2005-2015) ................................................................................................................. 31
Figure 1-28: Forest Product Exports: Timber products vs. pulp and paper products(2005-2015) ................................................................................................................. 32
Figure 1-29: Timber Product Imports vs Exports (2005-2015) ............................................ 33
Figure 1-30: Timber Product Imports by Top 4 Products (2005-2015) ................................. 34
Figure 1-31: Timber Product Imports from the EU by Product (2005-2015) ........................ 35
Figure 1-32: Timber Product Exports by Top Products (2005-2015) ................................... 36
Figure 1-33: Hardwood vs. Softwood Log Imports (2005-2015) .......................................... 37
Figure 1-34: Hardwood Log Imports by Region (2005-2015) .............................................. 38VFigure 1-35: Hardwood Log Imports: Top 15 source countries and EU (2005-2015) .......... 39
Figure 1-36: Hardwood Log Imports from Oceania: Top 4 Source Countries ...................... 40
Figure 1-37: Hardwood Log Imports from Africa by Source Country (2005-2015) .............. 41
Figure 1-38: Hardwood Logs vs. Hardwood Sawn Wood Imports (2005-2015) .................. 42
Figure 1-39: Hardwood vs. Softwood Sawn Wood Imports (2005-2015) ............................ 43
Figure 1-40: Hardwood Sawn Wood Imports by Source Region (2005-2015) .................... 44
Figure 1-41: Hardwood Sawn Wood Imports: Top 10 source countries (2005-2015) .......... 45
Figure 1-42: Plywood Imports by Source Country (2005-2015) .......................................... 46
Figure 1-43: Veneer Imports by Source Country (2005-2015) ............................................ 47
Figure 1-44: Wood Chip Imports: Top 10 source countries (2005-2015) ............................. 48
Figure 1-45: Furniture Imports by Country (and EU and Balkans) (2005-2015) .................. 49
Figure 1-46: Furniture Imports: Top 10 source countries (2005-2015) ................................ 50
Figure 1-47: Plywood Exports: Top 15 destination countries (2005-2015) .......................... 51
Figure 1-48: Furniture Exports by Country (and EU) (2005-2015) ...................................... 52
Figure 1-49: Other Timber products exported to EU: Top 10 destination countries ............. 53
Figure 1-50: Paper and Paperboard Exports: Top 15 destination countries (2005-2015).... 54
Figure 2-1: Timber industry by scale in China ..................................................................... 57
Figure 2-2: Wood-based panel production of China (2001-2015) ....................................... 62
Figure 2-3: Annual output of plywood of China (2001-2015) ............................................... 64
Figure 2-4: Fibreboard output of China (2001-2015) ........................................................... 65
Figure 2-5: Annual particleboard output of China (2001-2015) ........................................... 66
Figure 2-6: Annual blockboard output of China (2006-2015)............................................... 66
Figure 2-7: Wood furniture production of China 2006-2015 ................................................ 73
Figure 2-8: Amount of overseas investment in forestry by Chinese enterprises (indifferent countries) ....................................................................................................... 91
Figure 2-9: Amount of overseas investment in forestry by Chinese enterprises (indifferent continents) ..................................................................................................... 92
Figure 2-10: Number of companies in Russia investmed by Chinese enterprises .............. 94
Figure 3-1: Organizational structure of China Forest Certification Scheme ...................... 130
Figure 3-2: CFCC Logo ..................................................................................................... 135
Figure 3-3: Certification log for general timber products ................................................... 136
Figure 3-4: Certification logo for non-timber forest products ............................................. 136

VIBoxesBox 3-1: Seven principles of combating illegal logging of China ........................................ 110
Box 3-2: “Forest Certification Rules” by CNCA and SFA ................................................... 128
Box 3-3: Guidance to Rapidly Promote Forest Certification Work by SFA ........................ 137

VII1. Basic Information on International
Timber Trade of China in 2015

1

1. Basic Information on International Timber Tradeof China in 2015
In 2015, economic development was confronted with a lot of pressure on two fronts.
Internationally, global economic growth slowed down, and demand was sluggish.
International trade registered a negative growth and the price of commodity products
was low. Domestically, China’s economic development embraced new normal. The
government continued the deleveraging and de-capacity momentum, bringing down
demands and investment. Therefore, 2015 marked the most difficult year for China’s
timber trade in recent years. In particular, it witnessed a slump in timber import and an
overall decline of timber prices.
Overview of China’s Forest Products Trade in 2015
In China, forest products consist of wood forest products (WFP, generally called
timber products) and non-wood forest products (NWFP).
In 2015, the total trade value of forest products in China decreased year-on-year andits proportion in the total trade value of products nationwide also went down. The
same held true for both export and import, even though there was a bigger trade
surplus. Specifically, the trade value of forest products in China in 2015 was 123
billion USD, a regression to the 2011 level and a 10% year-on-year decline. Its
proportion in the total trade value of goods that year was 3.11%, 0.15 percentage
points lower than that in 2014 (please refer to Figure 1-1).

Figure 1-1: Proportion of China’s trade value of forest products in the total value of all
goods between 2005 and 2015
(unit: %)2

Among the total, export value was 64.8 billion USD, a yearly drop of 6%, taking up
2.85% of the total export value, 0.23 percentage points lower than the rate in 2014.
Import value was 58.2 billion USD, a yearly drop of 15%, occupying 3.85% of the total
import value, 0.39 percentage points higher than the rate in 2014 (please refer toFigure 1-2).
The import value fell much more than the export value. The heavy decline of theimport value of forest products was the major factor behind the reduction of total tradevalue of forest products.
The trade surplus was 6.6 billion USD, a 50% year-on-year increase, compared to 4.4
billion USD in 2014 (please refer to Figure 1-2).

Figure 1-2: Trade value of forest products in China from 2005 to 2015
(unit: 100 million US$)In 2015, among all forest products, wood products saw their trade value fall
dramatically. But they still were an absolute majority of the total, with an increasing
proportion of export value and a leveling up import proportion. For example, the tradevalue of wood products was 93.9 billion USD, a decline of 11 % year-on-year, taking
up 76% of the total trade value of forest products which was 5 percentage points
higher than the previous year. Among that value, the export value of wood products
was 54.5 billion USD, a decline of 7% year-on-year, taking up approximately 84% of
the total export value of all forest products which was 10 percentage points higher
than the previous year. The import value was 39.4 billion USD, a sharp drop of 17%,
accounting for 68% of total import value of all forest products which was 1 percentage
point higher than the previous year (please see Table 1-1). The trade surplus stood at
15 billion USD.
Table 1-1: Overview of China’s trade in forest products in 2015
(unit: 100 million USD)
Value

YearlyWood products

3

NWFP

comparison (%)

YearlyValue

Yearlycomparison

Proportion (%)

Value

(%)

comparison

Proportion (%)(%)

Export
value

648

-6

545

-7

84

103

-1

16

Import
value

582

-15

394

-17

68

187

-11

32

Total
trade
value

1230

-10

939

-11

76

291

-8

24

In 2015, the NWFP trade value in China was 29.1 billion USD, a decrease of 8%
year-on-year, accounting for 24% of the total trade value of forest products. Amongthat number, import value stood at 18.7 billion USD, a yearly decline of 11 % andtaking up about 32% of total import value of forest products. On the other hand,export value was 10.3 billion USD, a slight decrease of about 1 % year-on-year andaccounting for around 16% of total export value of all forest products. By that
calculation, trade deficit of NWFP in 2015 was 8.4 billion USD (please see Table 1-2).
Table 1-2: Overview of the import and export of major wood products in China in 2015
No.

Import value (100 million USD)

2014

2015

Export value (100 million USD)

Yearly2014

2015Yearlycompa

compariso

rison

n (%)

(%)
1

Wood

121

pulp
2

3

Log

Sawnwo

Waste
paper

127

5

Wooden

pulp
118

81

od
4

Wood

Log

Sawnwoo221

furniture
81

74

-31

Paper,

-8

178

Waste

Paper,

paperboard

paperboard

and paperand paperproducts

products

Plywood

225

2

187

5

59

7

55

-5

furniture

58

d
53

WoodenWood
products

52

-3

Wood

paper

products

455

Plywood56Paper,

43

Paper,

paperboa

paperboarrd and

d and

paper

paper

products

products

Wood

15

chip

Wood

40

-7

17

13

Fibreboard

16

Fibreboard

14

-14

chip

Total

431

391

-9

528

540

2

Import

474

394

-17

585

545

-7

91

99

90

99

63

67

77

83

and
exportvalue of
WFP
Proportion in all
WFP
Proportion in totalvalue

2015 was the worst year for China’s timber import, with all sorts of WFP having seen
their imports decline to varied degrees. The total import value of WFP was 39.4 billion
USD, a sharp drop of 17 % year on year, accounting for 68% of total import value ofall forest products. Meanwhile, the import of WFP was dominated by pulp, log,
sawnwood, waste paper, paper, paperboard and paper products, wood chips andother raw materials whose total import value totaled 35.8 billion USD and which took
about 91% of total import value of all WFP and 62% of all forest products. As to WFP
prices, almost all went down to various degrees, with the exception of wood chips
remaining unchanged. The biggest decline of average price was as high as 21% forlogs (please refer to Table 1-3).
Table 1-3: Overview of the import of major WFP in China in 2015
YearlyProducts

Unit

Importcompar

value

ison
(%)

WFP

Import value(100 million
USD)

394

5

Yearlycompar
ison
(%)

-17

YearlyProportion

Average unit

compariof import

price (USson ofvalue

dollar/ m3)

unit
price

Pulp

10000 tLog

10000 mSawnwood
Waste
paper

1978

10

127

5

32

644

-5

3

4422

-14

80

-31

21

182

-21

10000 m3

2566

74

-8

19

288

-9

13

180

-7

0

2893

5

10000 t

297

1

40

-7

10

1360

-7

10000 t

961

8

17

13

4

170

0

391

-9

99

10000 t-352

Paper,
paperboard
and paperproducts

Wood chips
Total

In 2015, the export value of WFP was 54.5 billion USD, a minor yearly increase of 2%.
Among that, wooden furniture (41%), paper, paperboard and paper products (34%),
wood products (11%), plywood (10%) and fiberboard (3%) were the primary forces
behind export increase, taking up about 99 % of total import value of WFP and 83% ofexport value of all forest products. The average unit prices of major WFP wereclimbing up to different degrees, except fiberboard whose price edged down by 2%(please see Table 1-4).
Table 1-4: Overview of China’s export of major WFP in 2015
Products

Unit

ExportYearlyExport value

YearlyProportion of

AverageYearlyvalue

comparis(100 million

comparison

exportunit pricecomparisoon (%)

USD)(%)

valuve(USn of unit

dollar)price (%)

2028

9

Timber

545

2

100

products
Wooden100

furniture

million

3.2

2

225

2

41

922

-4

187

5

34

piecesPaper,

10000

paperboa

3mrd andpaper
products

6

Wood

10000t

216

3

59

7

11

2736

1

10000

1070

-8

55

-5

10

510

2

402

-10

14

-12

3

356

-2

540

2

99

products
Plywoodm
Fiberboar

3

10000td
Total

1.1 Overview of Import of Timber Products in 2015
In the import value in 2015, the import of wood-based panel increase by 64% whilethat of logs decreased by 14% and that of sawnwood leveled up basically. But theimport value of pulp, wood chips, waste paper, paper, paperboard and paper
products went up by 10%, 8%, 5% and 1% respectively (please Figure 1-3).

Figure 1-3: Import value of major timber products in China from 2005 to 2015
The import value of WFP markedly dropped by 17% and it could be boiled down to
the 31% decline of the import of logs. The import value of wood chips and pulp went
up by 13% and 5% respectively while that of sawnwood, paper, paperboard andpaper products, and waste paper went down by 8%, 7% and 3% respectively. As tothe proportion of pulp, log, sawnwood, wastepaper, paper an paper products, woodchips and others among the import value of WFP, they were 32%, 21%, 19%, 13%,
10%, 4% and 1% respectively (please see Figure 1-4).

7

Paper
10.2%

Wood chip
4.3%

Others0.3%
Wood pulp
32.5%

Waste paper
13.3%

Sawnwood
18.9%

Logs
20.5%

Figure 1-4: Proportion of the import value of major timber products in 2015
1.1.1 Import of logs
In 2015, the total import value of various types of logs was 44.22 million m3 at a valueof 8 billion USD, a decrease of 14% and 31% respectively year-on-year. For details,
the import value of coniferous logs was 29.91 million m3, contributing 68% to the total
import value of logs and a decrease of 17% year-on-year. Another 14.31 million m3 ofbroad-leaved logs were imported, taking up 32% of the total imported logs and adecrease of 7% year-on-year. The import value of coniferous logs declined much
more than that of broad-leaved logs.
To break down the imported broad-leaved logs, the import value of tropical logs wasapproximately 8.71 million m3 at a value of 2.8 billion USD, a yearly decrease of 12%
and 32% respectively. It occupied about 20% of the total import value of logs. Its
average unit price registered 327 dollars per m3, a significant fall of 23%
year-on-year.
(1) Major logs importing countries
New Zealand remains the country where China imports the largest value of logs,
about 10.85 million m3, but a yearly decrease of 8% was witnessed in 2015. Russia
ranks the second at about 10.42 million m3, a decrease of 8% as well. As to theimport value, yearly comparison and proportion in other countries, please refer toTable 1-5 and Figure 1-5.
Table 1-5: Top 10 logs importing countries of China
Import value of logs (10,000 m3)
OrderCountry
2015

Yearlycomparison(%)
8

Proportion（%）

Unit price of logs (USD/ m3)

2015

Yearlycomparison(%)

1

New Zealand

1085

-8

25

113

-21

2

Russia

1042

-8

24

121

-11

3

US

399

-35

9

203

-9

4

PNG

301

-9

7

213

-12

5

Australia

283

20

6

102

-23

6

Canada

235

-23

5.3

158

-19

7

Solomon Islands

213

-3

4.8

202

-6

8

Ukraine

97

-41

2.0

129

-6

9

France

66

-9

1.50

204

-3

10

Equatorial Guinea

64

29

1.45

275

-23

Total of top 10

3786

-12

86

144

-15

Total

4422

-14

100

182

-21

Others
14.4%
New Zealand
24.5%

Equatorial Guinea
1.4%
FranceUkraine 1.5%
2.2%
Solomon
4.8%
Canada5.3%

Australia
6.4%

Rossia
23.6%
PNG
6.8%

US
9.0%

Figure 1-5: Proportion of major log importing countries
Table 1-6: Top 10 countries where China imported coniferous logs
Imported value (10000 m3)
Order

1

CountryNew
Zealand

Unit price (dollars per m3)

2015

Yearlycomparison(%)

Proportion
(%)

2014

2015

Yearlycomparison (%)

1081

-8

36

144

113

-22

9

2

Russia

885

-12

30

131

115

-12

3

US

341

-38

11

200

165

-18

4

Australia

248

16

8.3

130

98

-25

5

Canada

232

-23

7.8

193

156

-19

6

Ukraine

85

-45

2.9

132

116

-12

7

Japan

43

40

1.4

137

124

-9

8

Belarus

19

33

0.6

124

110

-11

9

France

13

-58

0.42

158

122

-23

10

DPRK

12

37

0.40

119

118

-1

Total of top
10

2959

-15

98.82

152

122

-20

Total

2991

-17

100

152

122

-20

Japan
Ukraine 1.4%

France0.4%

Belarus
0.6%

DPRK
0.4%

2.8%
Canada7.8%

Others1.1%

New Zealand
36.1%
Australia
8.3%

US
11.4%

Russia29.6%

Figure 1-6: Proportion of major coniferous logs importing countries in 2015
Table 1-7: Top 10 countries where China imported broad-leaved logs
Imported value (10,000 m3)
OrderCountry

Unit import price (dollars/ m3)

Yearly2015Yearlycomparison(%)

Proportion (%)

2014

2015

comparison
(%)

10

1

PNG

301

-9

21

243

213

-12

2

Solomon

213

-3

15

215

202

-6

3

Russia

158

15

11

172

158

-8

4

Equatorial Guinea

64

29

4.5

355

275

-23

5

Cameroon

59

22

4.09

389

337

-13

6

Nigeria

58

15

4.07

689

627

-9

7

US

58

4

4.05

454

431

-5

8

France

54

26

3.8

248

224

-10

9

Mozambique

53

-14

3.7

548

552

1

10

Republic of Congo

50

-12

3.5

420

344

-18

Total of top 10

1068

2

74.71

300

271

-10

Total

1431

-7

100

413

308

-25

Others26%
PNG
21%

Republic of
Congo
3%

Solomon15%

Mozambique4%

Russia11%

France4%US4%Nigeria4%

Equatorial
Guinea4%

Cameroon
4%

Figure 1-7: Proportion of major broad-leaved importing logs countries in 2015
China mainly imports tropical logs from Papua New Guinea (35%), Solomon Islands(24%), Equatorial Guinea (7%), Cameroon (7%), Nigeria (7%) and Republic of Congo(6%). The imported value of tropical logs from top ten countries constitutes about
93% of the total (see Table 1-8 and Figure 1-8). In 2015, the unit import price oftropical logs from the majority of countries fell, such as Laos (-25%), Equatorial
Guinea (-23%), Republic of Congo (-18%), Cameroon (-13%), Liberia (-13%), Papua
New Guinea (-12%), which was directly associated with the decrease of import valueof tropical logs led by a slowing down of domestic economy.
11

Table 1- 8: Top 10 countries where China imports tropical logs
Order

3

Country3

Import value (10000 m )2015

Unit import price (dollar/ m )YearlyProportion

comparison

(%)

2014

2015

Yearlycomparison

(%)

(%)

1

PNG

301

-9

35

243

213

-12

2

Solomon Islands

213

-3

24

215

202

-6

3

Equatorial Guinea

64

29

7

355

275

-23

4

Cameroon

59

22

7

389

337

-13

5

Nigeria

58

15

7

689

627

-9

6

Republic of Congo

50

-12

6

420

344

-18

7

Laos

26

-43

3

1706

1279

-25

8

Malaysia

20

-47

2

339

334

-1

9

Liberia

13

27

1

312

271

-13

10

Surinam

8

-22

1

355

319

-10

Total top 10

859

813

-5

93

373

301

-19

Total

986

871

-12

100

423

327

-23

Malaysia
2%

Liberia Suriname
1%
1%

Others
7%

Laos
3%
PNG
35%

Republic of
Congo
6%

Nigeria7%

Cameroon
7%

Equatorial
Guinea7%

Solomon24%

Figure 1-8: Proportion of major tropical logs importing countries in 201512

(2) Monthly changes of imported logs between January and December
The import value of logs peaked in March 2015 at 4.45 million m3 when the importvalue of coniferous logs also capped at 3.04 million m3. The monthly changes ofimported values of logs were consistent with those of coniferous logs. For thebroad-leaved logs, their monthly changes did not vary much at about 1 million m3 allyear round. In April, the monthly value peaked at 1.5 million m3 (Figure 1-9).

Figure 1-9: Monthly changes of imported logs in 2015 in China
The import value of coniferous logs peaked in March at 3.04 million m3, after that time
it was on a downward trend with October at the lowest 2.1 million m3, a decrease of
31%. There were rebounds in July, September and December, mainly because ofpinus radiata, whose import value declined from 1.5 million m3 in March to 0.8 million
m3 in October, a decrease of 47% (Figure 1-10).

Figure 1-10: Monthly changes of the import value of major varieties of coniferous logs
in 2015 in China
In 2015, the import value of broad-leaved logs remained at a monthly level of 1 million
m3. The yearly minimum came in February at 0.71 million m3, because of traditional
13

Chinese New Year. Then in April, the value peaked at 1.5 million m3, after that, it kept
declining until October at 0.86 million m3, a decrease of 43%. But July and December
saw rebounds. In general, in 2015, the import value of both coniferous andbroad-leaved logs dropped, but that of broad-leaved logs was only reduced by 7%
while that of coniferous logs went down by 17% (Figure 1-10 and 1-11).
In 2015, aucoumea klaineana, a broad-leaved variety, was imported at a large value,
shaping the trend of import value of all broad-leaved logs.

Figure 1-11: Monthly changes of the import value of major broad-leaved varieties(3) Major customs involved in logs import
In 2015, the customs involved in the import of coniferous logs included Nanjing (36%),
Qingdao (21%), Manzhouli (13%), Harbin (9%), Xiamen (7%) and Shanghai (3%).
The import value of coniferous logs through the above six customs took up 89% of thetotal. Among them, Nanjing, Qingdao and Xiamen were the three major customs
involved in the import of pinus radiata (see Table 1-9 and Figure 1-12).
Table 1-9: Major customs involved in the import of coniferous logs in 2015 in China
No

Unit price of import (USD/ m3)

Import value
Customs

Value(10000m 3)Yearlycomparison(%)

Proportion
(%)

2014

2015

Yearlycomparison(%)

1

Nanjing
Customs

1085

-3

36

167

127

-24

2

Qingdao
Customs

628

-18

21

156

125

-20

3

Manzhouli
Customs

376

-23

13

132

120

-9

14

4

HarbinCustoms

272

-4

9

118

106

-11

5

XiamenCustoms

199

-29

7

138

109

-21

6

ShanghaiCustoms

104

-44

3

152

124

-18

Other
customs

326.84

Total

2990.84

152

122

-20

11
-16.55100

OthersShanghai 11%
3%
Nanjing
36%

Xiamen7%

Harbin9%

Manchuria
13%
Qingdao
21%

Figure 1-12: Major customs involved in the import of coniferous logs in 2015
Nanjing Customs dealt with half of total imported broad-leaved logs (54%). Other
customs involved were Shanghai (9%), Harbin (9%), Huangpu (6%) and Qingdao(5%). The import value of broad-leaved logs through the above five customs occupied
82% of the total. Besides, Shandong, Fujian, Jiangsu and Shanghai were theprincipal provinces for the import of broad-leaved logs, and Inner Mongolia was theprincipal province for the import of pinus sylvestris. These broad-leaved logs weremainly imported for usage in Yangtze River Delta and Pearl River Delta areas whichenjoyed well-developed furniture and wood product industries.
Table 1-10: Major customs involved in the import of broad-leaved logs in 2015
Order

1

Customs

Nanjing

Unit import price (USD/ m3)

Import value
Value

Yearlycomparison (%)

Proportion
(%)

2014

2015

Yearlycomparison (%)

771

-3

54

269

244

-9

15

Customs
2

ShanghaiCustoms

133

-28

9

714

507

-29

3

HarbinCustoms

113

6

8

185

174

-6

4

Huangpu
Customs

80

-42

6

861

773

-10

5

Qingdao
Customs

72

27

5

237

193

-19

Other
customs

261

18

Total

1431

100

1.1.2 Import of swnwood
In 2015, China imported in total 25.66 million m3 of sawnwood, the same level withthe value last year (Figure 1-13). The import value stood at 7.4 billion USD, adecrease of 8% year-on-year. In details, the import of coniferous sawnwood was
13.83 million m3, taking up about 54% of the total and a decrease of 5% year-on-year.
The import of broad-leaved sawnwood was 11.83 million m3, accounting for 46% of
the total and an uptake of 6% year-on-year.
Among the broad-leaved sawnwood, China imported 4.72 million m3 of sawn tropicaltimber, occupying 18% of the total and an increase of 14% year-on-year. The importvalue came at 2.1 billion dollars, a decrease of 6%. As to the unit price of imported
sawnwood, it was 436 dollars / m3, a decrease of 18% year-on-year.

Figure 1-13: Import volue of sawnwood in China from 2005 to 201516

China mainly imported sawn coniferous timber from Russia (52%) and Canada (30%),
making up 82% of the total. Between the two countries, the import value from Russia(7.19 million m3) exceeded that from Canada (4.21 million m3). For the information
about the top ten countries where China imports its sawn coniferous timber and their
proportion, please refer to Figure 1-14.
US
1%Germany1%
New Zealand3%

Latvia1%
Australia
1%

Others1%

Sweden3%
Finland
4%
Chile
5%

Russia51%

Canada29%

Figure 1-14: Proportion of imported coniferous sawnwood from major countries in2015
In 2015, the monthly peak of the import value of sawnwood was in April at 2.63 million
m3. Meanwhile, for coniferous sawnwood, the peak mont was May at 1.47 million m3.
The monthly changes of the import value of sawnwood were consistent with those of
coniferous sawnwood. By contrast, in 2015, the import value of broad-leaved
sawnwood did not vary much every month, although in general, there was increases
year-on-year. Throughout the year, the monthly value maintained the level of about 1
million m3 with the peak at 1.2 million m3 in April (Figure 1-15).

Figure 1-15: Monthly changes of the import value of sawnwood in 201517

In 2015, the prices of imported coniferous sawnwood witnessed year-on-year decline.
In January, the peak price came at 221 dollars/m3. In October, the price declined to
the lowest at 181 dollars/m3 (Figure 1-16).

Figure 1-16: Monthly changes of the import prices of coniferous sawnwood in 2015
In 2015, the average price of broad-leaved sawnwood dropped by 12% year-on-year.
In January, the peak price was 443 dollars/m3 while the lowest came in October at
374 dollars/m3 (Figure 1-17).

Figure 1-17: Monthly changes of the import prices of broad-leaved sawnwood in 2015
China imported its broad-leaved sawnwood mainly from Thailand (25%), the U.S.
(22%), Russia (17%) and Canada (9%) (Figure 1-18).

18

Vietnam
2%
Romania2%

Others13%
Thailand25%

Malaysia
2%
Indonesia
2%
Philippines
3%
Gabon
3%
US
22%

Canada9%
Russia17%

Figure 1-18: Proportion of imported broad-leaved sawnwood from major countries in
2015
The import of broad-leaved sawnwood went through the customs of Guangzhou(22%), Shanghai (18%), Shenzhen (16%), Manzhouli (7%), Harbin (7%), Qingdao(6.6%), Nanjing (4.9%), Tianjin (3.4%), Jiangmen (2.8%) and Ningbo (2.6%). The
import value through the above ten customs took up about 90% of the total importvalue.
1.1.3 Import of wood-based panel(1) Import of plywood
In 2015, the total import of various kinds of plywood reached 730,000 m3 worth 220
million dollars, which increased by 308% and 70% year-on-year. The plywood was
mainly imported from Canada and Russia with import value and import value
accounting for 63% and 44% of the total. Import value and import value from Canada
registered at 300,000 m3 and 40.97 million dollars and those from Russia at 180,000
m3 and 44.22 million dollars.
In recent years, the booming plywood industry in China could meet domestic demand.
However, the inelastic demand for high-quality plywood still exists.
(2) Import of particleboard
In 2015, the total import of particleboard reached 620,000 m3 worth 140 million dollars,
which increased by 8% and slight decreased by 2% year-on-year respectively. The
major importers were Malaysia (180,000 m3), Thailand (140,000 m3) and Romania(130,000 m3). Import value and value from the three countries accounted for 72% and
64% of the total. With a booming real estate market in China, demand for wooden
furniture made by particleboard has increased.
19

(3) Import of fiberboard
In 2015, the total import of fiberboard reached 290,000 t worth 110 million dollars,
which decreased by 2% and 3% respectively. The fiberboard were mainly imported
from New Zealand (31,900 t), Australia (26,500 t), Germany (22,900 t), Thailand(18,000 t) and Belgium. The import value and value from the five countries accounted
for 73% and 70% of the total respectively.
1.1.4 Import of wood pulp and waste paper(1) Import of wood pulp
In 2015, China imported wood pulp of 19.78 million t worth 12.7 billion dollars, which
increased by 10% and 5% respectively. The pulp was mainly imported from the U.S.
(30%), Canada (13%) and Brazil (8%) (Figure 1-19).

Others
18%
US
30%

Italy
2%
Netherlands
3%
Russia3%
Chile
4%
Indonesia
5%
Japan
7%

Canada13%
Britain7%

Brazil8%

Figure 1-19: China’s major importing countries of wood pulp in 2015(2) Import of waste paper
In 2015, various kinds of imported waste paper reached 28.93 million t worth 5.2
billion dollars, increased by 5% and decreased by 3% year-on-year respectively.
1.1.5 Import of paper, paperboard and paper products
In 2015, the total import of paper, paperboard and paper products reached 2.97
million t worth 4 billion dollars, which increased by 1% and decreased by 7%
year-on-year respectively.

20

Paper and paperboard were mainly imported from the U.S. (0.72 million t), Sweden(0.37million t), Chinese Taipei (0.24 million t), Indonesia (0.21 million t), Japan (0.2
million t) and ROK (0.2 million t). Import value from the six countries and regions
accounted for 65% of the total.
1.1.6 Import of wood chip
In 2015, China imported wood chip of 9.61 million t worth 1.3 billion dollars, which
increased by 8% and 13% respectively. They were mainly imported from Vietnam(43%), Australia (27%), Thailand (13%), Indonesia (10%) and Chile (4%), altogether
accounting for 97% of the total.
1.1.7 Import of wooden furniture
Better living standard and the depreciation of the US dollar boosted the import ofwooden furniture in China. In 2015, a total of 10.03 million pieces of wooden furniture
were imported, an increase of 2%. Their imported value of 870 million dollars has
decreased by 2% year on year. The furniture were mainly imported from Poland (2.18
million pieces), Vietnam (1.9 million pieces), Thailand (1.02 million pieces) and Italy(0.83 million pieces), altogether accounting from 60% of the total.
1.2 Overview of Export of Timber Products in 2015
1.2.1 Export of wooden furniture
In 2015, 320 million pieces of wooden furniture were exported, worth 22.5 billion
dollars, a year-on-year increase of 2%. They were mainly exported to countries andregions including the U.S. (48%), the U.K. (9%), Germany (7%) and Australia (6%)(Figure 1-20).
Canada4%
France4%

Netherlands
4%

Korea
4%

Hong Kong of
China
5%
US
48%

Australia
6%

Germany
7%
Japan
9%
UK
9%

Figure 1-20: Major exporting countries of Chinese furniture in 201521

Customs involved were in Shenzhen (26%), Shanghai (19%), Fuzhou (9%), Ningbo(9%), Qingdao (8%) and Xiamen (7%) (Figure 1-21).

Ji'nan3%

Tianjin3%

Others8%

Shenzhen26%

Dalian4%
Guangzhou
4%
Xiamen7%

Qingdao
8%

Shanghai
19%
Ningbo9%

Fuzhou9%

Figure 1-21: Major ports for exported Chinese furniture in 2015
1.2.2 Export of paper, paperboard and paper products
In 2015, exported paper, paperboard and paper products registered at 9.22 million t,a year-on-year decrease of 4%. Their exported value stood at 18.7 billion dollars, a
year-on-year increase of 5%. They were mainly exported to the U.S. (12%), Hong
Kong (7%) and Japan (7%) (Figure 1-22).

US
12%
Hong Kong of
China
7%

Japan
7%

Australia
4%

Others51%

Vietnam
4%

Taiwan of China
3%

Iran
3%

Malaysia
3%
India
3%
Korea
3%

Figure 1-22: Major exporting countries and regions of Chinese paper, paperboard andpaper products in 201522

1.2.3 Export of plywood
In 2015, China exported plywood of 10.7 million m3 worth 5.5 billion dollars, which
decreased by 8% and 5% respectively. They were exported to many countries,
including the U.S. (17%), the United Arab Emirates (7%), the U.K. (7%), Japan (6%),
ROK (6%), the Philippines (6%) and Saudi Arabia (7%). Export value of the top 10
countries accounted for 40% of the total (Figure 1-23). Plywood exported todeveloped countries in the European Union was used as wood veneer so their priceper unit was higher. In previous years, the unit price of plywood exported to third
world countries like United Arab Emirates, the Philippines and Saudi Arabia wasrelatively lower. But in 2015, the unit price of plywood exported to the three countries
increased by 18%, 4% and 7% year on year. The unit price of plywood exported to
the U.S., Japan and ROK, however, decreased to various extents (Table 1-11 andFigure 1-23).
Table 1-11: Major exporting countries and regions and unit price of Chinese plywood
in 2015
Export Value (10,000 m3 )Country

Unit Price (dollar/m3)

2014

2015

Yearlycomparison(%)

Share oftotal (%)

2014

2015

Yearly comparison
(%)

US

168

182

9

17

764

749

-2

United ArabEmirates

70

73

5

7

367

432

18

UK

72

70

-2

7

489

498

2

Japan

83

67

-19

6

498

464

-7

Korea

71

66

-7

6

390

382

-2

Philippines

68

61

-11

6

429

445

4

Saudi Arabia

60

49

-18

5

309

332

7

ChineseTaipei

33

29

-10

3

379

368

-3

Vietnam

27

28

4

3

434

432

0

Israel

27

27

2

3

446

425

-5

Sub-total forthe top 10

677

653

-4

61

504

516

2

Total

1168

1070

-8

100

498

510

2

23

US
17%
United ArabEmirates
7%

Others39%

Britain6%
Israel
2%

Japan
6%

Vietnam
3%

Korea
6%

Taiwan of China
3%

Saudi Arabia
5%

Philippines
6%

Figure 1-23: Value share of major exporting countries of Chinese plywood in 2015
Due to uneven production of plywood in China in terms of places, export value fromdifferent customs and their value increase vary greatly. Export of plywood
concentrates in Nanjing (40%) and Qingdao (35%) customs, accounting for 75% of
the total. Unit price of exported plywood from Tianjin customs increased dramaticallyby 65% and that from Shanghai increased by 6% (see Table 1-12). Unit price of mostother customs all fell to some extent.
Table 1-12: Major customs and unit price of exported plywood in China in 2015
Unit price (dollar/m3)

Export value
Customs

YearlyShare of thecomparison

total (%)

429

-11

400

379

Nanning58

Shanghai

2014

2015

Nanjing482

QingdaoYearly

2014

2015

40

388

397

2

-5

35

422

417

-1

56

-2

5

342

337

-1

59

51

-13

5

1227

1298

6

Dalian

41

37

-10

3

1595

1593

0

Shenzhen

16

18

8

2

528

513

-3

Jinan

11

16

47

2

392

377

-4

Jiangmen

17

15

-11

1

420

416

-1

Tianjin

24

12

-48

1

388

640

65

Zhanjiang

9

10

14

1

361

356

-1

1115

1023

-8

96

488

494

1

1168

1070

-8

100

498

510

2

Sub-totalof top 10
Total

1.2.4 Export of fiberboard

24comparison (%In 2015, China exported fiberboard of 3.41 million m3 worth 1.4 billion dollars, which
decreased by 12% and 13% respectively. Fiberboard is the base material for laminate
flooring. Its export was seriously affected by the toxic floor incident in the U.S. On
March 1st 2015, 60 Minute of CBS reported that laminate floor produced by the largest
floor company of the U.S., Lumber Liquidators, in Changzhou, Jiangsu province,
released formaldehyde 6 to 7 times higher than the standard of California. See from
Figure 1-24, export of fiberboard in March fell to the lowest of 160,000 m3.

Figure 1-24: Monthly export of fiberboard in China
Fiberboard were mainly exported to countries like the U.S. (17%), Iran (10%) and
Saudi Arabia (9%) (Figure 1-25). Affected by the toxic floor incident, export tocountries with stricter standard for formaldehyde release like the U.S., Canada andRussia decreased dramatically by 19%, 34% and 68% respectively. Export tounderdeveloped countries like Vietnam, Nigeria and Iran, however, increased to alarge extent by 69%, 57% and 40% respectively.

US
17%
Others
34%
Iran
10%

Australia
2%
Egypt
3%
Vietnam4%
United ArabEmirates
4%

Saudi Arabia
9%

Canada6%

Russia5%

Nigeria
6%

Figure 1-25: Major exporting countries of fiberboard in China in 201525

Customs exporting large value of fiberboard in China were Shanghai and Nanjing
customs, accounting for 41% and 31% of the total respectively. The two together
accounted for 72% of the total.
1.2.5 Export of particleboard
In 2015, China exported particleboard of 3.41 million m3 worth 1.4 billion dollars,
which decreased by 12% and 13% respectively. They were mainly exported tocountries like Mongolia (20%) and India (11%) (Figure 1-26). Export value only
increased in India and the U.S. by 75% and 30%. Export value to other countries all
fell markedly. Export to Russia, Chinese Taipei, Malaysia, Egypt and ROK decreased
by 86%, 64%, 39%, 21% and 15% respectively. The export unit price to Russia,
Chinese Taipei and Egypt increased by 80%, 38% and 38%, which led to falling
export value.

Mongolia
20%

others
36%

India
11%

Taiwan of
China
6%

Malaysia
2%

U.S.A
3%
Russia3%

Saudi Arabia
4%

Egypt
5%

Korea
5%
United ArabEmirates
5%

Figure 1-26: Major exporting countries of particleboard from China in 2015
Major customs for particleboard export were Qingdao, Hohhot and Nanjing, handling
36%, 20% and 16% of the total export.
1.3 Features of Timber Products Trade in China in 2015
1.3.1 Trade value of forest products and its share in the overall national trade ingoods decreased and trade surplus increased year-on-year
In 2015, the total import and export value of forest products stood at 123 billion dollars,
falling 10% year-on-year to the level of 2011. Its share in the overall national trade ingoods was 3.11%, which decreased by 0.15 percentage points compared with 2014.

26

Their export registered at 64.8 billion dollars, falling 6% year-on-year. Its share in theoverall national export trade in goods was 2.85%, which decreased by 0.23
percentage points compared with 2014.
Their import registered at 58.2 billion dollars, falling 15% year-on-year. Its share in theoverall national import trade in goods was 3.85%, which decreased by 0.39
percentage points compared with 2014.
Their import fell greater than the export. Marked decrease of import value was the
major reason for falling forest products trade value.
The trade surplus reached 6.6 billion dollars, increasing by 50%. The trade surplus of2014 was 4.4 billion dollars.
1.3.2 Trade of WFP still played a dominant role but its value fell for the first time
In 2015, the total import and export value of WFP stood at 93.9 billion dollars, falling
for the first time by 11% since 2009. Its share in the total trade value still played adominant role at 76%. Its import stood at 39.4 billion dollars, falling by 17%
year-on-year and accounting for 68% of the total import. Imported WFP were mainly
wood pulp, log, sawnwood, waste paper, paper, paperboard and paper products.
Export value was 54.5 billion dollars, falling by 7% year-on-year and accounting for
84% of the total export. Exported WFP were mainly wooden furniture, paper,
paperboard, paper products, plywood, wood products and fiberboard.
Import value fell because import value of log decreased by 31% and that ofsawnwood, paper, paperboard and paper products and waste paper decreased by
8%, 7% and 3% respectively. Export of fiberboard and plywood fell by 14% and 5%,which directly led to the reduced export of WFP.
1.3.3 Import value of main WFP fell but that of pulp and wood chip went up
Import value of log, sawnwood, paper, paperboard and paper products and waste
paper fell by 31%, 8%, 7% and 3% respectively year-on-year. The import of pulp andwood chip, however, went up by 5% and 13%.
1.3.4 Import value of log declined sharply
Import of pulp, waste paper, paper, paper board and paper products rose by 10%, 5%
and 1%, while import of log declined sharply by 14%.
1.3.5 Average importing price for major WFP all decreased with that of log
decreased most significantly

27

The average importing price for pulp, log, sawnwood, paper, paper board and paper
products went down by 5%, 21%, 9%, 7% and 7% with that of log dropping the mostby 21%.
New Zealand was still the largest exporter of log to China. In 2015, New Zealand(10.85 million m3) overtook Russia (10.42 million m3) to become the largest supplierof log to China. However, China’s import of log from New Zealand and Russia bothfell by 8% year-on-year. Despite decreased log import from most suppliers, China’s
log import from Australia increased markedly by 20% year-on-year.
Import of log from Ukraine, the U.S. and Canada fell by 41%, 35% and 23%
respectively.
1.3.6 Some exported forest products experienced lower value but higher unit
price
Among all exported forest products, the export value of plywood, paper, paper board
and paper products fell by 8% and 4% year-on-year. However, the average unit pricefor the two rose by 2% and 9%. Both experienced lower export value but higher unit
price.
1.3.7 ASEAN is still an emerging market for China
2015 witnessed sound trade of forest products between China and the ASEAN
emerging market, with average increase of 10%. Demand from South Africa grew themost by 83%. Export value to Mexico set a record high. For details, see Table 1-13.
Table 1-13: Forest products trade between China and emerging markets
Import value

Yearlycomparison

Exportvalue

Yearlycomparison

Import andexportvalue

Yearlycomparison

10 million $（%）

10
million$（%）

10 million $

（%）

India

1.05

-35

11.22

21

12.27

13

South
Africa

6.36

17

6.33

83

12.69

43

Mexico

41.13

16

16.18

15

57.32

16

Russia

24.78

21

4.25

17

29.03

20

Brazil

1.35

20

5.84

23

7.19

23

Country

1.4 Main Problems

28

The year of 2015 witnessed declining trade of timber products. The main problems forthe decline are:(1) Overstock of log. Lackluster real estate market, marked increase of anti-dumping
duty rate of solid wood composite floor imposed by the U.S. and standard offormaldehyde release for wooden furniture and laminate flooring led to substantial
reduction of timber products export and production. Overcapacity of many industries
and fierce competition led to the production and consumption of timber products,
which created the overstock of logs.
(2) Large stock of sawnwood. Low consumption of sawnwood affected its import thisyear.
(3) Serious trade friction. Wooden furniture and flooring companies in China wererepeatedly investigated for anti-dumping and anti-subsidy in the US and Europe. The
investigation was frequent particularly in the US.
(4) Export orders and capacity of labor-intensive industry in China were relocated tosurrounding countries because of rising cost of raw materials and labor. The risingcost of labor and land crippled the export competitiveness of wood products industry.
The coastal area witnessed increasing labor cost for years. In 2015, the cost rose
again by 10% to 15%. Now the cost was two to three times higher than neighboring
countries like Vietnam, India and Cambodia.
(5) Export price of paneling varied greatly. For example, its unit price in provinces withlarge value of plywood export was only 300 to 500 USD, like Shandong, Jiangsu,
Guangdong and Guangxi. It had increased by only 10% in the past five years.
However, the unit price in provinces with small value of plywood export was on
average over 1000 USD, like Liaoning, Jilin, Zhejiang and Shanghai.
1.5 Preliminary Analysis for Timber Products Trade in China for 2016
In 2016, timber processing industry and timber product trade will face complicatedprospect domestically and internationally with both opportunities and challenges.
They will be seen in the following aspects:(1) Countries will face uneven economic recovery, and internal momentum will beinsufficient. Demand from the U.S. and Europe will still be weak. With European debt
crisis still ongoing, trade protectionism will worsen international trade environment.
(2) Rising cost of raw materials, weak export price, fluctuation of RMB exchange rateand increasing labor cost will be the many unstable factors that forest products export
will face in 2016. The year 2016 may witness lower export increase.

29

(3) Timber import will be falling and overstock still serious. The year 2015 witnessed adramatic drop in timber import. Domestic economy is growing at a medium rate.
Overstock of wood will continue.
(4) The conflict between supply and demand of timber will be further deteriorated byprohibition of commercial logging of natural forests. From April 1 2015, Heilongjiang
province and Jilin Forest Industry Group will kick off complete prohibition againstcommercial logging. Affected by the prohibition in Northeast China, conflict between
supply and demand will be exacerbated and timber import will be fluctuated.
(5) China will still face challenges of anti-dumping and anti-subsidy investigation by
developed countries and trade rules about timber legitimacy. Developed countries willcontinue to crack down on China’s forest products trade through anti-dumping andanti-subsidy investigation. Trade rules of the EU, the U.S. and Australia about timber
legitimacy will continue to influence timber trade of China.
(6) China has huge consumption demand for mid-end and high-end forest products,
especially for mid-end and high-end furniture and particleboard. Large number ofcommercial housing waiting for owners to live in and depreciation of Euro willcontinue to boost import. Moreover, more use of particleboard for furniture andcompulsory standard for formaldehyde release of furniture set by the U.S. will boost
the import of high-quality particleboard.
(7) Export of paneling faces various difficulties. Domestic furniture companies needever increasing use of paneling, which leads to falling paneling export. Due torestrictions on formaldehyde release standard set by the U.S., export of medium
density fiberboard and laminate wood flooring has decreased. Anti-dumping rate of
13.74% in the U.S. will affect and narrow the export of plywood and solid woodcomposite floor.
(8) The increase of wooden furniture export has fallen. Due to the economic
slowdown of the EU and many emerging markets, demand for wooden furniture has
decreased. Compounded by the depreciation of Euro and other currencies, the export
value and value of wooden furniture in China face a much slower increase. However,rising demand from traditional furniture importing countries and the prosperous Asianmarket are important driving force for wooden furniture export in China.
Forest products trade in China is merging into the international market. In this process,domestic timber processing companies must be ready to embrace and handle
possible difficulties. They must also speed up its upgrading, improve its productquality, expand domestic and foreign market, and actively deal with complicateddomestic and global economic environment.

30

1.6 Basic Information on International Timber Trade of China in 2016 (soon)
1.7 Comparison of Timber Products Trade in China for 11 Years in 2005-2015
The following 24 figures show the year-to-year comparison of import and export
volume and value of timber products in China for 11 years in 2005-2015.
1.7.1 Overview

Figure 1-27: Forest Product Imports: Timber products vs. pulp and paper products(2005-2015)31

Figure 1-28: Forest Product Exports: Timber products vs. pulp and paper products(2005-2015)32

Figure 1-29: Timber Product Imports vs Exports (2005-2015)33

Figure 1-30: Timber Product Imports by Top 4 Products (2005-2015)34

Figure 1-31: Timber Product Imports from the EU by Product (2005-2015)35

Figure 1-32: Timber Product Exports by Top Products (2005-2015)36

1.7.2 Logs imports

Figure 1-33: Hardwood vs. Softwood Log Imports (2005-2015)37

Figure 1-34: Hardwood Log Imports by Region (2005-2015)38

Figure 1-35: Hardwood Log Imports: Top 15 source countries and EU (2005-2015)

39

Figure 1-36: Hardwood Log Imports from Oceania: Top 4 Source Countries

40Figure 1-37: Hardwood Log Imports from Africa by Source Country (2005-2015)41

1.7.3 Logs vs. sawnwood imports

Figure 1-38: Hardwood Logs vs. Hardwood Sawn Wood Imports (2005-2015)42

1.7.4 Sawnwood imports

Figure 1-39: Hardwood vs. Softwood Sawn Wood Imports (2005-2015)43

Figure 1-40: Hardwood Sawn Wood Imports by Source Region (2005-2015)44

Figure 1-41: Hardwood Sawn Wood Imports: Top 10 source countries (2005-2015)45

1.7.5 Plywood imports

Figure 1-42: Plywood Imports by Source Country (2005-2015)46

1.7.6 Veneer imports

Figure 1-43: Veneer Imports by Source Country (2005-2015)47

1.7.7 Wood chip imports

Figure 1-44: Wood Chip Imports: Top 10 source countries (2005-2015)

48

1.7.8 Furniture imports

Figure 1-45: Furniture Imports by Country (and EU and Balkans) (2005-2015)49

Figure 1-46: Furniture Imports: Top 10 source countries (2005-2015)50

1.7.9 Plywood exports

Figure 1-47: Plywood Exports: Top 15 destination countries (2005-2015)51

1.7.10 Furniture exports

Figure 1-48: Furniture Exports by Country (and EU) (2005-2015)52

1.7.11 Other timber products exported to EU

Figure 1-49: Other Timber products exported to EU: Top 10 destination countries531.7.12 Pulp and paper exports

Figure 1-50: Paper and Paperboard Exports: Top 15 destination countries(2005-2015)54

2. Status of Timber Industries in China

55

2. Status of Timber Industries in China
As the global largest timber industry country, China has the highest timber industry
output, raw material import as well as processed product export among all countries of
the world. The main timber industrial products of China include log, sawn timber, woodbased panel, wood flooring, wooden doors, furniture and so on. Timber industry plays
an important role in Chinese national economy thanks to its superiorities of low
consumption of energy, lesser pollution, resources renewability and its distinguishedproduct properties.
2.1 Current Status of Timber Industries in China by Geographic Region
2.1.1 Overview of timber industry in China
2.1.1.1 General situation
The output value of timber industry of China in 2015 is about 2.14 trillion yuan
including 690 billion yuan of wood furniture, 600 billion yuan of wood based panel, 290
billion yuan of logs (including the domestic and imported), 250 billion yuan of sawn
timber (including domestic and imported), 120 billion yuan of wooden doors, 90 billion
yuan of wood floor and 100 billion yuan for other timber industrial products (decorative
paper, wood staircase, wood structures, wood windows, wood toys, wood picture
frames, preservative treated timber etc)
The timber industry enterprises are widely distributed in the provinces (autonomous
regions) of Guangdong, Zhejiang, Jiangsu, Shandong, Hebei, Guangxi, Sichuan,
Anhui, Fujian, Henan and other. The main listed companies include Daya Technology
Co., Ltd, Guangdong Yihua Timber Co., Ltd, Dehua Tubaobao New Decorative
Materials Co., Ltd, Natural Flooring (China) Co., Ltd., Dalian Kemian Wood Co., Ltd. ,China Jilin Forest Industry Group Co., Ltd., Hebei Aimeisen Woodworking Co.,
Carpenter Tan Handicraft Co., Ltd., Guangdong Weihua Co., Ltd, Guangxi Fenglin
Forest Group Co., Ltd., Sichuan Shengda Forest Industrial Co., Ltd., Suofeiya Home
Furnishing Co. Ltd, Meike International Furniture Co., Ltd., Der International Home
Furnishing Co. Ltd., Zhejiang Dilong New Material Co., Ltd., Shandong Qifeng Special
Paper Co., Ltd., Fujian Yongan Forestry (Group) Co., Ltd and so on.
The main timber producers of China include Guangxi, Guangdong, Fujian, Shandong,
Anhui, Hunan and Yunnan; the main producers of wood-based panels are Shandong,
Jiangsu, Guangxi, Anhui, Guangdong, Henan, Hebei, Sichuan and so on. The major
furniture producers are Zhejiang, Guangdong, Fujian, Henan, Shandong, Liaoning,
Shanghai, Sichuan, Jiangsu, Jiangxi etc. The main producers of wood flooring are
Jiangsu, Zhejiang, Guangdong, Sichuan, Liaoning, Jilin, Shandong, Shanghai etc.
The major producers of wooden doors are Zhejiang, Jiangsu, Guangdong, Sichuan,
Liaoning, Jilin, Shandong, Beijing and so on.
According to both output and output value, the main production areas of the timberindustry of China can be divided into four scales namely the very large, the large, the56

medium-sized and the small. The very large production area covers Guangdong,
Zhejiang, Shandong and Jiangsu; The large scale covers Guangxi, Anhui, Fujian
Henan, Hebei, Sichuan, Hubei, Liaoning; The medium-sized scale covers Jilin,
Heilongjiang, Shanghai, Jiangxi, Hunan, Chongqing, Yunnan, Shaanxi; The small
scale covers Beijing, Tianjin, Shanxi, Inner Mongolia, Hainan, Guizhou, Tibet, Gansu ,Qinghai, Ningxia and Xinjiang. Refer to Figure 2-1.

Figure 2-1: Timber industry by scale in China
2.1.1.2 Introduction of the key timber industrial regions
The timber industry enterprises of China are widely distributed in the provinces(autonomous regions) of Guangdong, Zhejiang, Jiangsu, Shandong, Guangxi, Hebei,
Sichuan, Anhui, Fujian, Henan etc, as detailed below.
(1) Guangdong Province
Guangdong is the major timber industry province of China in the production andconsumption of furniture, customized closets, wood flooring and wooden doors. It isalso one of the major timber producers of China.

57

Refer to the Part 2.2 of this report for specialized introduction of the timber industry
development in Guangdong Province.
(2) Zhejiang Province
Zhejiang Province is one important producer and major consumer market of China inwood based panel, wood flooring, bamboo flooring, wooden doors, and wood furniture(including the redwood). Zhejiang has the advantageous industries of plywood,decorative veneered plywood, impregnated paper, veneer wood based panel, blockboard, solid wood finger joint board, solid wood compound flooring, laminated woodflooring, bamboo flooring, bamboo plywood formwork, bamboo mat, wooden doors,
wood products, wood furniture etc. So far there have formed a number of timberindustrial agglomerations including the Huzhou Nanxun "China wood flooring capital"
with the solid wood flooring production and sales accounting for about 60% of thecountry; The Huzhou Anji "bamboo flooring Chinese capital " with the bamboo flooringproduction accounting for about 60% of the country; The Qingyuan "daily bamboo
products cluster". The Jiaxing (Jiashan) once the main production area of the Chinese
plywood has now become the main producing areas of compound flooring during “12thFive-year Plan” period (2011-2015) following the rapid industrial restructuring
development. Jiangshan city of Quzhou is now the main producing area of wooden
doors, blockboards, Chinese fir finger-joint board (assembled board) of the countryand Hangzhou, Yuhuan, Dongyang, etc. are centres of office furniture, household
furniture and redwood furniture production. The forestry output value of the province in2015 reached 295 billion yuan, 40% of which are from the timber and bamboo
processing industry. Industrial enterprises with output value of more than ten billion
yuan include the Nanxun wood floor, Jiashan wood processing, Dongyang redwood
furniture, Hangzhou office furniture, Jiangshan wooden doors and joinery
woodworking, Deqing woodworking timber industrial clusters.
(3) Shandong Province
Shandong is a major province of wood processing of China with the output value over
200 billion yuan. In 2015, the provincial wood-based panel production was 70.68
million cubic meters accounting for 24.6% of national total output ranking in the firstplace in the country. Of the above total output, 48,397,700 cubic meters is for plywood
accounting for 29.25 percent of the national total. There has formed industry clusters
at the cities of Linyi, Heze, Liaocheng mainly of wood-based panel while cities of
Qingdao, Zibo, Weifang mainly of furniture. Qingdao as one of Chinese major
production base of woodworking machinery has more than 250 enterprises engaging
in woodworking machinery production, marketing, research and related businesses,
so was awarded the "China Woodworking Machinery City" by China Forestry
Machinery Association.
(4) Jiangsu Province
According to incomplete statistics, there is now 323,000 hectares of forest in thenorthern part of Jiangsu of with the poplar stocking volume reaches 17 million cubic
meters. There have been growing poplar forestation and the large poplar acreage
promoted the development of the timber processing industry forming many woodprocessing clusters. For example, the plywood industry cluster with the cites of Pizhou,
58

Xuzhou has more than 2100 plate board deep processing production lines and theannual plywood export reached 5 million cubic meters; The plate board industrial beltwith the cites of Suqian, Siyang and Shuyang included more than 3,000 board
processing mills; The floor industrial cluster of Changzhou, Danyang, Suzhou has
more than 200 processing enterprises and over 200 supporting enterprises to produce
annually floor more than 200 million square meters for export to over 100 countries
around the world and regions, and such exports accounted for more than 60% of thenational total export of wood flooring. In Jiangsu province, there has been Daya,
Power Dekor Group, Kendiya and other nationally well-known wood processing
enterprises. There have also formed in Suzhou, Nantong etc. redwood furnitureindustry clusters. In 2015, the total production of wood-based panels of Jiangsu
Province reached 46.856 million cubic meters accounting for 16.23 percent of thenational total output ranking in the second place of the country.
(5) Guangxi Zhuang Autonomous Region
Located in tropical and subtropical regions, Guangxi has very favorable climaticcondition for cultivating forest resources especially timber forest. Guangxi as one of
the most important forestry resources province of China has been one of the first pilot
national strategic reserve timber production base of China having an important role in
the national forestry. In 2015, Guangxi forestry industry output value reached 430
billion yuan ranking the fifth place in the country; the timber production reached 21.05
million cubic meters, accounting for about 29.2% of national total ranking the first in
the country; wood-based panel production reached 35,607,300 cubic meters ranking
the third in the country. There have formed plywood manufacturing base centering
around the cities of Nanning, Guigang; Fibreboard production base centering around
Nanning, Wuzhou, Hezhou; Particleboard production base centering around
Chongzuo, Hezhou; Finger-joint board production base with the centres of Liuzhou,
Baise, Hechi; and moulding plywood production base around Yulin.
(6) Hebei Province
By end 2015, the wood-based panel production of Hebei Province reached
16,704,200 cubic meters with the output value of 29.67 billion yuan one of the highest
provinces in China. Of the above production, the particleboard output was 2.9622
million cubic meters accounting for 14.59 percent of the country. There haveestablished three major wood-based panel production bases in cities of Wen'an,
Xingtai, Zhengding, and some new industrial areas are gaining development strengthin Nanhe, Xinle, Tangxian, Bazhou and so on.
2.1.2 Timber products
2.1.2.1 Logs and sawn timber
In 2015 the total commercial timber output amounted to 72,182,100 cubic meters in
China a slight decrease of 12.3% over the previous year. Due to the continuous
downsize of timber production of the key state owned forest regions in northeast China
and Inner Mongolia, the provinces (region) with higher commercial timber production
turned to concentrate in the collective forest areas of Guangxi, Guangdong, Fujian,Anhui, Shandong, Yunnan. The commercial timber production of the provinces59totalled more than three million cubic meters. Refer to Table 2-1 for the major timber
production and products from 2002 to 2015.
Table 2-1: Output of major timber and products of China (2002-2015)
Year

2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Log (tenthousand cubic
meters)4,436.1
4,758.9
5,197.3
5,560.3
6,611.8
6,976.7
8,108.3
7,068.3
8,089.6
7,449.6
8,174.9
8,438.5
7,553.46
7,218.21

Sawn timber (tenthousand cubic
meters)851.6
1,126.9
1,532.5
1,790.3
2,486.5
2,829.1
2,841.0
3,229.8
3,722.6
4,460.3
5,573.8
6,297.6
6,836.98
7,430.38

Wood-Based panels(ten thousand cubic
meters)2,930.2
4,553.4
5,446.5
6,392.9
7,428.6
8,838.6
9,410.0
11,546.7
15,360.8
20,919.3
28,604.0
25,559.9
27,371.79
28,679.52

Furniture(hundredmillion piece)
0.5
3.5
4.3
1.1
2.1
1.7
1.9
2.1
2.6
2.5
2.4
2.4
2.6
2.5

The sawn timber production in 2015 was 74,303,800 cubic meters, an increase of
8.68% over 2014. Shandong, Guangxi, Inner Mongolia, Heilongjiang, Hunan, Anhui,
Liaoning, Zhejiang have output more than three million cubic meters.
2.1.2.2 Glued laminated timber
Glued Laminated Timber (“glulam” for short) refers to the material integrated withfibre-parallel plate timbers, small square-edged timbers by gluing in the directions oflength, width or thickness. There are a variety of glulam products. It can be divided
according to use the structural glulam timber and non-structural glulam timber; By
shape it can be classified into plate glulam and cubic glulam. The typical glulam
thickness ranges from 12 mm to 18 mm, with specifications 2440 mm × 1220 mm or
specified to customer requirements. The main raw material species include larch, oak,catalpa, Pinus sylvestris var. mongolica, white pine, birch, ash, elm, poplar and so on.
Chinese fir, pine etc that contains natural insecticides are widely used in homedecoration.
Due to the exclusion of wood knots, decayed wood and other defects without changing
the structure and characteristics of the wood itself, glulam has the natural wood
texture, looks beautiful, uniform and overcomes the natural wood shortcomings ofeasy warp, deformation, cracking etc thus superior to natural wood. High quality
glulam has generally smooth surface, beautiful colour, small size error, firm bonding
and not easily deformed. Glulam achieves perfection by using small marginal raw
materials for making of excellent timber for high-end purpose, makes full use of timberresources, alleviates effectively the shortage of large-diameter timber, improves thecomprehensive utilization and value of timber thus one of the most effective ways ofwood utilization.

60

Glulam industry was initiated in the three north-eastern provinces from early 1980s.
Now there has formed in China a complete glulam industry chain from afforestation,
lumber processing to production, sales and service. Zhejiang, Hunan, Fujian, Jilin,
Heilongjiang, Guizhou etc have had a number of relatively concentrated industry
production bases. There are about 500 glulam manufacturers in China, with the actual
production capacity about three million cubic meters thus the production, technology
and market have matured.
2.1.3 Wood based panels
Wood-based panels includes four major categories namely the plywood, particleboard,
fibreboard and blockboard. However with extended uses and deep processing, there
may be hundreds of wood-based panels. The report focuses on the above four
categories.
Wood-based panel production of China ranked first in the world for many years. In theupcoming decade or even longer period of time, Chinese plywood and their products
will continue to broaden the market. More and more products will be replaced by woodbased panels that became applied in more fields. The quality will be continuously
improved and the records of output and sales will be continuously broken. In 2015, theChinese wood based panel output is about 286.8 million cubic meters an increase of
4.8% of that at the same period of time last year. Of the 286.8 million cubic meters,
about 165,460,000 cubic meters is for plywood, an increase of 10.5% and accountingfor 57.7% of the total production of wood-based panel; The fibreboard production isabout 66.16 million cubic meters, an increase of 2.4% and accounting for 23.0% of
total wood-based panel production; The particleboard production is about 20.3 million
cubic meters, a decrease of 2.7% accounting for 7.1% of total wood-based panel
production of the country. Shandong, Jiangsu, Guangxi, Anhui, Guangdong, Henanare the six top producers of wood-based panel in 2015 which have an accumulated
production about 209,280,000 m accounting for 72.91 percent of the total output ofwood-based panels of the country. China has become a major country of wood-based
panel production and export in the world. Nevertheless, China is not a strong countryof wood based panel because in the whole there is still a gap with the international
advanced level in terms of production equipment, personnel quality etc.
2.1.3.1 Output
After years of continual development, the wood-based panel production of China hasfor years ranked the first in the world. Over the past decade, Chinese plywood industry
developed rapidly. The product quality has gradually increased so that the quality of
most products has reached or approached the quality standards of the advanced
countries. This makes China the lead country of world in wood-based panel production,
consumption and import and export trade.
Table 2-2: Wood based panel output of China (2001-2015)(ten thousand cubic meters)
Year

Total output

Plywood

Fibreboard

Particleboard

2001
2002

2,111
2,430

904
1,135

970
789

342
369
61

Other boards(blockboard)
——
——

2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

4,553
5,446
6,393
7,429
8,839
9,410
11,547
15,361
20,91922,33625,56027,372
28,680

2,102
2,099
2,515
2,729
3,561
3,541
4,451
7,140
9,870
10,982
13,725
14,970
16,546

1,128
1,560
2,061
2,467
2,729
2,907
3,489
4,355
5,562
5,800
6,402
6,463
6,616

547
643
576
843
829
1,142
1,431
1,264
2,559
2,350
1,885
2,088
2,030

775（617）
1,144.49（881）
1,241
1,390（1,155）
1,718（1,322）
1,820（1,304）
2,176（1,480）
2,602（1,652）
2,928（2,034）
3,204（1,868）
3,547（2,117）
3,852（2,388）
3,488（2,161）

Figure 2-2: Wood-based panel production of China (2001-2015)
2.1.3.2 Main production bases
Chinese wood-based panel production has for many years ranked first in the world. At
present, Chinese artificial board manufacturing enterprises are mainly distributed inthree key areas: Firstly, the eastern China wood-based panel industrial cluster withthe roles of Zhejiang, Jiangsu and Shandong. Secondly, the southern China
wood-based panel industrial cluster with the roles of Guangdong, Guangxi. Thirdly,
the northern and central China wood-based panel industrial cluster with the roles ofHebei, Henan and Hunan. The regional concentration of MDF manufacturing is low.
Apart from Tibet, Qinghai and Ningxia all mainland provinces and autonomous regions
have MDF production.
There are 6 major wood-based panel production bases in China, namely the Pizhou
wood-based panel production base in Jiangsu, Suqian wood-based panel production
base in Jiangsu, Jiashan wood-based panel production base in Zhejiang, Linyi
wood-based panel production base in Shandong, the Wen’an wood-based panel
production base in Hebei and the panel production base in Guangxi.
(1) Pizhou wood-based panel production base in Jiangsu
Located at the border area of northern Jiangsu and southern Shandong, the Pizhou
wood-based panel production base has an area of 2,088 square kilometres and62population of 1.58 million. The area has developed traffic system, about 100 km to the
Lianyungang port for export, and with the Lianyungang-Lanzhou Railway,
Lianyungang-Huoerguosi Express, the Beijing-Hangzhou Grand Canal passing
through from east to west. The production base contains of more than 3,000 plywood
enterprises mostly small and medium sized and over 2,200 deep-processing
production lines have annual output of high-quality wood-based panel of 8 million
cubic meters and forestry output value over 16 billion yuan. The contribution rate
forestry industry to the city fiscal revenue and the income of farmers are over 20% and
25% respectively. There are more than 100 types of product including plywood,
fire-retardant board, waterproof formwork, container floor plywood etc, for export to 26
countries and regions of North America and Europe so an important base for
production and export of plywood of China.
(2) Suqian wood-based panel production base in Jiangsu
Suqian well known as the "hometown of Italian poplar" in China has poplar cultivation
history of more than 30 years. Now the city has poplar area of 123,000 ha withstanding volume of 10 million cubic meters. Since the late 1980s, there has been rapid
development of the local timber processing industry with poplar as raw material,
making the timber industry the local pillar industry. Currently, the city has more than
2,000 wood processing enterprises with annual design production capacity of medium
and high density fibreboard amounting to 800,000 cubic meters, ranking first in the
Jiangsu Province.
(3) Jiashan wood-based panel production base in Zhejiang
Jiashan County has more than 300 timber processing enterprises, with fixed assets of
20 billion, 35,000 employees, and plywood annual output of nearly 3 million cubic
meters. The products are exported to Europe, the Middle East, Southeast Asia, India,
Japan and South Korea, with trade value more than 100 million US dollars so an
economic bright spot in the Yangtze River Delta region.
(4) Linyi wood-based panel production base in Shandong
The production enterprises are mainly concentrated in Lanshan district, with the main
product of plywood. Linyi city has now more than 3,000 board processing enterprises
including 1,000 ones for the plywood. In addition, more than 2,000 enterprises engage
in veneering of import logs, with more than 1,000 production lines, the annual
consumption of imported logs over 200 million cubic meters producing veneer 1.8
million cubic meters so the veneer board supply base of the country. For the first half of2008, 104 export enterprises had the total export value of 195 million US dollars,accounting for one third of Chinese export of wood-based panels so an importantwood-based panels export base of China. 45 enterprises have self-managerial import& export authority of which 23 ones has export value over one million USD.
(5) Wen’an wood-based panel production base in Hebei
The processing enterprises are concentrated in the Zuogezhuang Town located at thenorth-eastern part of Wen’an County. With convenient transport condition andadvantageous location, Wen’an is now the largest plywood production base in63

northern China. Zuogezhuang Town has more than 1,200 plywood and associatedindustrial manufacturers mainly producing plywood, particle board, block board,decorative plates, building templates, MDF, flooring, compound floor etc. soldthroughout China and exported to South Korea, Japan, the United States andSoutheast Asian countries.
(6) Panel production base in Guangxi
There has been much advancement of wood-based panel industry in Guangxi inrecent years. According to incomplete statistics, Guangxi has now 22 wood-based
enterprises with industrial output value over one billion yuan, 3 enterprises withindustrial output value 5-10 hundred million yuan, and 18 enterprises with industrial
output value over 1-5 million yuan. There have initially formed in Guangxi the Nanning,
Guigang centred plywood and fibreboard industry clusters; The Rongxian centred
special-shaped plywood industry cluster; The Liuzhou centred blockboard andfinger-joint board industrial cluster. These featured industrial clusters not only
improved the timber and bamboo industrial concentration promoting the developmentof the timber and bamboo industry of Guangxi, but also improved the
popularity domestic and abroad of timber and bamboo industry of Guangxi.
2.1.3.3 Basic situation of the main wood-based panel products(1) Plywood

18000
16000
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10,000 (m )The plywood production in China is carried out mostly by small-scale enterprises.
Since adopting reform and open policies form early 1980s, there was substantial
growth in plywood production along with the surging market demand. Consequently,
the plywood production companies expanded speedily from the original state-owned
enterprises to collective enterprises, Sino-foreign joint ventures. From 1993 on,Chinese plywood production enterprises mushroomed with the output in continuous
escalation. International market demand for plywood was also rising. Following the
introduction of the fast-growth Italian poplar to northern China and eastern China ,the plywood industry in Hebei, Shandong, Jiangsu and Zhejiang developed very
rapidly. The large-scale cultivation of eucalyptus in southern China also led to therapid development of plywood production of Guangdong and Guangxi. Refer Figure
2-3 for annual output of plywood of China,

Figure 2-3: Annual output of plywood of China (2001-2015)64

(2) Fibreboard
Fibreboard is one of traditional wood-based panel products in China. Following
decades of development, Chinese fibreboard industry has evolved into a multi-product,
multi-purpose scale-oriented industrial system. Since 2001, Chinese government
adopted the preferential VAT waiving policy to the production and processing of raw
materials of "three forest residues and small/inferior fuelwood” for comprehensive
utilization. This provided the impetus for further progress of fibreboard industry,increasing the fibreboard annual output from 5.14 million cubic meters in 2000 to
66.16 million cubic meters in 2015, an average annual growth over 20%.
Chinese fibreboard is mainly of MDF accounting for about 90% of the annual output offibreboard. MDF industry in China relies on mainly small enterprises which account for
70% of the entire industry with annual sales less than 100 million yuan. The
medium-sized enterprises account for about 20% of the entire industry with annual
sales of between 100 million-300 million yuan; The large enterprises account for about
10% of the entire industry, with annual sales of more than 300 million yuan in general.
Chinese fibreboard production enterprises are mainly distributed in Shandong,
Jiangsu, Guangdong, Zhejiang, Anhui, Fujian, Jiangxi and Sichuan thus more in theeastern and less in the western part of the country.

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Figure 2-4: Fibreboard output of China (2001-2015)
Fibreboard is currently the fastest growing wood based panel product in China, withthe output ranking the first in the world. Its development trends are as the follows:
rapid growth of production capacity; production scale shift from small- medium sizes tomedium-large sizes; persistent price competition for eventual winner that has highquality product; transfer of single product situation to that of multi-products andmulti-functions.
(3) Particleboard
Since 2000, the particleboard production has increased annually, particularly in 2006
and 2008 with significant average annual increase over the previous years. In 2008
Chinse particleboard output exceeded 10 million cubic meters and in 2015 to 20.3
million cubic meters (Figure 2-5).

65

3000

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Figure 2-5: Annual particleboard output of China (2001-2015)
The particleboard industry is concentrated in eastern China, followed by the northernand northeast parts of the country. The north-western and southwestern regions havelittle particleboard production.
(4) Blockboard
According to the number of production enterprises, the top ten blockboard enterprises
were Hebei, Zhejiang, Hunan, Fujian, Guangxi, Jiangxi, Shandong, Sichuan, Liaoning
and Jilin; According to production, the top ten are Hunan, Zhejiang, Guangdong,
Hebei, Fujian, Liaoning, Guangxi, Jiangxi, Hubei and Shandong. High output
enterprises are for Liaoning Dalian Penghong Wood Co., Ltd., Hubei Eastern Wood
Co., Ltd., Hunan Fuxiang Wood Co., Ltd., Zhejiang Dehua Baby Rabbit New
Decorative Materials Co., Ltd., Hangzhou Huahai Wood Industry Co., Anhui Suzhou
Dongjian Wood Co., Ltd., Shandong Longsen Wood Co., Ltd, Zhejiang Shenghua
Yunfeng New Material Co., Ltd., Shandong Caoxian Huiyuan Wood Co. Ltd., Anhui
Suzhou Dongda Wood Co. Limited etc.

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2007

2008

2009

2010

2011

2012

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2015

Figure 2-6: Annual blockboard output of China (2006-2015)
2.1.3.4 Problems in course of the development(1) Numerous enterprises with limited average production capacity
The vast majority of wood-based panel production enterprises of China have small
scale, low equipment level and few have large scale with advanced technology and66

equipment for production. According to the survey analysis, Chinese fibreboard
production relies on too many enterprises most of which are small and medium sized.
The average annual capacity of single production line is about 50,000 cubic meters.
With small-scale production capacity the risk-resisting capability is low. 93% of theplywood enterprises has annual sales less than 50 million yuan. Only about ten
particleboard enterprises has production capacity over 200,000 cubic meters so theindustrial concentration is low. Large enterprises account for about 1% of the total
number of the blockboard enterprises, medium-sized enterprises accounted for 2%
while 97% of small businesses. The vast majority of small-scale enterprises lackadvanced production equipment so the product quality is unstable.
(2) Shortage and price escalation of raw materials started restricting theindustry development in some areas
Although the wood based panel production effectively motivated the construction of
the national fast-growing and high-yielding timber planation production base as well as
the plain forestry, the raw materials supply capacity has failed to keep up with woodbased panel development which was in rapid scale expansion and quick growth of
production capacity. In some areas, restricted by raw material supply, the output
growth has stopped or even declined. In China, with the relatively scarce raw materials
for the production of fibreboard and particleboard, especially with the further increaseof the production lines, the supply and demand contradiction of raw material will
eventually push high the prices and bringing about more intense competition in theindustry.
(3) Insufficient market demand and fierce competition lead to enterpriserevenue decline
Survey study shows that the management situation of the enterprise remains severe.
Along with the deepening regulation of real estate, the downstream industries offibreboard and plywood, ie the furniture, flooring, doors, decoration etc continue tooperate weakly with declined purchases, lack of demand, slack market so that someenterprises have ceased production, turned to other production or simply closed
especially the small and medium enterprises (the demand for particleboard in 2015 ishowever an increase so the price rose). At the same time, due to the impacts fromprices rise of raw and auxiliary materials and energy, higher costs in transportationand logistics, rapidly rising labour costs etc, the production operation costs offibreboard, plywood increased in general. The revenues declined and the enterprises
are experiencing difficulty in recruiting workers, financing and organizing production.
The comparative advantage of labour-intensive industries and downstream industries
decreased and more manufacturers are leaving the industry.
2.1.3.5 Development trends(1) Plywood
In the future 5 to 10 years, Chinese plywood will continue to focus on the products offurniture board, decoration plate, composite flooring substrate, packaging board,concrete formwork. Production ratio of laminated veneer lumber with poplar andeucalyptus as raw material shall increase. Larch based structural laminated veneer
67

lumber will enter the market. Bio-based formaldehyde-free adhesive plywood market
share will gradually expand. There is space for the southern China, north-eastern
China to add plywood production capacity. The fast-growing eucalyptus will be themain raw material to support growth the plywood production capacity.
(2) Fibreboard
Fibreboard will continue to focus on products of furniture board, laminate flooring
substrate, door plates and decoration plate. The market for low formaldehyde
fibreboard, inflammable fibreboard etc will expand. Central China, southern China andsouthwestern China has production capacity growth potential of fibreboard. The
fibreboard production capacity share of eastern China and northern China will drop.
(3) Particleboard
Particleboard will continue to have furniture board as the main product. The market
share of hollow particleboard for producing composite door will increase slightly. OSB
use for construction of wooden houses and product packaging etc will further expand.
The proportion of low formaldehyde emission plate will increase significantly.
Southern China particleboard production capacity will increase dramatically while
particleboard production capacity share for eastern China region will drop.
(4) Blockboard
Blockboard will continue to focus on products of interior decoration, furniture plate etc.
The ratio of impregnated paper veneer blockboard will increase significantly and the
proportion of low formaldehyde emission board will expand. There is growth potentialof Blockboard production capacity for areas of central China and southwest China.
The blockboard production capacity share of eastern China, northern China andsouthern China will drop.
2.1.4 Wooden floor
2.1.4.1 Basic situation
Wood flooring product is the only product made from renewable raw material and canbe recycled. It has features of being graceful, simple and natural, warm-looking andcomfortable thus on the whole good choice for decoration of homes and shops. After
20 years of continual development, China has formed a complete industrial system ofwood floor production, sale, laying and after-sale service. China has now more than
2,300 wood floor enterprises of which about 800 ones are for solid wood flooring, 900
ones for laminate flooring, 500 ones for solid wood compound floor, and 150 ones forbamboo flooring. There is only a small proportion of large and medium-sizedenterprises in the industry. The small enterprises accounted for about 90% of the total
number of enterprises of the industry. The market concentration is low and the productquality of different enterprises varies significantly. Currently only a few companies of
the wood floor industry are entitled with "China Famous Brand", including Dekor, Der,
Nature, Fillinger, Shengda, Jinqiao, Yihua and so on. These high-quality companies
distinguished in terms of brand, technology, talents have gradually formed theirintegrated production and marketing chain that extends to the upper end of the68industrial chain. Some companies have built up their own base for base material
processing and even raw material forest base to optimize the allocation of resources,
to match the international advanced level in regards of production scale, technology,
equipment, product quality, service, marketing concepts and management methods.
With fiercer competition strength, these enterprises tend to guide the entire wood floor
industry to further enhance inherent quality and market competitiveness. There has
been the trend for Chinese wood flooring industry to concentrate on advantageousbrand enterprises. In consumption structure, the consolidated composite floor
laminate flooring dominates the market with its advantageous properties of easycleaning, abrasion resistance, scratch resistance, stain resistance, impact resistance,
moisture resistance etc. which will help create a safe, sanitary, and comfortable living
environment to meet demands of the vast number of household consumers.
Consolidated composite floor has the largest share of total sales of wood flooring, hasbeen in more than 50%; followed by solid wood flooring which accounted for morethan 20%. Solid wood flooring due to the shortage of timber resources and national
forest resources conservation policies has been on a decline in the annual sales forthe past two years. Bamboo flooring sales share has been at a low level. According to
the incomplete statistics of the Flooring Committee of China Forestry Industry
Association, the total sales of wood floor of scale-production enterprises in 2015 ofChina is about 380.15 million square meters, a decrease about 2.2% over that of thesame period of the previous year. Of the 380.15 million square meters, theconsolidated composite floor is for 206 million square meters, an decrease of 3.2%;
solid wood compound floor of about 95.5 million square meters, a decrease about
1.04%; solid wood floor of about 3990 square meters, decrease of 0.99%; bamboo
flooring about 35.1 million m, decrease of 0.71%; other floor products about 3.65
million square meters, a decrease about 2.67%.
2.1.4.2 Total output and sales over the past five years
Refer to Table 2-3 for the total output of consolidated composite floor, solid wood floor,
multi-layer solid wood compound floor, three-layer solid wood compound floor,
bamboo floor of China from 2010 to 2015.
Table 2-3: Wood flooring output of China (2010-2015)(ten thousand square meters)
Wood compound floor

Consolidate
wood floor

Solid wood
floor

Multi-layer

Three-layer

2010

23,800

4,300

6,270

2,630

2,530

39,9002011

23,500

4,260

6,420

2,650

2,510

39,7002012

21,100

4,170

6,070

2,530

3,500

37,7002013

22,400

4,250

6,800

2,660

3,500

40,0002014

21,280

4,030

6,960

2,690

3,535

38,8702015

20,600

3,990

6,850

2,700

3,510

38,015Year

2.1.4.3 Number of scale-production floor enterprises

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Bamboofloor

Total output

(1) Consolidated wood floor
The enterprise with annual output above 5 million square meters include Dekor Group
Co., Nature Flooring (China) Co., Ltd., Sichuan Shengda Industrial Co., Ltd., Der
International Home Furnishing Co., Baluoke Wood (Zhongshan) Co., Ltd., Jiangsu
Kendiya Wood Co., Ltd., Jiangsu Bei’er Decoration Materials Co., Ltd.
(export-oriented), Shanghai Feilingeer Wood Industry Co., Ltd., Jiangsu Luoji Wood
Co, Ltd, Anhui Yangtze Floor Co., Ltd., Jiangsu Kailai Wood Co. Ltd., Shanghai
Aosheng Wood Co. Limited.
(2) Multi-layer compound floor
The enterprise with annual output above 1.5 million square meters include mainly
Dekor Group Co., Nature Flooring (China) Co., Ltd., Jinqiao Floor of the Jilin Forest
Industry Group Co., Ltd., Baluoke Wood (Zhongshan) Co., Ltd. Jiafeng Wood (Suzhou)
Co.Ltd., Huzhou Shiyou Shijia Wood Co.Ltd, Xinwei Weiguang (Shanghai) Wood Co.,
Ltd., Zhejiang Liangyou Wood Co., Ltd., Zhejiang Yuhua Wood Co., Ltd., Jiangsu
Senmao Bamboo Wood Co. Ltd, Shuxiang Mendi (Shanghai ) New Material
Technology Co., Ltd., Jiu-Sheng Floor Co., Ltd., Shanghai Filingeer Co., Wood Ltd.
Co Ltd, Dehua Tubaobao Decorative New Material Co. Ltd. etc.
(3) Three-layer compound floor
The enterprise with annual output above 800,000 square meters include Jinqiao Floorof the Jilin Forest Industry Group Co., Ltd., Power Dekor Group Co., Ltd., Jinlong
Wood Group Co., Ltd., Hunchun Xingjia Floor Co Ltd, Dalian Kemian Wood Industry
Co., Ltd., Jilin Xinyuan Wood Co., Ltd., Hunchun Senlinshan Wood Co., Ltd. of Jilin
Yanbian Forestry Group, Dalian Huafeng Wood Industry Co., Ltd., Shenzhen Huanwei
Wood Co. Ltd.
2.1.5 Wooden door
2.1.5.1 Overview
Wooden door as one of the earliest adopted building product, has been of thenecessities for decoration of modern homes and public venues. The past decade has
witnessed quickened urbanization and rapid development of real estate industry in
China providing huge space for development of the wooden door industry. Modern
wooden door industry has completely changed in production manner, from thetraditional mode of “handmade service by hired carpenter at home" to the modern
mode of “large-scale customized industrial production”. And the product evolved
meanwhile from the practical design to integrated design of being decorative andenvironmental friendly. China has been now the world largest production base andconsumer market of wooden doors.
With the development of the timber processing industry, construction industry andinterior decoration industry of China, the wooden door industry tends to match withinternational standards in aspects of product conception, style design, technicalprocedures etc, High-quality logs, laminated timber, plywood, fibreboard, hollow
particleboard, blockwood, decorative plywood etc became widely used in the70

production of wooden doors, which enriched the material choices of wooden doors.
With the technological innovation of processing, improvement of overall structuraldesign, enrichment of surface decoration workmanship, there have been muchdiversified products of wooden doors, such as the newly developed solid wooden
door, solid wood compound doors etc. The humanistic, green and low-carbon culture
concepts offer new meanings of wooden doors, realizing the shift from single practicaluse to utility -enjoyment integrate functional mode. The fashionable style, simple style,European style, classical style, modern style, energy-efficient style, environmental
protection style wooden doors and more, with enriched cultural connotation havebecome an integral part of home decoration meeting consumers’ diverse needs.
Chinese wooden door industry has developed very rapidly. According to statistics, thefirst decade of the 21st century has witnessed an annual average output growth rateover 25% for the domestic wooden door industry. The output value rose from 12.0
billion yuan in 2003 to 320 billion yuan in 2006, to 40 billion yuan in 2007, to 78 billion
yuan in 2010 and over 120 billion yuan in 2015.
2.1.5.2 The main production regions
The maturity of wooden door industry of China has been growing, along withsignificant improvements in enterprise management, production technology, productquality, market awareness, brand awareness and service awareness. Nevertheless,affected by the size irregularities of Chinese building doors and openings, the wooden
door production process has to go through the 5 steps of measuring, production,
installation, commissioning and after-sale service. As the result, wooden doors are in
general locally produced and on few occasions standardized production can be
conducted. Currently over 10,000 enterprises carry out preliminary industrial
production of which 3,000 ones carry out scaled, mechanized production with annual
output value of 5 million yuan, less than 2000 ones with annual output value more than
10 million yuan, 200 ones with output value more than 50 million yuan, and 70 ones
with annual output value of 100 million yuan. Wooden door production enterprises aremainly distributed in the five major production bases namely the Pearl River Delta,
Yangtze River Delta, the Bohai Rim region and north-eastern China, southwestern
China. The past small-workshop scale processing has evolved into large-scale
product-oriented, integrated, brand-oriented industrial production forming a number ofindustrial clusters, as per the following proportions:







Pearl River Delta: 33%;
Yangtze River Delta: 25%;
Bohai Rim region: 19%;
Northeast China: 10%;Southwest China: 9%
Northwest China: 4%.

(1) Pearl River Delta region
This region has centred around the two provinces of Guangdong and Fujian. A
number of manufacturers of wooden door are located at the south-eastern coastal
areas of China, many of which are strong, capital-rich large scale ones. A few of theseenterprises follows export-only strategy so not yet opening up any domestic market.
71

The wooden door industry of this region started early whose growth is due to both theescalated consumption and the use of import timber for production.
(2) Yangtze River Delta
This region has centred around Shanghai, Zhejiang and Jiangsu. Located to theeastern coast the most developed area of China, it is also the most developed area
Chinese wood processing. Thanks to the geographical advantages of intersection
inland rivers and sea, the Yangtze River Delta region has become the forefront of
opening up, helping boom the wooden door industry in the number and sizes of thefirms and the growth rate as a whole.
(3) Bohai Sea Rim
This region has centred around Beijing, Hebei, Shandong. For most parts of theregion there are large wooden door product sales. For the location of the capital andneighbouring Beijing-Tianjin area which have higher end consumers, the wooden
doors are of higher prices. With plenty of home furnishing and decoration markets, thedeveloped traffic condition, there has formed the Great Beijing-Tianjin wooden door
advantageous sales market network in which the manufacturers are stimulated to
improve product quality and expand the scope of sales, increase sales.
(4) Northeast China
This region has included Heilongjiang, Jilin and Liaoning provinces and specifically in
focal cities of Qiqihar, Shenyang, Dalian, Harbin and Changchun. The area has richforest resources and imports timber with the facilities of neighbouring Russia. A largepart of import enters the domestic distribution market through the customs of thisnorth-eastern China. The location advantage, good industrial base and timberresources promote the development of the wood processing.
(5) Southwest China
This region that has centred around Sichuan, Chongqing and Yunnan, has been thefrontier area of both the National Western Development program and further opening
up. With these advantages for development and opening up, the local wooden door
enterprises have had rapid development. However, located in the underdeveloped
western areas, the consumption is comparable to that the north-western parts ofChina, many wooden enterprises use low-priced products to seize market share.
In brief, the regional differences of the number of manufacturer of wooden doors
enterprises, their product coverage vary significantly. With the Yangtze River as thedividing line, there are more southern produced wooden doors entering the market to
the north of Yangtze while there are less northern produced wooden doors entering
the market to the south of Yangtze. There are obvious difference between the northand the south, and very obvious difference between the east and the west.
2.1.6 Furniture

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Furniture industry is a traditional labour intensive industry, a key light industry instimulating economic development, and an evergreen industry. Since the reform andopening up from 1980s on, the rapid economic development and the continuous
improvement of people's living standards, provide a broad growth space for thefurniture industry. Following a decade-long transition period, 2-dacede-long rapid
development, the situation has gradually formed for the furniture industry
characterized large-scale enterprises as leaders, and small and medium enterprises
as the mainstay. With relatively complete industrial chain, complete range of products,
developed furniture circulation, Chinese furniture industry has become an importantpart of the world furniture industry. The stable international role of Chinese furnitureindustry play roles in meeting the domestic needs, demands of international market
and in stimulating domestic general demand.
2.1.6.1 Basic situation of the furniture industry of China
There are more than 3,000 scale-production wooden furniture enterprises in China
with the output of 253.1533 million pieces of furniture in 2015 (see Figure 2-7), a
decrease of 3.91% over 2014. Of all the enterprises, 19.36% are large andmedium-sized enterprises while 80.64 percent are small enterprise. Furniture
enterprises are widely distributed in Guangdong, Zhejiang, Shandong, Fujian, Henanetc.

3
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Figure 2-7: Wood furniture production of China 2006-2015
There have formed five industrial regions in southern, eastern, northern, north-eastern
and western parts of the country.
(1) Southern China furniture industry
Guangdong Pearl River Delta is the centre of the furniture industry in southern China
with advantages in industrial clusters, supply chains and brands. Guangdong has
more than 6,000 large and small furniture companies, employing over one million
people. In particular, the customized furniture enterprises including Suofeiya,
Shangpin Zhaipei, Oupai, Haokelai has developed very rapidly.
(2) Eastern China furniture industry

73

The eastern China furniture industry with Yangtze River Delta as the centre has
product quality and management advantages. There are more than 2600 furniture
enterprises in Zhejiang Province, with more than 300,000 employees with graduallyrising reputation in China in recent years.
(3) Northern China furniture industry
This region with the Bohai Sea rim areas as the centre has advantages in enterprisescale and market demand.
(4) Northeast China furniture industry
With the local old industrial bases as the furniture industry centre, this region has
advantages in solid wood furniture production and timber resources.
(5) Western China furniture industry
Chengdu and Chongqing are the centres of the furniture industry in western China.
The region has advantages in Tier II market products facing mainly the domestic
customers.
2.1.6.2 General characteristics of the furniture industry(1) Industrial growth transition from high speed to moderate speed
Over three decades beginning from the reform and opening up, the furniture industryof China has developed very rapidly to create a world wonder. Currently, China is at
the transition of economic growth with pains of structural adjustment and burdens toactualize the earlier development policies. Consistent with the pace of national
economy, the furniture industry will shift from the high speed development tolow-speed development. Industrial restructuring of the furniture industry will continue.
To this end, the supply-side reforms the will offer new driving force for development,
has become an important target for the furniture companies to adjust theirdevelopment strategies. While some enterprises have had initial success in upgradingthemselves, some other companies got eliminated. Last year is period for the furnitureindustry to experience conflicts. The whole industry underwent a major test of thedecline in exports, slow growth of domestic sales, speeded industrial restructuring,enhanced environmental protection requirements, furthered taxation reform,
economic downward pressure, slack real estate market etc. The furniture industry isfacing both opportunities and challenges.
(2) Overall progress but imbalanced in development
The technological level of Chinese furniture industry has improved rapidly in general.
Some well-known companies have mastered the world advanced production
technology and techniques to meet the needs of the market and build up international
corporate image. However, the furniture industry development of China has been
imbalanced. Small and micro enterprises as the majority that are short of coretechnology do not carry out brand management. With low concentration, they are lesscapable in resisting risks and with low in labour productivity and profitability. Some74

small and mid-sized enterprises that had difficulties in production management findprice competition no longer an effective strategy. For reasons of environmental
non-compliance, counterfeiting, plagiarism etc, they encountered both domestic andoverseas markets challenges. For the past two years, some small and micro furniture
enterprises have closed down for production operational downturn reasons.
In contrast to small furniture enterprises, the large furniture business has tended todevelop and there has been a rise in the number of scale-production furniture
enterprises. In 2015, scale-production enterprises realized main business income of
787.25 billion yuan, an increase of 9.29% over that of the same period of the previous
year. Of the 787.25 billion yuan, 109 large companies had the average annual incomeof 1.257 billion yuan, an average increase of 25.7%; 825 medium-sized enterprises
had an average annual income of 285 million yuan, an increase of 7.28%; 4,356 small
enterprises had average annual income of 95 million yuan, an increase of 12.81%. In
general net profit of the scale-production furniture enterprises rose by 14.03% overthe previous year with the cumulative output growth of only 0.38%, indicating that thescale-production enterprises has improved both efficiency and profitability. There has
been a reduction of employment in scale-production furniture enterprises, so the laborproductivity rose by more than 5%, indicating qualitative change of economic growthof the industry and the entrance as a whole into a period to rely on labor productivity
to achieve economic growth.
(3) Fast advancement of customized furniture
Some large customized furniture manufacturing enterprises have developed rapidly inrecent years. In order to meet the needs of individual consumers, the customized
furniture enterprises grew rapidly produce. To produce customized multi-category
furniture, enterprises have introduced large-scale customized manufacturing
equipment using in particular the digital information technology to shorten production
cycle. The integration of modern technology and traditional manufacturing has been
has become a model for the furniture industrial upgrading transformation The annual
output value of these enterprises are usually over one billion yuan and sometimes
tens of billion yuan indicating the strength of the integration of information technology
and industrialization.
(4) Emerging prosperity of e-commerce
E-commerce of Chinese furniture industry is gradually on rise. Some large enterprises,
large stores started using e-commerce marketing mode to seek prior market
advantage by catching up with the gradual changes occurring in furniture consumer
attitudes and market. Part of the stores and enterprises began to explore online-offline
integrated marketing network model. Sales of certain furniture companies specializedin e-commerce have grown rapidly. More enterprises are cooperating with Tmall,
Jingdong Mall to carry out online and offline sales at the same time which areaccepted by the consumers. The e-commerce furniture sales have been growing
quickly so that assigned sales growth targets are being realized by full integrating
online experience and offline experience of the consumers.
2.1.6.3 Recommendations of furniture industry development of China

75

(1) Build up brands by innovation
China has now come up with a number of furniture enterprises with good social image
and brand influence, including some listed enterprises. The future Chinese furnitureindustry will witness a growing number brand enterprise based furniture groups.
Through scientific and technological innovation, product innovation, marketing
innovation, the brand-oriented core competition strength will be enhanced to improvethe brand value, expand the brand influence to promote the stable sustainable
development of enterprises.
(2) Improve the management level
The general competence of the furniture enterprise managers of China is on a rise.
Highly educated personnel are joining the furniture enterprises to adapt to newchanges of the furniture industry. Under the current development environment ofChina, there is high need for the managers to improve their management level
especially by further strengthening integration of industrialization and digital
information technology. By implementing the "Made in China 2025" and Industrial 4.0
strategies, there will be more developments and actions in specialized production,using modern technology to transform traditional industries, actualizing the theconcept of energy conservation, and in reducing resource consumption for improved
resource utilization efficiency.
(3) Enhance industrial concentration
In course of the furniture industry industrial restructuring process, it is imperative tosolve the problems of product homogeneity and overcapacity. It is proposed thatindustry concentration be enhanced through mergers and acquisitions among
enterprises, to gradually phase out the poor-quality products, low-efficiency backward
production capacity to achieve a qualitative leap of the furniture industry of thecountry.
(4) Strengthen the construction of industrial clusters
Furniture industry clustering has an important role in promoting the furniture industryof China. It is proposed to strengthen the construction of furniture industry clusters byfortifying the industry layout planning to promote the formation of furniture industry
chain. There is also high need for the enterprises to strengthen cooperation with
universities, consultancy firms and other professional entities. In addition, endeavours
should be made to strengthen specialized division of labour, good public service
platform operation and provide professional services of design and development,
quality inspection, e-commerce, training and education, trade docking etc, to expand
marketing channels of the industrial cluster enterprises and to improve the overalllevel of the industrial cluster enterprises.
(5) Transform from manufacturing to production service
In a mature market economy, it is the consumers' interests that to a large extent
determines how the commodities will be produced and how the services be provided.
The simple-production enterprises that cannot fully integrate consumer trends into76

their operational strategy will gradually lose market share. Enterprises’ shift fromproduction to service means is the sure performance of a mature business, but also
an inevitable result of industrial upgrading.
2.2 Case Analysis of Timber Industry in Guangdong Province of China
Guangdong as the frontier province of reform and opening up of China, has produced
for recent years about one-seventh of the national economic output ranking the firstamong all the provinces of the country.
By adopting the reform and open polices and with the rapid development of thenational economy and surging domestic and international demand for timber products,
the timber processing industry developed fast in Guangdong. Currently, theproduction of paper and timber furniture in Guangdong is at the national leading
position, with its furniture export comprising about half of the total of the country.
The boom of timber processing industry not only provided plenty of wood products formeeting the consumers’ demands, but also triggered huge social investments forforestation which contributed to local forestry development by significantly improving
the forest area, forest standing volume and forest coverage of the province.
2.2.1 General situation
With the fast growth of national economy and uprising national and international
market demand for timber products, Guangdong timber processing industry remained
thriving in 2015 with output value of 482.82 billion yuan, ranking the first in China.
(1) Timber industry products
There was increase for most scale-production wood processing products in theprovince. The wood-based panel production totaled 12.21 million cubic meters
inclusive of plywood for about 3.27 million cubic meters, fiberboard 6.09 million cubic
meters, particleboard 1.76 million cubic meters, and blockboard 0.39 million cubic
meters. Refer to the following table.
Table 2-4: Timber industry output of Guangdong
Products

Unit

2014

2015

Increase by (%)

Wood based panel
Plywood
Fibreboard
Particle board
Decorative board
Blockboard
Solid wood flooring
Composite wood flooring
Bamboo floor
Furniture
Wood furniture
Papermaking

Cubic meter
Cubic meter
Cubic meter
Cubic meter
Sqm
Cubic meter
Sqm
Sqm
Sqm
Piece
Piece
0000 tons

11,174,228.0
3,272,619.4
5,678,858.8
1,562,303.6
14,683,243.5
373,129.0
17,383,402.3
16,114,616.7
280,895.0
168,636,512.4
56,684,466.4
1,992.83

12,211,789.9
3,622,934.3
6,085,725.0
175,512.3
12,924,788.8
387,288.0
15,189,612.6
14,073,967.0
359,197.0
156,761,702.2
51,285,443.6
2,078.29

9.3
1.7
7.2
12.3
-12.0
3.8
-12.6
-12.7
27.9
-7.0
-9.5
4.3

77

(2) Timber industry product output value
Along with the increase of wood product output in 2015, the timber processing
enterprises in Guangdong have faced the stern situation of rising labor cost, rising raw
materials cost and rising RMB exchange rate. To secure higher economic return, theenterprises have to transform and upgrade the manufacturing and continuously
improve product quality. Consequently, most wood enterprises in Guangdong
adopted competitive prices for both export and domestic sales leading to increased
wood processing industrial output value in 2015 although at reduced levels. Refer tothe following table.
Table 2-5: Timber industry output value of Guangdong (1,000 yuan)
Timber processing industries

2014

2015

Increase by (%)

Wood processing

10,290,233.0

12,476,417.0

21.25

Wood-based panel

40,801,229.0

46,008,602.0

12.76

Wood product17,448,645.0

20,269,857.0

16.17

Bamboo, rattan, palm fiber, grass

10,585,386.0

12,210,758.0

15.35

Wood furniture

101,937,202.0

106,946,022.0

4.91

3,081,226.0

3,517,279.0

14.15

Bamboo or rattan furniture
Paper industry
Pulp manufacturing

204,533,650.0

5.51

695,123.0

2,019,598.0

190.54Papermaking

79,510,662.0

83,565,396.0

5.1

Paper products manufacturing

124,327,865.0

130,215,159.0

4.74

388,677,571.0

417,229,088.0

7.35

Total of the province

2.2.2 Statistics of the Timber processing enterprises
Annual information for timber processing enterprises have been collected andconsolidated. By December 17, 2016, information have been collected from (1) 47
MDF enterprises that have totally 51 production lines and designed annual production
capacity of 3.822 million cubic meters; (2) 71 particleboard enterprise that have totally
79 production lines, the designed annual production capacity of 3,076,400 cubic
meters; (3) 87 plywood enterprise that have totally the designed annual production
capacity of 4,068,600 cubic meters; (4) 168 wood flooring enterprises that have totallythe designed annual production capacity of 167.42 million square meters, of which
57.56 million square meters of solid wood flooring, composite solid wood flooring
44.89 million square meters, 63 million square meters of laminate flooring and 1.97
million square meters of bamboo flooring; (5) 449 mid-size and large enterprises ofwood furniture, including Taisheng, Meishi, Yihua, Guangrun, Huangchao, Liangbang
etc; (6) 836 paper or paper product enterprises with scale production, including 239
enterprises for paper-making, 230 enterprises for paper products, 30 pulp mills, 12large or very large paper companies.
2.2.3 Rapid development of the furniture industry
With the rapid development of national economy and continuous improvement ofpeople's living standards since 1980s, the wooden furniture industry in Guangdong
flourished. Within about thirty years, the furniture industry in the province has fledged
78

from the past cottage-scaled production into a large-scale dynamic furniture industry
centering on the production bases of Dongguan, Shunde, Shenzhen, Zhongshan andGuangzhou and extending to Pearl River Delta and the whole Guangdong province. A
complete industry chain of furniture production, supply and marketing has come into
being. The furniture industry in Dongguan, Shunde etc has become local pillar industry.
Still, the managerial strength of the furniture industry in Guangdong is to be improved,
especially in furniture design. Guangdong furniture industry has now few genuine local
brands. Many of the furniture enterprises are small-scaled with limited research anddevelopment capability, so most living on imitating others’ products. The competition
among the furniture enterprises tended disorderly which has begun to restrict thedevelopment scale.
(1) Briefing of the local furniture industry development
The furniture industry in Guangdong has developed very quickly. In early 1980s, thetimber consumption for wood furniture industry of the province was only 18,900 cubic
meters. With the high-speed development of national economy and continuous
improvement of the people's living standards, the furniture industry in Guangdong has
developed progressively from the previous state or collective owned small factories tomodern enterprises with multiple ownerships of the state, collective, private, Taiwan
and Hong Kong. And in the production equipment, the mechanization andsemi-mechanization operations have replaced the hand tools.
Within the first two years of 1980s, the furniture timber consumption of the province
climbed up to 70,000 cubic meters including a lot of wood-based panels as raw
materials. In the 1990s, the furniture timber consumption of the province reached
100,000 cubic meters and the consumption volume of wood-based panels for thefurniture industry surpassed that of log so bringing wood-based panel production tohigher levels. According to statistics, the output of wood-based panel of Guangdong
had risen from 41,000 cubic meters in 1978 to 1.762 million cubic meters in 2002
including locally produced MDF of 560,000 cubic meters and imported MDF of
730,200 cubic meters. And this means that the MDF consumption has sourced fromthe production of Guangdong, other parts of China and overseas. After 1993, a leap
forward took place to the furniture industry in Guangdong with a variety of types ofownerships for the furniture enterprises. There were more than 6,000 furniture
manufacturers in 1999 with the output value of 32 billion yuan. In recent years, to meetwith the demands of global development of the furniture industry and to improve theyield and quality, the furniture manufacturers in Guangdong introduced world
advanced equipment and technology which have significantly improved the output,
quality and style of the Guangdong furniture.
According to preliminary statistics, there are now 9,600 furniture enterprises in
Guangdong employing over one million people. The output value of Guangdong
furniture in 2002 reached 48 billion yuan accounting for 30% of the national total of
160 billion yuan. Of the 48 billion yuan, the export value was 2.733 billion USD
accounting for 50.61 percent of the national total of 5.417 billion. In 2015, the wooden
furniture export of Guangdong reached 10.97 billion USD accounting for 51.76 % of
the national total. With no exaggeration, the furniture export of Guangdong has
basically represented that of the country.

79

The furniture industry boom in Guangdong helped flourish the downstream industries
of furniture industry. The furniture raw material markets of Guangdong especiallythose of wood-based panels, logs and sawn timber products play a major role in the
country. The province has more than 1,000 large and small enterprises of wood based
panels and the reported wood based panel production rose from 1.762 million cubic
meters in 2002 to 14.54 million cubic meters in 2015, an increase of 91.27%. And thetimber consumption for furniture for the whole province rose from 18,900 cubic
meters in early 1980s to 5.07 million cubic meters in 2015, an increase of 268.25
times. In fact, it is assessed that the wood based panel production in Guangdong
should be around 13 million cubic meters with the reasonable employment of about
100,000 people. In addition to wood based panel, there have been other relatedindustries such as woodworking machinery enterprises, furniture hardware companies,
paint companies, packaging enterprises. Although there have been no statistics forthe numbers of enterprises and employment etc., several paint factories in
Guangdong such as the Dabao Paint Factory in Shenzhen, Huarun Paints Factory inShunde are well-known paint brands in and outside the province. The Huarun Paints
Factory for example, has had annual output value over several hundred million Yuan.
The Guangdong Shunde Lunjiao over the past decade started from scratch todevelop into woodworking machinery production and selling base in China. And thefurniture hardware accessories in Guangdong Leliu Town are in rapid development sohighly reputable.
The rapid rise of the furniture industry also prospered the circulation market. Along the
Guangzhou-Zhanjiang highway and at the section from Shunde to Longjiang, there
have stretched the “furniture promenade” over 10 kilometers where the Shunde
Lecong International Furniture City has been a spectacularly busy area. Withhundreds of shops at a shopping area of 200 million square meters the City is now thelargest furniture wholesale market in Asia where more than 2000 furniture shops
around the country gathered and the annual sales are over 20 billion yuan. In addition,
there are Dongguan Houjie International Furniture City, Heng Fung Furniture City,
Shunde Longjiang International Furniture City, Guangzhou Jinhaima Furniture City etc.
Furthermore, many large, fashionably decorated wholesale-retail markets focused on
the brand-name furniture of the province and across the country are becoming
furniture sales centers of the countries. There are also large raw material markets
such as Longjiang Wood Wholesale Market, Dalingshan Jilong Timber Market, Houjie
Industrial Wood Decorative City, Guangdong Yuzhu International Timber Market andGuangzhou Tianjian Square.
There are 11 large furniture fairs held annually in Guangdong, attracting from aroundthe world numerous furniture factories, businessmen, enterprises to come to buy,
negotiate and visit making Guangdong furniture a world attentive venue. Although
there is still some distance for Guangdong to catch up with world level furniture, it has
been indisputable that the Chinese furniture industry is firstly the Guangdong furnitureindustry. Like what some insiders said, "Italians makes worldwide furniture,
Cantonese makes Chinese furniture". In fact, the furniture export volume of
Guangdong has already exceeded that of many other countries.
In terms of product types, Guangdong furniture are mainly solid wood furniture andwood-based panel furniture, followed those made of metal, glass and other materials.
Although Bamboo and rattan furniture is of lesser output proportion, a few bamboo
80and rattan furniture plants such as Guangdong Feicui Rattan Factory, Dongguan
Yitengyuan Rattan etc are internationally reputable with products best-sold inSoutheast Asia and European markets.
The furniture enterprises in Guangdong are mainly privately or collectively owned, or
kept by Hong Kong and Taiwanese entrepreneurs. Apart from these furniture
enterprises of Hong Kong, Taiwan and small part of private enterprises, most furniture
enterprises are small or medium sized.
(2) Regional distribution of furniture enterprises
The furniture industry in Guangdong is usually classified in accordance with theirlocations which concentrated in the Pearl River Delta especially the cities of
Dongguan, Foshan, Zhongshan, Shenzhen and Guangzhou. Among these,
Dongguan has more than 3,000 furniture enterprises employing 360,000 people withan annual output value over 60 billion yuan. Dongguan furniture industry produces
high-end and mid-end solid wood furniture, office furniture, including (such as theseused in kitchen, bedroom) and software furniture etc.
The Dongguan furniture is featured with brand production so mostly for export. The
private, collective and overseas furniture enterprises glorified in parallel in which 15%of the enterprises are collectively owned, 40% privately owned and foreign-funded
enterprises accounted for 45% of the total. Currently, the towns of Houjie, Dalingshan,
Changan etc have become major production bases of furniture and the Dalingshan
Town alone has more than 200 Hong Kong or Taiwan-funded furniture enterprises
with the export value nearly 1.5 billion USD accounting for over half of the total of the
Guangdong province. Most of theDongguan furniture enterprises are considerablylarge manufacturers, many of which have annual output value over 1 billion yuan,such as Dongguan Taisheng Furniture Factory, Meishi Furniture Manufacturing
Co.Ltd. However, most of the large and very large enterprises are kept byentrepreneurs of Hong Kong and Taiwan. Furniture industry has become a local pillar
industry ranking in the fourth place in terms of output value, next to home appliances,clothing and electronics. The local government has attached great importance to thefurniture industry by creating brand effect, opening an additional or alternative
marketing channel which has helped form the Houjie International Famous Furniture
Fair (Dongguan) Club, "Elite Furniture Fair bringing disseminating huge reputation of
Dongguan furniture across the country. Due to the innovative design, advanced
production equipment, the Dongguan furniture are mostly fashionable and of goodquality so widely welcome by domestic and international customers. They Dongguan
furniture not only entered the Zhongnanhai in Beijing, but also won all the four awardsof Chinese exhibitors at the World Elite Furniture Fair held in Milan of Italy in
September 1999 so expanding Chinese furniture to the world. In 2002, the production
value of export furniture of Dongguan Taisheng Furniture Factory alone reached morethan 200 million USD.
It is estimated that of the thousands of large and small furniture enterprises in Shundeof the Foshan city, about 2,000 ones are scale production enterprises. For example,
Lai Xing Furniture Factory, the Jinbaoma Furniture Company, ZhongTai, Weibang etc
are larger manufacturers. Most of Shunde furniture enterprises are privately run, small
and medium scale, producing furniture for moderate domestic consumers except a81

few high-end solid wood and upholstered furniture manufacturers. Relatively large
amount of furniture in Shunde is also sold to the United States, Japan etc. For
example, the Hua Wei Outdoor Furniture, Sanyou Ming-styled Furniture etc. enjoys
good reputation overseas. Shunde furniture is characterized with good marketability ofthe products. And the furniture industry is of the three major industries withgovernmental preferential policy support (namely the home appliances, furniture andflora) .The Lecong Furniture City started from the “roadside shop plus backyard
factory” to develop into the Asia's largest furniture wholesale and retail base with an
business area of 2 million square meters where two furniture exhibitions are annually
held for Longjiang and Lecong respectively, attracting buyers from all over the country.
All these indicate that the development of Shunde furniture industry with its
marketable products has great development potential.
Zhongshan furniture industry of Guangdong includes some large and small
wood-based panel and solid wood furniture factories such as the Zhongshan Guotai
Furniture Company, Zhongshan Sihai Furniture Factory whose output value are at
hundred million yuan. However, redwood furniture is the main feature of Zhongshan
furniture which has Dayong Town as the main production base and wholesale
distribution center. Dayong Town has more than 300 redwood furniture enterprises
employing lots of technicians from Zhejiang province. High quality redwood such asthat of Dalbergia odorifera etc has high hardness and stability properties and noteasily deformed. With exquisite workmanship, unique shape, the locality employedover 30,000 people. There have been local redwood furniture research anddevelopment centers, exhibition venues making redwood furniture the focal industryof Dayong Town. Almost all local households are engaged in redwood furnitureindustry.
In recent years, the furniture industry in Guangdong has developed into an important
industry from the core developed cities of Dongguan, Guangzhou, Shenzhen, Shunde,Zhongshan to the whole Pearl River Delta region so an engine of the provincial
economy. The furniture industry added fixed assets of over 10 billion yuan to
Guangdong, making tremendous tax revenues and created employment opportunities
for over one million people in surrounding areas, enormous social and economic
benefits.
(3) Development history of the furniture industry
Development of Guangdong furniture industry started from late 1970s to early 1980s
the beginning time of national opening up, when a few Hong Kong and Taiwan
entrepreneurs established furniture factories in Guangdong. Some local farmers
realized the market potential of furniture manufacturing, so to start their household
furniture workshops. This is called the startup stage of Guangdong furniture industry.
At this stage, self-employed individuals with their initial capital accumulation began topurchase a piece of land in front of their houses or from furniture manufacturing
centralized sites to build workshops or mills. It typically contained a shop at roadsidewith backyard as the factory. Examples include the furniture enterprise at Longjiang
town of Shunde city, and the redwood furniture in Dayong town of Zhongshan city. Still,
the furniture enterprises kept in mainland China by entrepreneurs of Hong Kong,
Macao and Taiwan, had started with a formal design for production. For example,82

Huasheng Furniture Factory of Shenzhen city has been China’s first plate furniturefactory with all its production equipment imported. Its operation laid a technical model
for Chinese plate furniture production, which then attracted huge amount visitors fromall over the country.
During this period Chinese furniture is basically plate furniture. The related historicalbackground is as the follows. From late 1970s to the mid-1980s, wood-based panel
developed quickly to provide a large number of wood-based panel raw materials forfurniture industry. Since 1980s the reform and opening up time of China, Chinese
people began to pursue a stable life but with limited purchase strength, they can only
afford economical furniture such as the large-size, low price board furniture.
Meanwhile, a large number of foreign companies that opened factories in Guangdong
needed a lot of plate office furniture. While some quality assured plate furnitureproduction lines were imported, local farmers also used simple wood processing
equipment to produce low-quality plate furniture. Often furniture factories with a few
sets of the disc saws could make in small shed some good-looking wood-based
furniture that apparently comparable to bestsellers and suitable for temporary use by
migratory field work managers in Guangdong. The furniture quality in Guangdong at
this period vary significantly, and the price differed from several hundred yuan to tensof thousands yuan. Still, due to the huge furniture market in Guangdong, no matter
what quality or price levels the furniture belonged to, someone would buy it once it
was produced.
From mid 1980s to early 1990s, Guangdong furniture industry entered a period of
rapid development. At this time most furniture enterprises have accumulated capital,
increased management efficiency, expanded investment scales, and many factories
were importing directly large woodworking equipment from Germany or Italy such as
the CNC machining centers, electronic cutting saws etc. Guangdong Federal
Furniture Factory, Qianjin Furniture Factory, Zhongshan Guotai Furniture Factory,
Sihai Furniture Factory, etc. were giants grown up during this period of time. Incomeof the common people at this period was considerably improved so their aesthetic
attitude to furniture has changed by abandoning the large-block, single color furniture
to pursue natural-beauty, genuine real material furniture. Consequently the solid
wood furniture typically those furniture made by the Federal Furniture Factory turned
most popular in northern and southern parts of the country for a time. In fact, since1949 the birth time of the new China, there had been no furniture becoming as widely
popular throughout the country as the Federal chair! Of course, board furniture
remained a large market share thanks to the fast growth national economy andincreased demand for office furniture. During this period, the concept of office furniture
was distinguished and office efficiency, screens for open-style offices became
acceptably popular, for which such furniture enterprise as Guangdong Nantian
Furniture Company produces well-known office furniture brands. On the one hand,
there was rapid growth of production. On the other hand, the genuine managementand design talents were scarce, resulting in the then furniture factories mass
reproduce the same products. Still, some stronger factories began to go to Cologne,
Paris and the United States where world high-end furniture fairs were held. To thefurniture enterprises, it is more like going to the exhibitions to copy style than going to
the exhibitions to learn. By copying and following suits "new products" appeared for
those companies that could not afford to go to world exhibitions to further in domestic
exhibitions. The furniture style looks monotonous and it is very difficult for ordinary83

people to differentiate the quality, so the competition in the furniture market simply
evolved into competition of prices: consumers only buy low price products.
Up till the end of last century and the beginning of the 21st century, the Guangdong
furniture industry entered the maturity period. At the beginning of the century, theenterprise decision-makers found that their existent industrial operations could hardly
sustain. The calmly analyzed the realities and recognized that only the production withown characteristics can have better positions at the market. To this end, they began
to focus on such aspects of the product quality, recruitment of higher level personnel,
which led to improved furniture quality, diversify products and styles, integrated use of
production raw materials, which offered ordinary customers more options and thefurniture exports also increased. Nevertheless, lack of talents and lack of furnitureproduction research and development capabilities remained major constraints for thefurniture industry. For these reasons, such problems of the dimension stability of wood
furniture materials, wood property modification, use of fast-growing timber, reductionof formaldehyde emission of furniture materials etc failed to have good solutions.
Guangdong is now processing a large quantity of import timber, but many countries
have begun restricting export of logs, which bring about major impact on timber
processing enterprises in Guangdong that remained only to rely on imported
eucalyptus chips for pulp production. The lower prices from abroad form alsosignificant pressures. Most furniture enterprises in Guangdong are small private
enterprises. Although these business owners are aware of the importance of researchand development of furniture, few are unwilling to invest on such public good activities.
Some large companies do engage in immature researches, but with their confidential
control, there are hardly real technical exchanges or academic activities. Such
condition leads to stagnancy of the research and development furniture.
(4) The furniture industry development trends
Looking to the future, Guangdong furniture industry and furniture industry of China asa whole will faced a situation of continuous steady and rapid development. In theupcoming decade, with the deepening of China's accession to WTO and along with
influx of foreign goods and investment, the domestic market and products will become
further internationalized. The Chinese furniture industry shall with its brand new look,reinvent the furniture industry to meet domestic and international market competitive
challenges, and to, soon as possible, realize the shift from a large furniture
manufacturer to a strong exporter. Vietnam and other Southeast Asian countries haveissued special preferential policies to attract Taiwanese furniture enterprises to their
homelands and to use the price advantage to seize the international furniture market
share. Their annual furniture export to the United States has reached two to threebillion USD. This has formed a major impact to the Guangdong furniture industry thathas long adopted competitive prices at international furniture market. For the first 11
months of 2016, the wooden furniture export of Guangdong fell by 8.65 percent overthe same period of the previous year.
Table 2-6: Production value and structure of scale production furniture enterprises(unit: 1,000 yuan)
Furniture Manufacturing
Wooden furniture2011
19,492,604
6,122,781.7
842012
123,211,419
701,780.0

2013
146,050,028
8,553,816.9

2015
184,732,000
106,946,022

Bamboo& rattan furniture

2,200,527

2,578,269

2,943,226

2,517,279

In 2015, the furniture output value of the province is about 382 billion yuan, an
increase of 5.2% over the previous year. Of the 382 billion yuan, 329.2 billion yuan or
60% is for wood and bamboo furniture. The export value is 10.9702 billion USD, an
increase of 5.51% of the same period of the previous year and accounting for 51.76
percent of Chinese enterprise export of wood furniture.
(5) Impacts from Vietnam
About one-third of the wood furniture of Guangdong is for exports. However, this has
been difficult under the impact of Vietnam since 2016.
Due to the slow recovery of international economy, the economic development slowed
down in many countries. The global trade remained in doldrums and the international
furniture market tended to shrink. With the continuous depreciation of euro and thecurrencies of many countries, the rush of certain Southeast Asian countries (such as
Vietnam) to seize the market furniture with low-cost advantage, the furniture market
became highly competitive resulting in unsynchronized export volume and export
value. For example, the volume of furniture export to Japan increase by 48.59% but
export value grew by only 0.19%. The exports to the US went up by 24.52%, but export
value grew by less than 14 percent. These imbalances seriously affected the export
returns of Guangdong wood furniture.
By making arduous efforts to identify market, there have achieved good results inexport of seats and wooden furniture of Guangdong despite of the general export
downturn and the unfavorable environment of global furniture market. For the first 11
months of 2016, the export of wood seat and wooden furniture totaled 82.3967 million
pieces, a decrease of only 9.55% over the previous year. Specifically, the export ofwooden furniture totaled 57,780,200 pieces, a decrease of 10.1% over the previous
year. In export value, the wooden furniture and wood seats totaled 965 million USD, adecrease of 6.48% over the previous year, inclusive of export of wooden furniture of
6.261 billion US dollars, down 8.65 percent over the previous year.
2.2.4 Papermaking is the lead part of the timber industry in Guangdong
Paper industry as the pillar industry of Guangdong is lead part of the timber processing
industry in Guangdong. In 2015, the scale-production industrial production output ofthe paper making industry of Guangdong is 20,782,900 tons, an increase of 4.3% overthe previous year, an increase of 5.51 percent over the same period last year ranking
the first in China. The paper industry output value is 215.8 billion yuan, an increase of
5.51% over the previous year inclusive of 83.565 billion yuan of paper, 130.215 billion
yuan of paper products and 9.068 billion yuan of pulp.
In 2015, Guangdong imported 13,052,800 tons of waste paper, 1.5604 million tons ofpulp, an increase of 55.8% over the previous year.
Table 2-7: Paper industry output value of Guangdong in 2014 and 2015
(unit: 1,000 yuan)
2015

2014
85

Increase by (%)

Paper industry

215,800,153.0

204,533,650.0

5.51

Pulp

2,019,598.0

695,123.0

190.54

Paper

83,565,396.0

7,951,662.0

5.1

Paper products

130,215,159.0

124,327,865.0

4.74

Guangdong as one of the first provinces to adopt the reform and opening up policies
represents about one-seventh of the national economy. The rapid development ofChinese economy and the continuous improvement of the people's living standards
combined to increase the market demand for paper products, leading to the growth of
Guangdong paper industry in three major sections centering around the cites of
Dongguan, Jiangmen and Zhanjiang,
2.2.5 The timber processing enterprises of Guangdong managed to address the
economic barriers to normalize its import and export
Guangdong has been the province with most developed timber industry. The annual
timber consumption is equivalent to log volume about 35 million cubic meters, of which
8 million cubic meters are imports. On the other hand, Guangdong exports every year
a large number of wooden furniture, wooden flooring and a variety of wood-based
panels.
Due to the sluggish international economy, the slowdown of economic recovery inmany countries, and depression of the global trade, such "anti-globalization" thoughts
typically of protectionism and isolationism rose with the geopolitical risks. Certain
western countries came up with emerging economic barriers, such as the EU Timber
Regulation, US Lacey Act Amendment and so on.
Guangdong as a comparatively mature market economy conducts import, productionand export in accordance with the requirements of the customer country. After theissuance of the US Lacey Act amendments, the Guangdong furniture industries turned
to directly import raw materials from the United States by observing the various
requirements of the Act to then organize the production in line with the US productstandards. For example, in accordance with the requirement that the formaldehyde
emission of all wood furniture, wood flooring exports to US should meet California's
mandatory standards, the Guangdong furniture and flooring companies turned toimport various wood-based panels that conform to the compulsory formaldehyde
emission standards of the US. In addition, relevant enterprises have actively
participated in a variety of timber legality verification activities, including due diligencesystem by the third parties to enable enterprises to export products meeting therequirements of the customer country. Therefore, following the barriers of the "EU
Timber Regulation", "US Lacey Act amendment" etc, the timber processing
enterprises in Guangdong have managed to readjust themselves. For example, of thetotal wood furniture consumption of 5.07 million cubic meters, the import of rubber
wood from Thailand that was equivalent to log volume of 4.0058 million cubic meters
accounted for 79.01 percent, and the import from the United States of 1.1391 million
cubic meters made up 22.47%, and other countries to import timber included Sweden,
Finland and Australia. Therefore, the various economic barriers, trade barriers, did notcast significant impact on Guangdong timber imports. The more obvious impact has

86been on the redwood furniture processing which is however of limited quantity andproportion.
In general, so far, it has not much impact on import and export of Guangdong.
Table 2-8: Timber and timber products import volume and value of Guangdong
Log

Sawn
timberPlywood

2010

2011

3

Volume (10,000 m )159.26189.43193.49220.95304.62277.54

Value (10,000 USD)

50,509.73

87,040.41

85,671.97

95,636.82

169,814.55

104,539.22

3

Volume (10,000 m )281.71

338.37356.3

468.43528.98622.37

Value (10,000 USD)

90,786.81

116,079.5

127,660.81

178,545.89

225,673.94

221,775.69

116,430

102,21392,48473,54374,41575,90753,646.94

5,343.09

4,922.03

3,325.9

3,742.88

41.49

62,647

41,98730,64322,764

142,794

99,934

1,609.58

1,237.88

1,392

1,076.19

3,315.94

3,429.88

Volume (m )251,928

220,164

246,222

252,800

197,338

20.38

Value (10,000 USD)

4,711.08

4,466.45

4,949.85

4,843.05

4,041.19

4,147.37

34.84

28.53

28.66

47.57

46.3

49.74

3,682.02

3,973.16

4,070.35

7,016.03

7,289

8,206.73

3

Volume (m )Value (10,000 USD)

Fiberboard

3

Volume (m )Value 10,000 USD)

Particleboard

Woodenfurniture3

Volume (10,000
pieces)Value (10,000 USD)

2012

2013

2014

2015

Table 2-9: Timber and timber products export volume and value of Guangdong
2010
Log

Sawn
timberPlywood

Fibre
board

Particleboard

Woodenfurniture

Volume (10,000
cubic meters)
Value(10,000 USD)
Volume (10,000
cubic meters)
Value(10,000 USD)
Volume (10,000
cubic meters)
Value(10,000 USD)
Volume (10,000
cubic meters)
Value(10,000 USD)
Volume (10,000
cubic meters)
Value(10,000 USD)
Volume (10,000
cubic meters)
Value(10,000 USD)

2011

2012

2013

2014

2015

0

0

0

0

0

0

0

0

0

0

0

0

0

1

0

0.69

0.65

0.65

0

34.99

0

227.88528.98234.43390,002562,320

591,144591,273

664,845619,589

99,392

23,020.16

24,458.57

27,925.98

32,705.95

44.76

121,544

110,975

143,619

74,06993,847

197,521

2,158.41

45,367.8

4,346.62

381,4.57

9,629.03

13,426.4
2

8,093

5,826

3,190

9,359

48,0942.07

2,158.41

4,536.45

453.55588.382,394.78

1,458.18

7,019.99

6,922.39

6,518.33

6,297.47

6,894.29

7,037.05

473,459.4
5517,375.79

567,427

627,780.78

718,614.2
2758,205

2.2.6 Conclusion
After thirty years of continual development, the timber industry of Guangdong has
evolved from a backward province of timber industry to an initial international timber
processing plant province of paper-making, wood furniture, wood-based panels and87wood products with advanced timber processing system and products sales todifferent parts of the world. The comparatively mature market economy especially thehonesty and product quality performances of the production enterprises led toadmirable reputation in high output and reliable quality for the timber industry inGuangdong, for both domestic sale and export. The “high quality for high price”
competition mechanism prevailed so the enterprises generally have good returns.
Take 2015 as an example, the wooden furniture export volume of Guangdong
accounted for 30.68% of the total export of China, but the export value represented
51.76% of the country. For the first 11 months of 2016, the wooden furniture export
volume made up 27.42% of the country while the export value comprised 50.19%.
2.3 Cases of External Investment and Business Integration by the Chinese
Private Enterprises
In the wake of the uninterruptedly accelerated pace of “going global” by Chinese
forestry enterprises in recent years, the business scale is cumulatively expanded anddomains are gradually broadened. However, an increasingly complex external
environment is also faced by overseas investment and cooperation in forestry. By
the end of 2014, China’s stock of overseas investment in forestry reached US$ 2.34
billion, with 6.1 million ha forested land purchased or rented and about 200 overseas
investment and cooperation projects carried out in more than 20 countries. The
Chinese enterprises involved in overseas investment and cooperation in forestry
are mainly engaged in logging, primary processing and production of timber products
and furniture.
Many of the foreign countries hosting Chinese enterprises’ forestry investment areenduring unfavorable environment for domestic economic development, large
population of relative poverty, incompetent governments and low transparency indecision-making. Some of them are even faced with severe corruption. Such factors
impose many more risks on the overseas investment by Chinese enterprises.
Meanwhile, there exist some undeniable facts, including uneven investment abilities
among different Chinese enterprises, low competence and chaotic cutthroat
competitions between them, inexperience in international cooperation and pooranti-risk capability, and the lack of legal consciousness and environmental awarenessof a few enterprises (which will diminish the international image of China). Some
enterprises are also faced with various challenges, such as inaccessibility ofnecessary information, unpreparedness, difficulties in getting loans, incomplete andunsystematic precautionary measures against risks, incomprehension of taxation
laws and regulations of host countries, underutilization of external resources,
ineffective communication with governments of host countries, insufficient attention
paid to the subsequent business integration and the dispute settlement, and so on.
The above challenges constrain the business development to a severe extent.

88

As a result, successively, the State Forestry Administration (SFA) and the Ministry ofCommerce (MOFCOM) of China have issued A Guide on Sustainable Overseas
Silviculture by Chinese Enterprises and A Guide on Sustainable Overseas Forest
Management and Utilization by Chinese Enterprises (hereinafter referred to as “theGuides” together) in collaboration. It is hopeful that, under the guidance andregulation provided by the Guides, when going global, Chinese enterprises will
increase their attention to the sustainable forest management and community
development. They will adopt sustainable forest management practices in alignment
with the principle and tenet of benefitting the localities, and with greater importanceattached to maximizing the integrated economic, social and environmental benefits,
combine the enterprises’ overseas development and the sustainable economic, socialand environmental development of local communities in a coordinated manner.
Under promotion and help of overseas and domestic organizations, the Chinese
government encourages stakeholder enterprises to implement the Guides, provides
trainings and pilots for their application and will include them into the performanceappraisal and supervision on overseas forest management and utilization byenterprises stepwise.
Generally, the overseas investment by Chinese enterprises is growing year by
year, but the investment is still in its “babyhood” and consequently there arerarely overseas mergers conducted by Chinese enterprises.
2.3.1 An overview of oversea Investment by Chinese enterprises
China’s forest industry accelerates its pace in going global in recent years andinnovations of modes in conducting overseas forestry investment are madeconstantly.
Currently, the overseas investment practices by Chinese enterprises mainly include
logging, primary processing and production of wooden products and furniture in
Russia, Africa, Southeast Asia, America, and so on. Significant changes took place inregard to investment modes, i.e. from simply logging and primary processing to theintegration of logging, deep processing, logistics and trade, and from directly
purchasing or renting forest resources by enterprises to multiple cooperation patterns
including acquisition, joint venture, capital operation, strategic alliance, equity
replacement, etc.
SFA provides a platform for cooperation among governments, banks and enterprises
and introduces new cooperation mechanisms and modes to assist eligible forestry
enterprises in applying for loans.
2.3.1.1 Investment distribution in different host countries

89According to a questionnaire survey conducted by a Chinese organization in 2013,
Chinese enterprises had invested in 65 countries by the end of 2013, and most of
their overseas investments were located in Russia. A total of 589 forestry investmentcompanies were established abroad by 557 Chinese enterprises, with a total foreign
direct investment (FDI) of US$ 3.918 billion, while purchasing and renting 56.368
million ha forested land, and providing a total employment of 29,000 in the hostcountries, including 18,000 foreign employees.
Most of the 589 Chinese companies engaged in overseas forestry investment arelocated in Russia, up to 291 companies and 49.4% of the total. Laos ranks thesecond, with 70 companies and 11.8% of the total. USA comes next with 23
companies and 3.9%. Cambodia, Gabon, Canada, New Zealand and Indonesia also
host more than 10 Chinese companies respectively. The 589 overseas companies
are distributed in six continents on the earth, including 141 in Asia, 68 in Africa, 17 inSouth America, 40 in Oceania, 19 in North America and 14 in Europe, and separately
23.9%, 11.5%, 2.9%, 6.8% 3.2% and 2.4% as in proportion of the total number.
(1) Distribution of purchased and rented area of forested land
Chinese forestry enterprises purchased and/or rent a larger area of forested landabroad. The total area is more than 43 million ha, amongst which around 40 million haor 92.7% of them are situated in the following five countries in a reducing order by
area: Canada, Russia, Guyana, Congo and Gabon. In particular, respectively, 42.4%
and 41.3% of the total are located in Canada and Russia, while 3.2% in Guyana, 3%
in the Republic of Congo, 2.9% in Gabon and the remainder 7.3% are distributed inother host countries.
(2) Distribution of actual annual timber harvest
The actual annual timber harvest obtained abroad by Chinese forestry enterprises isabout 15.20 million m3 and around 14 million m3 or 92.3% of the total are harvested in
the following five countries in a reducing order by quantity: Russia, Canada, New
Zealand, Papua New Guinea and Gabon. Amidst them, 59.9% of the total harvest are
obtained in Russia, 19.2% in Canada, 7.4% in New Zealand, 4.2% in Papua New
Guinea, 1.6% in Gabon and the remainder of 7.7% are obtained from other countries
altogether.
(3) Distribution of offshore assets
The total offshore assets actually owned by Chinese forestry enterprises amountapproximately US$ 3.7 billion, amongst which US$ 2.971 billion or 80.5% of the total
is located in the five countries in a reducing order by amount: Russia, Guayana,
Cambodia, Congo and Canada. Specifically, US$ 1.823 billion or 49.4% of the total islocated in Russia, and US$ 500 million or 13.6% is in Guyana.
90

(4) Distribution of Actual Investments
According to the incomplete statistics by the end of 2012, a total of 589 forestry
companies were invested and established abroad by 557 Chinese enterprises ofvarious types and the total actual amount of investment was around UD$ 3.918 billion.
Amidst the total investment, US$ 3.868 billion or 98.7% was distributed in the
countries in a reducing order: Russia, Gabon, Laos, Guyana, New Zealand, Georgia,
Canada, Cambodia, Equatorial Guinea and France. Russia hosted most of theinvestment, amounting US$ 2.985 billion and accounting for 60.9% of the total
overseas investment by forestry enterprises. Gabon ranked the second, with anamount of US$ 289 million and 11.9% of the total. Laos hosted an investment of US$
169 million and 7.6% of the total. See the figure below.

70
60
50
40
30
20
10

Fr
an
ce

C
om
Eq
bo
ua
di
a
to
ria
lG
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ne
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an
ad
a
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eo
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ia
G

al
an
d
Ze

uy
an
a
N

ew

G

La
os

ab
on
G

R

us
si
a

0
Investment value (million US$)
Proportion (%)

Figure 2-8: Amount of overseas investment in forestry by Chinese enterprises (indifferent countries)
In regard to host regions, except for the remarkable dominance of Russia, Africaranked the second, hosting an investment of US$ 332 million and 8.5% of the total.
Additionally, US$ 208 million or 5.3% of the total was invested in Asia, US$ 164
million in South America, US$ 103 million in Oceania, US$ 77 million in Europe andUS$ 48 million, the least, was invested in North America. See the figure below.

91

Figure 2-9: Amount of overseas investment in forestry by Chinese enterprises (indifferent continents)
2.3.1.2 Invested industries
Among the 589 overseas forestry companies, 391 are engaged in forest logging andprimary processing of logs and sawn timber, accounting for 66.4%; 70 are forest tree
planters, accounting for 11.9%; 61 are furniture manufacturers, accounting for 10.4%,
and only 3 are engaged in technology research and development and transfer,representing 0.5%, the least.
2.3.1.3 Investment by provinces
The top ten investors running forestry companies abroad are Heilongjiang, Shandong,
Yunnan, Jiangsu, Jilin, Zhejiang, centrally-administered enterprises and the four
forest industry group corporations, Inner Mongolia, Guangdong and Liaoning, whose
overseas forestry companies add up to represent over 80% of the total number.
Heilongjiang is the province in China that owns the maximum forestry companies
abroad - 177 companies and 30.1% of the total. It is followed by Shandong Province,
which has 60 overseas forestry companies, representing 10.2%. Yunnan Province
has 42, accounting for 7.1%.
In regard to the amount of their investments, the top ten investors are Heilongjiang,
the centrally-administered enterprises and forest industry group corporations,
Shandong, Jilin, Guangdong, Jiangsu, Xinjiang, Hebei, Liaoning and Zhejiang, whohave invested a total amount of nearly US$ 4 billion, accounting for 99.0% of the total
overseas investment in forestry industry. Amongst them, Heilongjiang Province has
invested the most, i.e. US$ 2.531 billion, representing 64.6% of the total. It is followed
by Shandong Province, who has invested US$ 385 million, accounting for 9.8%. The
amount of investment contributed by the centrally-administered enterprises and forest
industry group corporations amounts US$ 354 million, representing 9.0% of the total.

922.3.1.4 Ownerships of invested companies
The majority of the 589 overseas forestry companies invested by China are privatecompanies, amounting 519 and accounting for 88.1% of the total; 38 are state-owned
companies, accounting for 6.5% and 32 are under other ownership (i.e. a
combination of state ownership and private ownership), representing 5.4%.
Among the 38 state-owned companies, 18 are centrally-administered enterprises,
representing the most, 8 are state-owned forest industrial enterprises and 12 arestate-owned enterprises of other types.
In regard to the amount of investment, private companies receive most of theinvestment, up to US$ 3.504 billion and accounting for 89.4% of the total investment.
US$ 414 million, or 11.6% of the total, was invested in state-owned companies.
The centrally-administered enterprises receive US$ 381 million, representing amajority, namely 92.0%, of the US$ 414 million invested in state-owned companies.
The state-owned enterprises of other types and the forest industrial enterprises
receive US$ 29 million and US$ 4 million respectively.
2.3.2 An Overview of Forestry Investment by Chinese Enterprises in Russia
Russia stands for a top choice when Chinese enterprises look for a country to invest
in forestry.
According to a questionnaire survey conducted by a Chinese organization, by the endof 2013, a total area of 17.93 million ha of forested land had been rented by 109
Chinese enterprises (there were 291 Chinese enterprises in Russia), accounting for41.3% of the total area of forested land purchased or rented by Chinese enterprises
abroad. The total forest stock volume on these forested lands amounted 1.12 billion
m3. The agreed annual harvest was 17.51 m3 while the actual annual harvest was
8.93 m3, and the agreed annual processing volume of logs was 4.72 million m3 while
the actual annual processing volume was 4.23 million m3. Preliminarily processed
products such as boards represented the majority of the products. The total agreed
investment or contract amount was US$ 2.58 billion while the actual amount ofinvestment was US$ 920 million. Assets owned by the overseas enterprises werevalued US$ 1.82 billion, and their annual revenue was US$ 1.13 billion. In total, 4,700
Chinese employees were sent abroad and a foreign staff of 9,500 were employed.
Most of the products were placed on the Chinese market, a certain amount of themwere sold in Russia and a small number of them were sold to Japan, Korea, etc.
(1) Investment by provinces93

In terms of the number of companies invested and run by Chinese enterprises in
Russia as well as the amount of their investment, the top three provinces investing in
Russian forestry in terms of investment value are Heilongjiang, Jilin and Shandong,
who have respectively established 184, 28 and 20 forestry companies in Russia
through investing US$ 2.4 billion, US$ 270 million and US$ 170 million. Although
Inner Mongolia also set up 22 forestry companies in Russia, there is no investment at
the moment. Four Chinese enterprises have invested over US$ 100 million separately,
amongst whom, Jiayin Yitong Timber Industry Co. Ltd., Heilongjiang Province, hasinvested the most in Russia, i.e. US$ 1.5 billion in total. See the figure below.

in
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ao
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Xi Zhe g
ji
nj
a
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rp
Si s
ch
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n
Sh
an
x
Ji i
an
gs
Be u
ij
in
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an
Hu
be
Qi i
ng
h
Sh ai
an
gh
Xi ai
nj
ia
ng

r

Mo

Ji
l

Ce
n

In
ne

He
i

lo
ng

ji
an

g

200
180
160
140
120
100
80
60
40
20
0

Figure 2-10: Number of companies in Russia investmed by Chinese enterprises(2) Product Classification
Among the 291 forestry companies established by China in Russia, the majority of
261 are engaged in sawn timber processing, accounting for 89.7%, 13 are furniture
manufacturers, representing 4.5%, and 6 manufacturing wooden products, 4
producing wood flooring, 3 producing plywood, 2 producing medium density
fiberboards (MDF), 1 producing veneers and 1 producing wood pellets.
2.3.3 An overview of forestry investment by Chinese enterprises in Africa
Africa is the second largest host, next to Russia, for investments in forestry by
Chinese enterprises.
Currently, there are 65 Chinese enterprises involved in forestry investment in Africa,
most of which are investing in Gabon (14), Nigeria (7), Zambia (7) and the Republic ofCongo (7). In addition, 4 enterprises are investing in Benin, three in Angola, 2 inAlgeria, Ethiopia, Equatorial Guinea, Democratic Republic of Congo, Ghana,
Zimbabwe, Cameroon, Kenya, South Africa and Uganda respectively, and 1 in Egypt,
Guinea, Liberia and Mozambique respectively.

94

In Africa, Gabon hosts the largest amount of investment, namely US$ 289 million,
accounting for 7.4% of the total overseas investment by forestry enterprises.
The primary timber processing usually includes forest logging and production of logs,
sawn timber and boards. There are 39 primary processing companies in Africa,
mainly distributed in Gabon (14), the Republic of Congo (6) and Zambia (4). Others
are run in Benin (3), Angola (2), Equatorial Guinea (2), Democratic Republic of Congo(2), Guinea (1), Cameroon (1), Liberia (1), Mozambique (1), South Africa (1) andNigeria (1).
In addition, currently there are 6 wood-based panel companies investing in plywood
production in Africa, including 3 in Nigeria, 1 in Uganda, 1 in Kenya and 1 in Ethiopia.
There are also 3 wood flooring manufacturers investing in Africa, i.e. 1 in Ethiopia,
Benin and Ghana respectively.
2.3.4 Overseas forestry investment policies of Government of China
The amount and scale of overseas investment in forestry by Chinese enterprises arestill relatively smaller than in other industries, especially such as in energy, minerals,etc., and most of the investors are private enterprises, whose investments arecharacterized by small scale and scattered distribution. Therefore, the forest sector
has not yet provided a key field for China’s overseas investment. For this, thegovernment has neither attached strategic importance to the overseas forestry
investment nor provided any particular preferential overseas investment policies forthe forest sector. Forestry is only involved in a few specific policy details, including theadjustments of import and export tariffs, export tax rebates, and so on.
In the case of imports, the reduction of import tariffs constitutes a main direction forthe policy implementation, in order to increase the imports of forestry resources andproducts.
In the case of exports, a turning point was marked in the year of 2009. Before 2009,
the reduction of export tax rebates provided the main means to restrict the exports ofdomestic timber resources. However, after 2009, the exports of domestic forest
products were hindered as a consequence of the global financial crisis, resulting inexcessive production. To cope with this, the government increased the export tax
rebates for forest products and issued preferential policies for processing trade toprovide export incentives for consuming the surplus products.
Policies directly in relation to overseas forestry investment principally are:
(1) A Guide on Sustainable Overseas Silviculture by Chinese Enterprises, issued
collaboratively by SFA and MOFCOM in August, 2007;95

(2) A Guide on Sustainable Overseas Forest Management and Utilization by ChineseEnterprises, issued collaboratively by SFA and MOFCOM in March, 2009; and(3) Cooperation Agreement on Development Finance in Support of Forestry
Development signed between SFA and China Development Bank in September,
2012, which aimed at enhancing robust credit support for enterprises to go global
and develop overseas forest resources.
2.3.5 Cases of overseas forestry investment by Chinese enterprises
2.3.5.1 Cases of forestry investment and cooperation underintergovernmental cooperation framework between China and Russia

theThe Memorandum of Understanding on Cooperative Exploitation and Sustainable
Utilization of Forest Resources in Far East Russia was signed between China andRussia during the fifth regular meeting between Chinese and Russian prime ministers
in November, 2000. So far, China and Russia have cooperatively implemented threephases of the general planning program under the MOU. A total investment of RMB
6.12 billion yuan in establishing 5 timber processing zones was planned in Phase
One; RMB 1.37 billion yuan in establishing 3 timber processing zones in Phase Two;and RMB 4.87 billion yuan in establishing 3 timber processing zones in Phase Three.
(1) The Phase One Project Implemented by Shandong Province
Shandong Province involved 13 enterprises in an introductory meeting of the Phase
One Project in 2007. Subsequently, the province organized relevant enterprises tocarry out field trips in Russia and meet with related Russian governmental
departments. It also organized a banker delegation to provide financing service forthe development and construction projects of the Phase One Planning.
In December 2008, the Sales Center of Yantai Economic & Technological
Development Area, Shandong Province and Hengda-Siberia Co. Ltd. registered ajoint venture in Russia named China-Russia Tomsk Industry and Trade Cooperation
Zone Development and Investment Co. Ltd. (changes took place in the shareholding
structure in 2011, from when Hengda-Siberia Co. Ltd. held 58.71%, AVIC Forestry Co.
Ltd. 40% and AVIC International Holding Corporation 1.29%, and the registeredcapital was 149 million yuan. The joint venture was in charge of the construction anddevelopment of the planned zone. By the end of 2012, a total of 14 enterprises were
established inside the zone, with an actual cumulative investment of US$ 227 million,
accounting for about 33% of the total investment in the construction project.
Yantai Northwest Forestry Co. Ltd. (hereinafter referred to as “Northwest Forestry”)
was established in YEDA in October 2003, with a registered capital of RMB 160
million yuan. One month later, Northwest Forestry acquired 100% of the shares heldby “Siberia Company”. AVIC Forestry Co. Ltd. (hereinafter referred to as “AVIC96

Forestry”) was reorganized from the former Northwest Forestry in July, 2011. The
registered capital was RMB 550 million yuan, which was controlled by AVIC
International Holding Corporation (52%, hereinafter referred to as “AVICInternational”), and other shares jointly held by Northwest Forestry (38%) and YEDA
Sales Center (10%). The forest assets owned by Northwest Forestry (which is a
private company) in Russia became accessible by AVIC International (which is astate-owned enterprise) through their cooperation. AVIC International started
exploiting and utilizing forest resources under the Phase One Planning of“China-Russia Cooperative Forest Resource Development” after it assumed controlof AVIC Forestry. In September 2013, AVIC Forestry received a credit support of
US$ 170 million from a Chinese bank for the construction and development project.
AVIC International provided the joint and several liability assurance and guarantee forfull amount and whole period during granting the credit for the project loan, whichsignificantly uplifted AVIC Forestry’s credit level and played an important role inaccelerating the fund-raising for the project.
(2) The Phase Two Project Implemented by Heilongjiang Province
China and Russia collaboratively organized an introductory meeting of the
China-Russia Intensive Timber Processing Cooperation Project on the 20th Harbin
International Economic and Trade Fair held in June 2009, introducing the elements of
the Phase Two Planning and the project to involved enterprises. Again, MOFCOM
organized the introductory meeting of the China-Russia Intensive Timber Processing
Cooperation Project during the China-Northeast Asia Expo held in September 2009 in
Changchun, Jilin, emphasizing the projects of both Phase One and Phase Two.
Based on the preparatory survey and arrangements by Heilongjiang Province, Russia
Xinchun Timber Industry Co. Ltd., Amur Timber Industry Co. Ltd. and Russia Naili
Timber Co. Ltd. were identified to execute the construction projects of three plannedzones separately. By the end of 2012, a total of 7 companies were settled in threezones, including Haihua Timber Co. Ltd., Shanghai Senda Timber Industry Co. Ltd.,Nature Flooring etc.
(3) The Phase Three Project to be Implemented by Shandong Province
The planned zone will be built on the foundation laid by Shandong Shunhe Timber
Industrial Co. Ltd., Yangxin Eurasia Group and other companies who are currently
engaged in logging and timber processing in Irkutsk Oblast.
In conclusion, the overseas investment zones planned by the government have laid asolid foundation and can provide robust service support for the overseas investment
for other Chinese enterprises. The cooperative forest resource development planning
between China and Russia plays an exemplary role for the overseas investment inforestry by Chinese private enterprises.

972.3.5.2 Cases of strategic partnerships initiated by enterprises
Various multi-stakeholder participatory strategic partnerships, bound by different
forms of contracts, have been established by enterprises. They help improving the
involved enterprises’ competence and lowering their risk during internationalization.
(1) A case of cooperation between a private company and a State-owned
enterprise
In regard to the current national circumstances, such mode serves as the mostvitalized pattern of overseas investment by Chinese private companies by helping
them solve the fund-raising issues.
Heilongjiang Baishanlin Timber Industry Co. Ltd. (hereinafter referred to BaishanlinCompany) works with Daxing’anling Forestry Group Corporation to implement aforest resource development project in Guyana, which provides an exemplary case ofsuch cooperation mode. Guyana is endowed with rich forest resources and has a
growing stock of 2 billion m3 and more than 30 high-quality tree species. Guyana
allows log exports and views forestry as one of the backbone industries. It also
actively encourages foreign investors to be involved in the development of its forest
resources. Baishanlin Company intends to implement a logging and processing
project with a planned capacity of 300,000 m3 timber of high-quality trees, and mostof its timber products will be supplied for the Chinese market. Established in 2009 asa private company of natural person holding at the very beginning, BaishanlinCompany is mainly engaged in timber processing and import & export trades and it
owns 440,000 ha of forest resources in Guyana. Its natural person shareholders havemore than 10 years’ business experience in Guyana and are well acquainted with theforest industry across the country. However, they are in sore need of large-amountand long-term financial support due to the capital shortage and high risks in carrying
on with the business, suggesting that the difficulty in raising funds has led to thebottleneck hindering the company’s further development. Established in 1963,
Daxing’anling Forestry Group Corporation is one of the four state-owned forest
industry enterprises. In the context of implementing the national logging ban, thegroup corporation longed for exertion of its advantages in capital, technology, talents
and credits to carry out “overseas investment” and utilize overseas forest resources,
but it is impeded by a serious lack of both experience in such investment and aplatform to perform it. Therefore, Daxing’anling Forestry Group Corporation andBaishanlin Company can be highly complementary to each other in terms of theiroperation philosophy, management models, interests and needs, etc.
Based on a comprehensive analysis of potentials, willingness and intentions in the
project cooperation between the two enterprises, coordinated and facilitated byfinancial institutions, Xing An International, the overseas investment company of
Daxing’anling Forestry Group Corporation signed the Agreement on Cooperative98

Forest Resource Development in Guyana with Baishanlin Company. According to theagreement, the natural person shareholders promise an annual project profit of noless than RMB 30 million yuan to the controlling shareholders of the debtor, which
mobilizes the participation of Daxing’anling Forestry Group Corporation into theproject. A withdrawal strategy has also been identified for Xing An International,
namely the natural person shareholders can acquire the shares held by Xing An
International based on the appraisal value of the assets earned by the project when
the cooperation ends. This ensures the due rights of the natural person shareholders
and arouses their enthusiasm in involving Xing An International in the project.
In early 2012, through Xing An International, its overseas investment company,
Daxing’anling Forestry Group Corporation acquired 51% of Baishanlin Company’s
shares and became the controlling shareholder. Baishanlin Company, as a privatecompany, has been benefitted by the cooperation with the state-owned enterprise inregularizing its business administration, professionalizing the logging crew, widening
the marketing channels for products, and effectively improving its overall strengths.
On the other hand, Daxing’anling Forestry Group Corporation found a resultful
approach to the “overseas investment” through becoming a shareholder of the privatecompany. Before its admission to Baishanlin, the debtor’s collateral security mainly
included its forested land resources in Guyana and the personal property of its natural
person shareholders, which were insufficient to cover the project loan risks. After its
admission, the China Development Bank facilitated Daxing’anling Forestry Group
Corporation to provide the joint and several liability assurance and guarantee for fullamount, which efficiently increased the project’s guaranty capability, avoided thepreviously existing country risks as well as the credit risks of the debtor and perfected
the crediting structure.
The above project provides a successful case of the cooperative development ofoverseas forest resources by a private company and a state-owned enterprise. The
highlight of the cooperation between the state-owned and private companies showsthat they can be complementary to each other, with the advantages of the large
state-owned forest enterprise in administration, technology, human resources andcredits, and those of the private company in deep comprehension of the hostcountry’s policies, laws and investment culture and its flexible operation which makes
the resources more easily accessible. Such complementation helps lowering the
project loan risks and guarantees the smooth project implementation. The main
characteristics include involving a state-owned company as a controlling shareholder
as well as a fundraiser for the project, who provides solid guaranty and thus helps
improve the integrated strengths of the debtor; prescribing the rights and obligationsof each of the two parties in an agreement, which mobilizes their maximum
enthusiasms in developing the cooperation; and making use of the valid guaranty
provided by the state-owned enterprise to tackle the project’s crediting structure
issues.

99

It should be noted that the Provisional Measures for Supervision and Administrationof Overseas Investment by Centrally Administered Enterprises (State-owned Assets
Supervision and Administration Commission of the State Council Order No.28), which
entered into force on May 1, 2012, prescribed that “in principle, acentrally-administered enterprise may not make any overseas investment which does
not belong to its principal business. Where a non-principal business investment is
indeed necessary for any particular reason, it shall be subject to the approval of the
SASAC.” The issuance of the Provisional Measures has restricted the bank loans
granted to private companies who involve centrally-administered enterprises
unrelated to forestry to get the loans. A current case is that China Chengtong
Holdings Group Ltd. intends to cooperate with a private enterprise in implementing anoverseas forestry investment project in Southeast Asia, however which is proceedingtardily due to the limitations of its principal business.
(2) A case of cooperation between private enterprises
Private enterprises can proceed with their overseas forestry investment incollaboration formed by the connections between the upstream and downstream
sectors along the industry chain or the complementarity in terms of technology orcapital.
The Baskovo Timber Industrial Zone planned in Jewish Autonomous Oblast during
the Phase Two of the General Planning for China-Russia Forestry Cooperation
emerged as an example of the cooperation between private enterprises. Heilongjiang
Xinchun Timber, as the project investor, entered the close collaboration with Haihua
Group. Xinchun Timber was in charge of renting forested lands surrounding the zone,
logging, transporting etc, while Haihua Group, as a participatory enterprise, wasuninvolved in controlling the upstream resources, and instead, directly purchased
timber resources from Xinchun Timber, processed them into flooring slabs and otherprimary products and then transported them back to China for further processing. At
the same time, Haihua has registered the trademark for Basskovo Flooring Company
in Russia and directly exports the products to Europe.
2.3.6 A case of successful overseas forestry investment by Chinese enterprises- Nature Home (China) Co. Ltd.
As a well-famed home furnishing company valued as the Merit Conservation
Supporter, Nature Home (China) Co. Ltd. strictly abides by the requirements towards
the legal source of forest resources and has created a new business model for thesustainable development of timber industry in collaboration with a number ofinternational organizations. Meanwhile, with its industry chain stretching abroad, theNature Home Company has been established in Peru. Since the beginning of its
establishment, in the spirit of green development, the company has been insisting on
responsible business and actively implementing the localized operation strategy ,100which has helped with the local social, economic and technological development andconsequently gained the recognition and support of the Peruvian government and its
people. In this way, to some extent, it helps turn around the embarrassment where
Chinese forest enterprises are often criticized internationally and creates a good
image for the Chinese forest sector and even the Peruvian forest sector who arepracticing lawful business operation.
As one of the initiators for the Initiative on Sustainable Overseas Forest Management
and Utilization by Chinese Enterprises, the Nature Home Company in Peru has beenrealizing the concept of sustainable development and it has created a path for green
development integrating the interests of the company and the local community in
combination with the reality in Peru. Its success has set up a good example forothers.
2.3.6.1 The attachment of importance to sustainable forest management laid
the cornerstone for the company’s overseas development
The Nature Home in Peru acquired the tenure of 295,000 ha forested land in Peru for
40 years according to the legal procedure. After acquiring the forested land, thecompany carried out field surveys to understand the distribution of its current forest
resources, stock volume, site conditions of the concessionaire, environment for
logging operation, haul roads and bridges and culverts. A long-term forest
management plan has been developed in light of local laws and regulations in Peru,
which sub-divides the concessionaire into 20-25 smaller stands, only one of which
can be logged each year, in order to accelerate the natural regeneration. An annual
operational plan are developed for the logging operations, which strictly implement
the cutting quota and do not cut the trees with diameter-at-breast-height (DBH)smaller than 60 cm (the DBH requirement varies among different species) as
provided in the forest law of Peru. Attention is paid to both utilization and restorationof forests. A number of seedlings of nursery plants of rare species are replanted on aperiodical basis after the cutting and artificial regeneration is applied to restore theforest resources in time. The forests possessed by the company in Peru either havepassed or are passing the FSC-FM certification and its downstream processing plants
and exporters own complete COC certification, so it is one of the few forest
enterprises in Peru who can directly export FSC certified products. The company
applies the FSC criteria to screen the qualifications of its suppliers and eliminate theunqualified ones. Processing consignments are accepted for log production andeffective supervision is provided in accordance with the management system ofmaterial sources, quality and logistics established by the company.
2.3.6.2 Intensive processing industry is proved to be an integral part for thecompany’s overseas development

101

The Nature Home in Peru attaches great importance to the whole industry chain. Witha total of 6 processing bases have been established or under construction and its
partner processors, the company owns a full and complete industry chain coveringfrom forest management, log sawing, board drying, ultra-violet paint, export offinished products to international marketing, and it produces solid timber flooring,
multi-layer solid timber composite flooring, commodity lumber, etc. The company has
an annual processing capacity of sawn timber of 25,000 m3, an annual drying
capacity of 20,000 m3 and an annual production capacity of flooring (painted flooring)of around 400,000 m2. In 2007, Peru’s then president, Alan Gabriel Ludwig García
Pérez visited the company, which was the only one enterprise capable of producing“Made in Peru” finished flooring products and selling them on USA market at that time.
The president highly complimented the company’s efforts which opened up a newphase for Peru’s forest product processing industry and contributed to the friendshipbetween China and Peru. Currently, using the overseas sales network of the Nature
Home (China) Co. Ltd., the company are selling its finished flooring products andpanels for outdoor uses in USA, Europe and South America and has preliminarily
formed a commercial pattern of being “originated in China, made in Peru and soldworldwide”. Most of its sawnwood are exported to China, supplying the domestic
production bases of Nature Home (China) Co. Ltd. with good-quality semi-finishedproducts. The company’s export volumes have been remaining among the top ten
within Peru’s forest industry in recent years.
2.3.6.3 Enhanced ecological environment protection provides importanceguarantee for the company’s overseas development
The Nature Home in Peru has been practicing scientific management, rational
utilization and lawful operation and actively participating in FSC certification. It strictly
abides by the forest law and regulations of Peru by adopting a series of measuresinvolving cutting quota, prohibition of cutting young trees, replanting after cutting,protection of water sources, and conservation of biological hotspots. It conserves
tropical rainforests and accelerates the natural forest regeneration wherever possible,
and within the concessionaire, it remains sufficient seed trees under good protection
and continuously reduces the cutting intensity in per unit area. The annual timberyield per hectare is rigidly restricted within the permitted range by Peru’s forest law.
Meanwhile, non-cutting conservation areas are specifically delineated in theconcessionaire, where a great deal of nursery plants of rare species are relented on aperiodical basis, ensuring the direct proportion between planting and cutting. The rare
wildlife protection is emphasized by establishing punishment clauses and supervisingon the implementation by its staff. Water protection is highlighted and buffer zones inproximity to water sources are defined. A complete forest fire prevention system has
been provided and needed equipment has been prepared to protect the forest
resources in accordance with the local regulations on forest fire.

102

2.3.6.4 The involvement in the development of local communities provides
support for the company’s overseas development
The Nature Home in Peru has been actively participating in aiding the local
communities, developing zero-carbon products and organizing various public benefit
activities for promoting environment protection. It has created a large number of
employment opportunities for the local communities and 95% of its staff are local
people. It also provides many jobs as well as skill training for local indigenous people
to help increase employments. The company invests in local infrastructure
construction to improve the traffic conditions, which not only helps solve its own
problems in transporting timber but also increases the convenience in local people’s
daily traffic. It also assist the local communities and people in solving some realdifficulties, e.g. by donating cars, electric generators, computers and stationery to
local people, to improve the school facilities and change the semi-primitive life style oflocal indigenous people. It gives robust support for the local forestry development, e.g.
through providing internships for local forestry universities, colleges and schools in
Peru, regularly holding football games to enrich the staff’s entertainment, supporting
local indigenous communities to participate in FSC forest certification by providing
funding, equipment and technology and helping ensure the stable channels for salesof FSC certified products to boost the local economic development.
The Nature Home in Peru has set up a successful example of sustainable overseas
development by Chinese enterprises, which helps other Chinese companies torecognize that the win-win relationship between sustainable economic growth andecological environment protection serves as a robust support for the company’s long
lifespan in surviving abroad and the experience in achieving such success shall be
widely shared. This is exactly the reason that SFA and MOFCOM jointly issued the
Guide on Sustainable Overseas Forest Management and Utilization by ChineseEnterprises, in order to reaffirm the principle and position in sustainable forest
management and win-win cooperation upheld by the Chinese government, as a
responsible large country, and also provide practical guidance for forest enterprises
investing abroad.

103

3. Illegal Logging Countermeasures Taken
by the Government of China

104

3. Illegal Logging Countermeasures Taken by the Governmentof China (Introduction of Forest Certification, Legality
Assurance Measures etc)
China, as a responsible large developing country and with firm determination, hasbeen committed to fighting against and combating illegal logging and associatedtrade, supporting the conservation of global forest resources, promoting sustainable
forest management and accelerating the facilitation of trade in forest products, either
at home or in its international forestry cooperation.
The Chinese government has been implementing related international conventions
and associated obligations all the time and also expects involved countries toenhance their administration of logging to eradicate illegal logging and trade of illegal
timber from the source.
3.1 Illegal Logging Countermeasures Taken by the Government of China
A two-tier system is adopted by the Chinese government to combat illegal logging
according the countries of origin, namely domestic timber and imported timber. Under
this system, accordingly, there are two sets of countermeasures separately specific todomestic and international aspects.
The domestic aspects can be further divided into two sub-aspects, namely theadministration of domestic forest resources, i.e., timber production, and theadministration of export and import trade (especially imports). Sections 3.1.1 and3.1.2 will discuss the two sub-aspects.
The international aspects are emphasized in this part and will be elaborated below
from section 3.1.3.
3.1.1 Enhanced administration of domestic forest resources to eradiate illegal
logging from the sources
Mature laws and regulations, strict regulatory regime and well-equipped law
enforcement teams are provided for forest resource administration in China. In
particular, a rigid ban on all types of commercial logging in natural forests is executed,
which effectively conserves the forest resources and almost completely avoids illegal
logging.

105

A sturdy framework for forest resource administration has been established andexecuted through legislation and regulation development, to ensure the legality oflogging, transportation, processing and utilization of timber and timber products within
China.
3.1.1.1 Law and regulation development
The Chinese government has formulated a series of laws and regulations, which
specifically prescribe the definition and scope of illegal logging and relevantmeasurements of penalty, to strengthen forest resource administration and prohibit
illegal logging practices.
The Forest Law stipulates that forest and tree logging shall apply for and be operated
subject to the “cutting permits” issued by forestry authorities, timber transporters shallhold “timber transportation permits” issued by forestry authorities, timber processors
shall hold “timber processing permits” issued by forestry authorities and traders oftimber and timber products shall hold export approvals and documentations
permitting imports and exports. It also provided that the exports of rare species andtheir products and derivatives shall be prohibited and restricted. Any violations, suchas illegal logging and destruction of rare species, will be investigated for criminal
responsibilities according to the law.
The Regulations for the Implementation of Forest Law prescribes the economic
penalties, while the Criminal Law provides detailed criminal punishments, and theInterpretation of the Supreme People's Court on the Relevant Issues concerning theApplication of Law in the Trial of Criminal Cases of Destructing Forestland Resources
defines the justifications for criminal punishments against illegal logging, such as
tress species, amount, etc., and corresponding accusations and punishments.
As a result, in China, all steps from logging, transportation, processing and imports
and exports of timber and timber products are strictly regulated by a full set ofwell-developed laws and regulations. Any serious violation of these regulations will be
investigated for criminal punishments.
The three-permit system (namely cutting permit, transportation permit and processing
permit) provides the most effective administrative approach to manage the forest
resources and address illegal logging issues in China. In combination with theadministration systems of cutting quota, after-logging regeneration and annual timber
production planning, and well equipped with the full-fledged law enforcement
institutions and enhanced law enforcement, altogether they efficiently guarantee thereasonable and sustainable utilization of forest resources and almost eradicate theoccurrence of illegal logging from the source.

106

The table below describes the specific practices in relation to timber cutting permits,
timber transportation permits and timber processing permits.
Table 3-1: Three permits mechanism of logging
PermitCondition

Procedure
Logging

Timeline

Timber Cutting(1) The applicant shall be the(1)

Permits

owner or operator of the forest;

individual applies to the local

accepting(2) The forest in application forforestry authorities;

application

logging shall meet the provisions(2) The local forestry authorities

will be made in 7

in Article 31 of the Forest Law;

investigates the application andworking days sinceandsubmits

the receipt of the(3) None of the situations

forestryprescribed in Article 31 of theapproval; andRegulations for the(3) The county-level forestry

Implementation of Forest Law

authorities

happens.

organization issues the timbertocompany

thecounty-levelauthorities

or

or

its

after

Decision on whether
the
or

not

application.

authorized

cutting permit to the applicant
when the application is deemedtobequalified,otherwise,

notifies the applicant with an
explanation

about

why

the

application is unqualified andinforms the applicant about the
right

to

apply

for

an

administrative review or file alawsuit.
Timber(1) Holding a timber cutting

Submitted

byanTransportation

permit;applicant,Permits(2) Holding a customs declaration

application will be transacted,

form and an in-county timber

while the unqualified will betransportation permit;

returned with an explanation of(3) Holding a timber processing

the reasons.

theindividual

3 daysqualifiedpermit;(4) Having invoices of related
taxes and fees; and(5) Holding the proof document
issuedbyatownship-level

forestry station about the validity
extension and/or transfer.
Timber

The applicant shall:

The applicant applies to theDecision on whether

Processing(1) be independently accounting,county-level forestry authorities

accepting

Permits

self-financing and capable ofandapplication

bearing civil liability;

documents.

(2)

forestryownsawell-developed

107

submits

required

the
or

not

The

county-level

will be made in 20

authorities

examinesworking days sincefinancial department and a soundandfinancial management system;

qualifications and the submitted(3) possesses a fixed place anddocuments and decides whether

facilities matching its processing

thebusiness scope;transacted,

based(4) owns a registered capitalauthorities’

matching its processing businesshow many timber processors are

scale; andneeded within its jurisdiction

(5)

meets

other

conditions

verifies

theapplicant’s

application

will

be

on

the

determinationon

the receipt of theapplication.

when taking into account theprovided in related laws andcurrent

statusregulations.

resources, commercial timber
cutting

quota

of

its

and

forestmarketdemands.

The cutting quota system: Article 29 of the Forest Law provides that the State strictly
controls the annual rate of forest felling in accordance with the principle that the rateof consumption is lower than the rate of growth. Annual quotas for felling shall beworked out by state-owned forestry enterprises and institutions, farms, factories andmines as units with respect to the state-owned forests and timber and by counties asunits with respect to collective-owned forests and timber and individually-owned
timber which shall be collected and consolidated by the competent departments offorestry of the provinces, autonomous regions and municipalities directly under theCentral Government and submitted to the State Council for approval upon
examination and verification by people's governments at the corresponding level.
3.1.1.2 Establishment of law enforcement agencies
Aiming at the thorough practical implementation of the Forest Law and related laws
and regulations and the suppression of illegal logging, the State Forestry
Administration (SFA) set up the Forestry Public Security Bureau to supervise theforestry administrative law enforcement by forest public security offices at different
levels across China, coordinate and organize the unified operations and special
campaigns for law enforcement against violations and crimes in destructing forests
and wild animal resources, inspect and investigate the serious cases where forest
resources and wild animals under national priority protection are destructed, andoversee the integrated security control in forest areas. Forestry authorities and public
security organs at different levels also establish forestry public security offices orforest police stations to take care of specific affairs in their jurisdictions to combat any
illegal activity in relation to forests. Meanwhile, as the grass-root law enforcement
units, the timber checkpoints, which are subordinated to the local forestry authorities
at various levels and supervised by forestry authorities at county-level or above,check required documents for transported timber, seize the illegally logged timber
and assist the forestry public security offices in uncovering serious cases.

1083.1.2 Strengthened administration of timber import and export trade to avoid
trade in illegal timber
3.1.2.1 Law and regulation development
As part of the merchandise trade, timber trade is also applicable in all related laws
and regulations. Requirements towards timber trade are provided in many laws andregulations such as the Foreign Trade Law, the Customs Law, the Law on Import andExport Commodity Inspection, the Forest Law, the Regulation on Administration ofImport and Export of Goods, etc. Generally speaking, these requirements are
particularly prescribed specific to timber characteristics, e.g. only including theinspection and quarantine of plants and animals, the species enlisted in the CITES
Appendix I in a prohibition of commercial trade and those in prohibition of trade asprovided by domestic laws and regulations, but do not raise the threshold against
business operation in any respect.
To cope with the international trends in trade liberalization and facilitation, conditions
to get the permission for timber trade business have been greatly relaxed, i.e. allenterprises holding a foreign trade business license can operate timber trade.
3.1.2.2 Strengthened law enforcement
The General Administration of Customs (GACC) is a border agency supervisinginbound and overseas activities including the import and export trade, which applies a
3-level organizational structure. The General Administration of Customs lies on the
top level; has Guangdong Sub-Administration of Customs, 2 supervising offices thatare located in Tianjin and Shanghai respectively and 41 Customs Districts at the
middle level; and 562 local Customs houses and offices at the bottom level. It has astaff force of around 50,000 (including Customs anti-smuggling police).
The performance and capability of China Customs’ law enforcement and its
administration have been internationally acknowledged. It sets up anti-smuggling
bureaus at all the three levels, whose staff are working as anti-smuggling police, partof police force, with strong deterrent power and good enforcement efficiency.
Regarding timber import and export trade, SFA, as the central forestry authorities,
has been working closely with the Customs and the counterpart departments incharge of inspection and quarantine for imports and exports to supervise the importsof timber and timber products.
China is both the second largest economy and the second largest trading country in
the world. In general, thanks to the existing well-developed laws and regulations andtheir strict enforcement, the import and export trade of all goods including timber
conducted by China are well regulated and related statistics of such trade are of high109

accuracy. The illegal trade including in timber have been dramatically reduced
especially through adopting stern measures in fighting against smuggling.

The Chinese government has been holding a consistent and explicit attitude towards
illegal logging. On one hand, it firmly combats and eradicates illegal logging at home;on the other hand, it actively supports the international community and continuously
strengthens international cooperation in cracking down on illegal logging in othercountries, and meanwhile, adopts concrete measures to guide the Chinese timberindustry enterprises to get adaptive to the requirements of international community
towards the legality of timber and timber products.
The Chinese forestry authorities put forward the following 7 principles to manifest theattitude and achievements of the Chinese government on combating illegal logging,which is shown in the following box.
Box 3-1: Seven principles of combating illegal logging of China
(1)
(2)
(3)
(4)
(5)
(6)
(7)

Nation sovereignty;
Leadership of the government;
Pursuit of sustainable forest management;
Protecting the normal international trade;
Global collaboration;
Science-based definition, evaluation and reporting; andCommunity participation.

3.1.3 Timely amendments of laws, regulations and policies
The Chinese government pays high attention to illegal logging and has been
considering the stipulation of relevant requirements in laws and regulation to regulate
related practices.
Undoubtedly, the amendment of laws and regulations requires a time-consuming andcomplex process and cannot be finished immediately. It is fortunate that the Chinese
governmental departments and related research and education organizations havebeen studying and discussing on the necessity and feasibility in revising the relevantlaws and regulations, and a preliminary timeframe has been worked out roughly.
3.1.3.1 Law amendment
For a long run, the Forest Law and other related laws may be revised whennecessary to include the prohibition of illegal logging into the legislation.
110

In fact the Forest Law is in a process of amendment. However, according to thecurrent exposure draft, the explicit description of “prohibiting illegal logging” has not
yet been included, and thus efforts are needed to have its inclusion in the law’s next
amendment. It requires a long process to include the illegal logging into the Forest
Law.
3.1.3.2 Regulation modification
Voices asking for timely modification to related regulations and inclusion of combatingillegal logging have been heard.
It is easier to revise a regulation than amending a law, and thus a medium-term goalof regulation modification may be attained.
3.1.3.3 Policy revision
Many voices asking for timely revision to related policies or department rules andinclusion of combating illegal logging have been heard.
Revision of policies and department rules is even much easier than the amendmentof laws and regulations, so it can be viewed as a short-term goal.
3.1.4 Strict implementation of CITESWith high attention paid to and serious implementation of CITES, the government
enhances the import administration of timber of endangered species.
The Endangered Species Import and Export Management Office of China is working
with GACC to strengthen the import administration of timber of endangered species,in order to fulfill the international obligations and assist producing countries insustainable utilization of timber resources. When approving the administrative permit
for timber imports, the office examines and verifies the applications strictly in line with
the Commodity Appendix of Import & Export on Wild Fauna and Flora and avoids
issuance of any administrative license using HS code for species excluded in the
China National Hongmu (rose wood) Standard. The office also enhances its
cooperation with the Customs in classifying, identifying and inspecting imported
timber commodities. With an emphasis on Hongmu (rose wood) imports in the
on-spot supervision and inspection, the supervision on administrative licensing fortimber imports has been strengthened and the surveillance and inspection on
endangered species in key ports have been reinforced to assist in the law
enforcement by enforcement and administration departments. Services are provided
for enterprise, by timely informing them about the changes of timber species and theadjustments of policies about imports through internet, meetings, trainings and so on.
111

The serial Operation COBRA has been adopted in collaboration with dozens ofcountries and international organizations including USA, which effectively suppressed
the high incidence of wildlife and forest crimes.
3.1.5 Establishment of cooperation mechanisms
Combating illegal logging calls for concerted efforts by all stakeholder departments.
SFA is devoted to establish various cooperation mechanisms to crack down on illegal
logging and associated trade, and under efforts made, an inter-departmental
mechanism has been built to plan, decide on, coordinate and arrange related actions.
A multi-departmental administration system for imports and exports of timber andtimber products, involving the Ministry of Commerce (MOFCOM), the Customs, SFA,
etc., has been formed to achieve the collaborative synergy in combating illegal
logging. A five-in-one interactive cooperation mechanism, involving the governmental
authorities, research organizations, industry associations, enterprises and legal
assistance, has been established, under which international exchanges areencouraged, policy consultancy is provided and the green procurement is initiated.
3.1.6 Enhanced guidance and services to increase enterprises’ consciousnessof self-discipline and responsibility during practicing overseas investment
The number of Chinese enterprises involved in overseas forestry investment has
been on the rise continuously in recent years. A few of these enterprises do not abideby the laws and regulations of the host countries and thus caused a negative image
about China.
In such context, the Chinese government has been alerted and consequently
adopted a series of measures to instruct and guide Chinese companies to respect thelaws and regulations of the host countries.
SFA and MOFCOM jointly issued a Guide on Sustainable Overseas Silviculture by
Chinese Enterprises in August, 2007.
In March 2009, SFA and MOFCOM jointly issued another document named a Guide
on Sustainable Overseas Forest Management and Utilization by Chinese Enterprises.
As the former guider, again, it provides management and technical codes forpracticing forestry operations abroad by Chinese enterprises and further
demonstrates China’s determination and efforts in contributing to the global
sustainable forest management. Actively encouraging stakeholder companies toimplement the guides, the government has organized trainings on how to implement
the guides for Chinese-funded companies based in Russia, Indonesia, Gabon, Papua
New Guinea, Guyana and other countries, where pilots have also been developed. Ina step-by-step approach, the implementation will be included into the performance112appraisal and supervision provided by the government towards companies on theirforest management and utilization abroad. With the guides, Chinese enterprises are
directed to abide by laws and regulations of host countries and respect international
conventions during their silviculture, logging and processing activities in foreigncountries, which will help to regulate the companies’ overseas investment behaviours
and work out a win-win cooperation mode taking into account the local sustainablesocial, economic and environmental development.
In addition, a Guide on Sustainable Overseas Trade and Investment in Forest
Products by Chinese Enterprises has also been drafted and it is probable that it will
be jointly issued by SFA and MOFCOM soon.
The three guides will play an increasingly important role in further regulating theoverseas forestry investment conducts by Chinese enterprises, and from analternative angle, will help gradually reduce illegal logging in developing countries.
3.1.7 Enhanced organizing and guidance to improve Chinese enterprises’
capacity in meeting international requirements of timber legality
The successive implementation of the EU Timber Regulation (EUTR) and the Lacey
Act of USA has brought about challenges to the overseas timber processing
enterprises of China. Meanwhile to encouraging the enterprises to improve their
management, the governmental departments are also enhancing the provision ofnecessary services, i.e. through organizing and initiating a series of trainings toincrease the domestic companies’ capacity in meeting the international requirementsof timber legality. They include:
2. Trainings directly organized by the government, some of which are funded by thestate revenue and some are funded by multiple stakeholders;
3. Trainings organized by forest research and education organization as entrusted
by the government, some of which are funded by the state revenue and some are
funded by multiple stakeholders;
4. Trainings organized by forest industry associations as entrusted by thegovernment, most of which are funded by multiple stakeholders; and5. Trainings provided by Chinese and international NGOs, most of whose funds areraised by the NGOs.
Competent staffers from governmental departments are often invited to give lectureson these trainings, introducing laws, regulations and policies on China’s forest
resource administration, timber processing and utilization, trade and investment inforestry, etc. It helps Chinese companies to improve their own management andadapt to the international requirements of timber legality.

113

The governmental departments (including industry associations) are also resorting toresearch and education organizations for their technical support to cope with illegal
logging, e.g. through helping companies to strengthen their supply chain
management and R&D on tracing technology, providing simple and practicabletechnical guides (including technical systems of various approaches and measures),developing nation-specific guides on legal timber procurement based on analysis ofdifferent countries’ laws and regulations on timber production, transportation andprocessing with emphases on EU Timber Regulation and the Lacey Act, andproviding technical consultancy and service for companies to help them satisfy theinternational market’s demands of legal timber.
3.1.8 On-going establishment of China’s Timber Legality Verification System
For years, a number of Chinese organizations, including research and education
organizations and forest industry associations, have been studying on theestablishment of a timber legality verification system. Some of them put forward many
constructive suggestions for the system establishment, including an assurance
system and criteria built by an industry association as the second party, and thosebuilt by the enterprise as the first party on its own. Extensive communications andexchanges on these systems and criteria, which are deemed to be possible technicalcodes, have been carried out with major timber producing countries and consuming
countries.
3.1.8.1 The pilot phase
Based on the research findings of the project “Timber Legality Verification Schemes”
funded by the Department for International Development (DFID) of UK and executedby the Chinese Academy of Forestry (CAF), the China National Forest Products
Industry Association (CNFPIA) launched a pilot Timber Legality Verification Standard
in November 2012. It also unveiled its timber legality verification pilots by releasing
relevant notices and the matching pilot Rules for Implementation of the Timber
Legality Verification Standard, the pilot Self-discipline Agreement of China Timber
Processing Industry on Applying Legal Timber and the pilot Regulations on
Procedures, Labelling and Licensing for Timber Legality Verification in China. Up todate, a total of 13 companies have obtained the timber legality certificates issued by
CNFPIA and some other companies are still undergoing the verification process.
It is still in the pilot phase which is started by CNFPIA as an industry association only,
but it has provided a technical code for verifying timber legality in Chin and thus has
valuable significance.
3.1.8.2 The promotion phase114

A reform of standardization is in process in China. Currently, the Chinese standards
can be classified into two categories and six sub-categories, among which, the six
sub-categories dominated by the government are now streamlined to four
sub-categories, namely the compulsory national standards, recommended national
standards, recommended industrial standards and recommended local standards,
while the standards independently developed by the market consist of group
standards and company standards.
In such a context, SFA is coordinating and integrating the efforts made by industry
associations and research and education organizations to establish amutually-recognition approach of timber legality, which can satisfy various
stakeholders’ interests and meet related requirements, and provide an official group
standard for the Timber Legality Verification Standard, in order to ensure the legalityof timber sources. A recommended group standard is hopeful to be provided throughthe on-going action.
3.1.8.3 Processes of due diligence and timber legality verification
EU Timber Regulation requires the countries, who have not signed the VoluntaryPartnership Agreements (VPAs), to fulfill the due diligence when they are exporting
forest products to EU states.
8. First-party assurance
Many Chinese enterprises are now carrying out the due diligence on their own, andsome of them have established their own due diligence system to meet the EU
requirements.
9. Second-party assurance
As above, the Timber Legality Verification Standard launched by CNFPIA is still in its
pilot phase and only 13 companies have obtained the certificates. It can be said thatthe second-party assurance system has not yet been built. However, the governmentis integrating efforts made by industry associations and research and education
organizations to develop a group standard for the timber legality verification in China,
and thus the second-party system will be provided by then with its completion.
10. Third-party certification
Numerous third-party certifiers or verifiers have been working on the timber legality
verification in China, including SGS, BV and NEPCon who have been accredited by
EU Timber Regulation mechanism and SCS who is coping with the Amendments to
the Lacey Act of USA. They either adapt the timber legality verification standards

115already built by the certifiers or verifiers to the national circumstances of China, or
help Chinese companies establish their own due diligence systems.
Usually, these certifiers or verifiers do not issue any certificate even after completingthe timber legality verification process, nor label on the products. Instead, they
provide relevant statements, which can satisfy the requirements provided by EU
Timber Regulation or the Lacey Act towards the timber legality or low risks.
3.1.9 Establishing and improving China Forest Certification Scheme
Currently, China has already established China Forest Certification Scheme which is
progressing well. In February 2014, China Forest Certification Scheme was endorsed
by PEFC.
Currently, China Forest Certification Scheme has a total of 25 standards, among
which, “Forest certification in China --- Forest management” and “Forest certificationin China --- Chain of custody” are national standards, while the other 23 are forestry
sector standards.
The national certification standard of “Forest certification in China - Chain of custody(GB/T 28952-2012)” released in 2012 was developed based on PEFC International
Standard of “Chain of Custody of Forest Based Products - Requirements (PEFC ST
2002:2010)”, which already included requirements for due diligence in response toillegal logging, but not fully perfect.
In order to tackle illegal logging, especially in response to EU Timber Regulation,
PEFC adopted a new “Chain of Custody of Forest Based Products - Requirements” in
2013.
In order to keep China Forest Certification Scheme in a sustainable line withinternational practices, CFCC is now revising the national certification standard of“Forest certification in China - Chain of custody”, so as to ensure to be in consistency
with PEFC new “Chain of Custody of Forest Based Products - Requirements”
adopted in 2013, which already meets relevant requirement by EU Timber Regulation.
Currently, the process of the revision of this national standard is around the end, andthe expert assessment meeting over the draft of the revised standard was held in
Beijing on December 19, 2016, and the new standard is expected to be issued in thefirst half of 2017 after final revision and improvement.
The currently being revised national standard of “Forest certification in China - Chainof custody” especially enhances the due diligence system (DDS), and requires that all
raw materials entered into chain of custody process in the certified company must
implement DDS, and at the same time increases the benchmark of risk assessment
so as to keep full consistency with DDS requirements set by EU Timber Regulation. It
116can be concluded that all timber products certified by the new chain of custody
standard will naturally meet requirements of low risk category of risk assessment for
timber legality set by EU Timber Regulation, thus naturally can smoothly be enteredinto EU market.
Currently, there is a voice in China, and also in some other countries, which needs tobe paid with attention: Forest certification is an effective market based instrument topromote sustainable forest management, and is conducted by an independent third
party to verify both the legality of the sources of timber and the sustainability of the
management of forests which produce such timber. However, due to various reasons,
not all companies can meet requirements in a very high standard of sustainability, sojust to ensure the legality of sources of timber as a basic requirement is the first
choice by most companies. And the DDS in the upcoming new national standard ofchain of custody certification can be taken as an independent standard or basis toverify the timber legality, also with technical feasibility and practical operationality.
Especially, this new national standard of chain of custody certification will be issued
by the government through the Standardization Administration of China (SAC), tosome extent of significance, it is also one of concrete measures for the Governmentof China in response to illegal logging.
In addition, the Chinese government departments are also contiuously improving
China’s government green procurement policy system, and emphasize in prioritizing
to and forcing to purchase the verified and lebaled legal timber products and certified
timber products, and encourage companies to use legally sourced timber.
3.1.10 Implementation of government green procurement policy
According to the Government Procurement Law, the Chinese government formulated
the Government Green Procurement Policy, and stated that the policy
implementation would start in central and provincial budgetary units (including
municipalities with independent planning status) from January 1, 2007 and then be
extended nationwide from January 1, 2008. Timber products included in the directory
listing for the policy are furniture, timber-based panels, construction materials, paper
products, etc. The technical standards of some timber products amongst themactually have demanded that the raw timber materials used in these products shall becertified to be from sustainably managed forests. Another voice, asking for adding thelegality verification for timber sources in addition to modifying these technicalstandards about SFM certified timber, has been heard (but has not yet been
adopted).
Moreover, the Guiding Principle on Accelerating Forest Certification of SFA wasissued on September 16, 2010, which stated that “certified forest products shall be
included into the directory of government procurement and their proportion in the
procurement shall be increased step by step” (it will be further detailed in section 3.2).
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Regarding the large amount in China’s government procurement, the implementationof green procurement will play as a robust leverage, which will promote thedevelopment of green industry and help form a market of green consumption. It also
serves an effective approach to establish a good image of the government inprotecting the ecological environment and initiating an environment-friendly society.
As a large consumer of timber, the government procurement of timber and timber
products has great effects on suppliers and also affects the consumption preferenceof other timber consumers, which composes a powerful measure to boycott the illegal
logging and associated trade.
Besides, the competent Chinese governmental departments are exploring on the“green credit policy”, which may include the legality or sustainability of the applicant’s
timber sourcing as part of the conditions to get loans.
3.1.11 Active participation into international cooperation
The Chinese government pays high attention to illegal logging and China, as animportant base for producing, processing and trading forest products in the world, has
maintained a consistent and affirmative attitude towards combating illegal logging andassociated trade. China is willing to cooperate with the international community tomake more contributions to pursuing the global sustainable forest management,enhancing the protection of global forest resources and safeguarding the normal
order of trade in legal forest products.
An all-around and multi-dimension international cooperation pattern at multilateral,
regional and bilateral levels has been formed.
3.1.11.1 Multilateral cooperation(1) Involvement in FLEG process
The Chinese government has participated in the process of Forest Law Enforcement
and Governance (FLEG) since the early 21st Century, specifically taking part in two of
the three conferences regarding regional process, namely the East Asia Ministerial
Conference on FLEG held in Bali, Indonesia in September 2001, and the Europe andNorth Asia Ministerial Conference on FLEG held in St. Petersburg, Russia in 2005.
(2) Involvement in APEC process
The First APEC Meeting of Ministers Responsible for Forestry was held in Beijing,
China in September 2011. The Beijing Forestry Declaration passed on the meeting
initiates “to combat illegal logging, promote trade in legally logged forest products andenhance the capacity building in this regard through the APEC’s Expert Group”.
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As a member of APEC, China has been playing an active role in the APEC’s Expert
Group on Illegal Logging and Associated Trade (APEC-EGILAT), i.e. it attended all
the ten APEC-EGILAT meetings held during the five years from 2012-2016, hosted
two of these meeting in 2014, and provided many valuable inputs and suggestions forvarious thematic considerations such as the initiative in establishing an in-region
mutual-recognition scheme of timber legality.
The consensus on adopting the Timber Legality Guidance Template by APEC
economies was reached on the 8th EGILAT Meeting held in the Philippines in August
2015, which laid a foundation for the actions to be taken to combat illegal logging andassociated trade and promote trade in legal forest products.
(3) Project cooperation with ITTO
China is the largest and most important member state of the International Tropical
Timber Organization (ITTO), and the latter has developed a specific plan to help its
member states to cope with illegal logging issues.
CAF has implemented two projects in this regard, which are “Equipping Small andMedium Sized Forestry Enterprises in China for Procurement of Tropical Timber from
Legal and Sustainably Managed Forests” executed in 2011-2014 and “Supporting
SMEs and Importers of Tropical Timber for Better Understanding of CITES and theNeed to Comply with CITES Rules in China” executed on 2015-2017. The project
implementation reflected the close international cooperation in combating illegal
logging by China.
11. Cooperation with APFNet
The Asia-Pacific Network for Sustainable Forest Management and Rehabilitation,
APFNet for short, initiated and founded by China, aims at accelerating the forest
restoration in Asia-Pacific and improving the sustainable forest management in theregion through pilot and demonstration projects, capacity building, information
sharing and policy dialogues. It has 31 member economies and internationalorganizations and is an active international organization in its virtue in the region.
APFNet also pays high attention to illegal logging and thus has carried out a numberof related activities. For example, it organized a training workshop entitled “Enhancing
Forest Governance for Asia and the Pacific in the Context of Timber Legality
Verification” in collaboration with CAF in 2015, in which 16 participants from 10 APEC
economies took part.
3.1.11.2 Bilateral cooperation

119(1) Cooperation with EU
EU, as a union of states, is playing the most active role in combating illegal logging
and associated trade, with the masterpiece of FLEGT (Forest Law Enforcement,
Governance and Trade) process presented.
China and EU agreed on the China-EU Summit Joint Statement on the 8th Summit
Meeting held in Beijing in September 2005. In the Statement, both sides agreed to“cooperate in combating the illegal logging in Asia”. On September 9, 2007, Wen
Jiabao, Premier of the State Council of China, attended the 9th China-EU Leaders’Meeting held in Helsinki, Finland, which adopted a Joint Statement that stated theleaders of both sides agreed to strengthen cooperation in curbing illegal logging andto make significant contribution to the conservation of natural resources.
To practically implement the elements on curbing illegal logging in the Joint
Statement, SFA, in collaboration with EU, held the International Conference on Forest
Law Enforcement and Governance in Beijing on 19-20 September 2007, withparticipation by more than 200 participants from 27 countries and over 30
international organizations.
In 2009, during Premier Wen Jiabao’s visit to EU, SFA established the Bilateral
Coordination Mechanism (BCM) on Forest Law Enforcement and Governance with
the Directorate-General for Environment of EU, agreed that a regular meeting would
be held every year to discuss on the cooperation in combating illegal logging. Up todate, both sides have held seven consultative meetings and carried out policy
dialogues, information sharing, capacity building, and company exchanges under the
BCM, which are jointly designed and organized by the Research Institute of Forestry
Policy and Information of CAF and the European Forest Institute (EFI). These
activities help deepen the Chinese side’s understanding about the EU Timber
Regulation and the FLEGT initiative and also timely inform the European side about
the points focused by the Chinese side. The annual regular meeting of BCM also
invites representatives from industry associations such as the CNFPIA.
In spite of many cooperation activities in combating illegal logging conducted by
China and EU, no agreement has been reached by both sides on the signatory of
VPA.
(2) Cooperation with the United States
China and the United States, the world’s two top countries in terms of their forest
resources, timber production, consumption and imports and exports, have attracted
the international community’s focus in regard to combating illegal logging andassociated trade. The illegal logging has been included into the bilateral strategic
economic dialogue since the second dialogue in 2007, in order to demonstrate to the120international community their determination and efforts in combating illegal logging
and associated trade.
In May 2008, China and USA signed the China-US MOU on Combating Illegal
Logging and Associated Trade and established a bilateral forum in this regard. Bothsides have been cooperating in a practical way in four aspects. Firstly, they havebeen working together in reaching a common understanding about “illegal logging” toserve for the fight against illegal logging and associated trade and identifying thepriorities for the cooperation, e.g. including the improvement of forest law
enforcement and governance, information sharing, etc. Secondly, they are working
together in increasing the transparency of timber market to encourage the trade andutilization of legal sourced timber and timber products while suppressing those ofillegal timber and timber products. Thirdly, they are working in establishing an
information sharing mechanism, covering the efforts made to promote trade in legallysourced timber and timber products and information about relevant countries’ laws.
Fourthly, they are discussing on the roles, responsibilities and obligations of public
sector, industry association and enterprises in combating illegal logging andassociated trade.
Both sides have held seven meetings since the establishment of the bilateral forum
on combating illegal logging and associated trade, among which the 7th forum washeld on November 1 in Washington. On the meeting, both sides reported theprogresses achieved on illegal logging and associated trade since the 6th forum aswell as the collaboration with other countries and organizations, exchanged
viewpoints on sharing customs data, developing and implementing legislative andregulatory frameworks, participation of private sector and civil groups and otherrelevant topics, and discussed on the fields of priorities for cooperation. Dialogues
with private sector and civil groups were also held jointly by both sides.
Representatives from International Timber Products Association, The Nature
Conservancy (TNC), Forest Trends and other international NGOs also attended the
dialogue.
In addition, both sides carried out bilateral exchanges on a non-regular basis,including jointly organizing international workshops. In particular, after the issuance of
the Lacey Act, both sides have held a number of various symposia and workshops onillegal logging and how to adapt to the Act.
(3) Cooperation with the United Kingdom
The United Kingdom (UK) is one of the most active EU countries in combating illegal
logging. Governments of China and UK have been extending their collaboration andexchange in this regard. Every year, Chinese experts will attend the annual Illegal
Logging and Stakeholder Update Meeting hosted by the Chatham House.

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The China-UK cooperative projects “Timber Legality Verification Schemes” and“International Forestry Investment and Trade” are funded by the Department forInternational Development (DFID) of UK and executed by China. The former project
has been completed, through implementation of which numerous constructive inputs
and suggestions have been proposed. The latter one is still on-going.
In addition, China and UK have organized many international workshops on illegal
logging in collaboration between them or even with other organizations.
(4) Cooperation with Indonesia
SFA signed a Memorandum of Understanding (MOU) on Forestry Cooperation with
the Ministry of Forestry of Indonesia in 2002. The difference of this MOU from theagreement signed between the two parties in 1992 lies in that it adds new elements
including the cooperation in combating trade in illegal forest products.
(5) Cooperation with Australia
Australia is the third country in the world, next to USA and EU, which determines tocombat illegal logging in the form of legislation through issuing the Illegal Logging
Prohibition Act.
In 2009, China and Australia signed the Memorandum of Understanding on
Combating Illegal Logging and Associated Trade and Supporting Sustainable Forest
Management. The two parties have also established a meeting mechanism of thebilateral forestry working group on a regular basis and illegal logging has been
included into its discussion in recent years. The most recent 11th Meeting ofChina-Australia Forestry Working Group and the 3rd Meeting on Combating Illegal
Logging and Associated Trade was held in Canberra, Australia on March 22, 2016.
China and Australia agreed to finalize and promulgate their respective national guides
on timber legality as soon as possible to provide service for enterprises, aiming at
guiding both Chinese and Australian enterprises to implement investment and trade
in a legal and well-regulated way in the opposite country and thus promoting thesustainable development of both sides’ trade in forest products.
(6) Cooperation with Japan
Recently, Japan has been intensely advocated the “Act on Promotion of Distribution
and Use of Legally Logged Timber Products to Prevent Global Warming”, which is
hopefully to be passed by the National Diet of Japan soon.
China and Japan signed the Memorandum of Understanding on Combating Illegal
Logging and Associated Trade and Supporting Sustainable Forest Management in2010. A regular meeting mechanism of the bilateral forestry working group has also122

been established between China and Japan and illegal logging has also been
included in discussions of this working group.
Chinese experts have also participated in numerous international workshops on
combating illegal logging held in Tokyo by relevant Japanese organizations.
(7) Cooperation with Russia
Russia is the main importer of China’s coniferous timber and the two countries haveextended their forestry cooperation in a highly wide range. At present, Russia is thelargest host country for China’s investment in forestry. A large number of Chinese
enterprises are investing in forest resource development or in processing of timber
products in Russia.
In November 2000, the Memorandum of Understanding on Cooperative Exploitationand Sustainable Utilization of Forest Resources in Far East Russia was signed by
Chinese and Russian prime ministers.
In November 2005, the tenth regular meeting between Chinese and Russian prime
ministers agreed on “strengthening the development and utilization of forest
resources and intensifying the actions in combating illegal logging and trade”.
Under the witness of Chinese President Xi Jinping and Russian President Vladimir
Putin, a Memorandum of Understanding on Forestry Cooperation was signed by Mr.
Zhang Jianlong, Administrator of State Forestry Administration of China and Mr.
Valentik, Head of Federal Forest Agency of Russian Federation on 25 June 2016 in
Beijing. According to the MOU, both sides will continue with the scientific andtechnological exchanges and economic cooperation through the China-Russia
Forestry Working Group on an equal, friendly and mutual-beneficiary basis, covering
fields of forestry legislation and law enforcement, sustainable forest management,
forest monitoring and inventory, forest conservation and utilization, combating illegal
logging and associated trade, desertification, forestry investment etc.
The forestry authorities of China and Russia have frequently held discussions onillegal logging issues.
(8) Cooperation with Canada
China and Canada have maintained a regular meeting mechanism for the bilateralforestry working group, which have included illegal logging into their discussions inrecent years. The forestry authorities of both countries organized a China-Canada
Workshop on Combating Illegal Logging and Associated Trade in Beijing on
December 5, 2016.

1233.1.11.3 Cooperation with various stakeholders especially international NGOs
China has established a four-in-one cooperative mechanism to combat illegal logging
and associated trade, involving the governmental departments, industry associations,research organizations and enterprises.
In addition to the bilateral and multilateral inter-governmental cooperation, China has
also extended fruitful collaboration with many NGOs on illegal logging and associatedtrade.
WWF, IUCN, Forest Trend, the domestic Global Environment Institute (GEI) andsome transnational enterprises cooperate with relevant Chinese organizations
through projects or jointly organizing international workshops.
3.1.11.4 Cooperation with other developing countries
MOFCOM provides a large number of forestry technical training workshops fordeveloping countries in China every year, including the FLEG Training Workshop
addressing illegal logging, technical training workshops for sustainable forest
management, training on wildlife protection and CITES implementation and so on. All
costs incurred for the foreign participants are funded by the Chinese government.
Besides, China also frequently organizes special technical trainings in developing
countries through various approaches, including on forest resource management,sustainable forest management, forest law enforcement and governance, etc., inorder to make the most efforts to help other developing countries improve theircapacity in forest governance and forest management and thus eradicate theoccurrence of illegal logging from the source wherever possible.
All the above cooperation activities mentioned fully demonstrate the consistentfulfillment of responsibilities by the government of China, as a large country, in firmly
combating illegal logging and associated trade and safeguarding the order ofinternational timber trade.
3.2 Progress in forest certification
As an effective market based instrument to promote sustainable forest management,
forest certification has developed rapidly around the world since it establishment in
1993. Besides 2 major international forest certification schemes co-existed, there areover 50 countries which have also developed their own national forest certification
schemes, and both the United States and Indonesia have developed 2 national forest
certification schemes respectively. The forest area certified and number of chain ofcustody issued by all kinds of forest certification schemes increased year by year.

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As the major country in the world in terms of forest resources, timber production,
timber processing and manufacturing, timber import, and forest products export, theforest certification in China also developed rapidly.
The development process of forest certification in China started in 1995 when theexperts of the Chinese Academy of Forestry (CAF) started the research on forest
certification. The first certificate of chain of custody by FSC was issued in 1998, andthe first certificate of forest management by FSC was issued in 2002.
The development of China Forest Certification Scheme started in 2001. After 15
years of stable development, it is now fully on the normal track and has realized to be
fully in line with international practices.
3.2.1 Development history of China Forest Certification Scheme
3.2.1.1 Scheme development stage








In 2001: An informal and multi-participatory Working Group on Forest Certificationin China was established in May, which had extensive discussions for all issues
on forest certification, and this kicked off the development of China Forest
Certification Scheme. In September, the State Forestry Administration (SFA) set
up a Leading Group on Forest Certification Work in China, and clearly decided to“set up a national forest certification scheme which complies with the condition of
the country and the condition of forestry”, and to set up a governing body of forest
certification which is the Division of Forest Certification (now the Division of
Certification Management) under its Science and Technology Development
Centre to monitor all forest certification work in China. This marked thecommencement of the development of China Forest Certification Scheme. At theend of that year, SFA formally commissioned CAF to develop forest management
certification standard, and also started the work of capacity building on forest
certification. Also at the end of that year, the Certification and Accreditation
Administration (CNCA) was also formally set up, which marked the establishmentof centralized and unified certification and accreditation mechanism in China.
In 2002: SFA joined the National Joint Ministerial Conference on Certification andAccreditation initiated by CNCA, and this marked that the development of China
Forest Certification Scheme was formally incorporated into the national unified
certification and accreditation mechanism.
In 2003: In June, the Decision to Accelerate Forestry Development by the Central
Committee of the Communist Part of China and the State Council clearly defined
to “actively carry out the forest certification work, and try to be in line withinternational practices as soon as possible”. This reflected that the Governmentof China attached great importance to forest certification work. At the same year,
SFA commissioned CAF to development chain of custody certification standard.
In 2004: Forest certification work was incorporated into central government
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financial budget, which marked the acceptance and support by the Governmentof China to forest certification work. At the same time, international exchange andcooperation of forest certification started to be carried out.
In 2005 and 2006: Pilot work on forest certification was carried out in typical forest
management unites and forest products processing and marketing companies inover 20 provinces with different forest ownerships, different forest management
models, and different forest climates, which aimed at testing 2 forest certification
standards, fostering forest certification talents, and accumulating forest
certification experiences.
In 2007: SFA issued 2 forestry sector standards of “Forest certification in China--- Forest management (LY/T 1714-2007)” and “Forest certification in China --Chain of custody (LY/ 1715-2007)”, which marked that the development of China
Forest Certification Scheme and sustainable forest management work enteredinto a new stage of scientific and standardized development. Also in that year,
PEFC set up a PEFC China Office, and then has kept good cooperation relation
all the way with government departments of China. The main functions and tasksof PEFC China Office are: to support and promote sustainable forest
management in China; to enhance the recognition of PEFC certification in the
China market; to promote PEFC chain of custody certification as an effective toolof market promotion and access; to strengthen cooperation with forestry andforest products industry of China; and to provide market with information services
and technical support of PEFC certification.
In 2008: CNCA and SFA jointly issued a policy document of “the View of Carrying
Out Forest Certification Work”, which clarified that the forest certification work in
China will be under the guidance and supervision of CNCA and SFA. This
marked the start-up and formal operation of China Forest Certification Scheme.
At the same year, SFA set up a National Technical Committee of Standardizationof Sustainable Forest Management and Forest Certification, which is mainly
responsible for the unified management of standardization related to forest
certification, including the following of track of forest certification standardization
tendency of main standardization organizations in the world and the entrusting ofdevelopment of various standards of forest certification.
In 2009: CNCA and SFA jointly issued a policy document of “Implementation
Rules for Forest Certification in China (Trial Implementation)”, which further
regularized forest certification activities in China. In the same year, the first forest
certification body “Zhonglin Tianhe (Beijing) Forest Certification Centre” wasestablished, and China Forest Certification Scheme formally started to be
operational. Also in the same year, China Forest Certification Scheme formally
started to the work of endorsement by PEFC.

3.2.1.2 Scheme operational stage
In 2010: In order to further strengthen the supervision to forest certification workin China, SFA re-established the Leading Group on Forest Certification Work in126

China, and at the same time established China Forest Certification Council(CFCC) which is responsible for the operation and management, promotion andpublicity, standard development and approval, and participation of international
exchange and cooperation on behalf of CFCC. The forest sector standard of“Forest certification in China --- Audit directive on forest management
certification” was issued, which provided technical guidance to the auditing offorest management certification in China. The first training course of forest
certification auditors was held in Hainan Province, which fostered talents forauditing of forest certification in China and is of great significance to forest
certification practices in China. SFA issued a policy document of “Guidance to
Rapidly Promote Forest Certification Work”, which clearly defined the guiding
ideology, fundamental principle, main tasks and development objectives of forest
certification work. The pilot work on auditing of forest management certification
was carried out, which aimed at putting forward to revision suggestions andcomments by testing the adaptability and feasibility of forest management
certification standard in China.
In 2011: A thematic exhibition on “Actively carry out forest certification andpromote modern forestry development” was held at the office building of SFA,
with forest certification in China extensively publicized and promoted. CFCC
became the member of PEFC, which is of milestone significance for theinternational endorsement of CFCC. CFCC formally launched its official website
which is also as the window for its external relation.

3.2.1.3 Scheme improvement stage

In 2012: The Standardization Administration of China (SAC) issued 2 national
standards of “Forest certification in China --- Forest management (GB/T
28951-2012)” and “Forest certification in China --- Chain of custody (GB/T
28952-2012)”. A usage guideline of China forest certification logo was developed,
which regularized the usage of China forest certification logo. CFCC formallysubmitted endorsement documents to PEFC. The second training course forforest certification auditors was held, which provided forest certification auditors
team with more talents.
In 2013: 2 meetings of Stakeholders Forum of CFCC were held in Beijing andShanghai in January and July, respectively. In May and August, the third andforth training courses for forest certification auditors were held in Shangdong andHeilongjiang Provinces, respectively. In July, the Forest Certification ResearchCentre of SFA was established in the Chinese Academy of Forestry, which is
responsible for the forest certification research and information consultation
services. In October, 2 forestry sector standards of “Forest certification in China--- Forest eco-environment services --- Nature reserve (LY/T 2239-2013)” and“Forest certification in China --- Forest eco-environment services --- Audit
directive for nature reserve (LY/T 2240-2013)” were issued.
In 2014: On February 5, China Forest Certification Scheme was formally
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endorsed by PEFC, which is the time of most milestone significance for both
CFCC and China Forest Certification Scheme. In August, 12 forestry sector
standards of forest certification were issued, such as “Forest certification in China--- Non-timber forest products management (LY/T 2273-2014)” and “Forest
certification in China --- Guidance on bamboo management certification (LY/T2515-2015)”. The standard system of China Forest Certification Scheme wasbasically established.
In 2015: In June, CNCA and SFA jointly issued a new policy document of “Forest
Certification Rules”, which clearly defines that the basis for carrying out forest
certification in China are national standards and forest sector standards of forest
certification in China. It also emphasizes to improve the supervision of forest
certification bodies and regulate the forest certification market. Based on thispolicy document, China National Accreditation Service for Conformity
Assessment (CNAS) issued a revised “Accreditation Scheme for Forest
Certification Bodies (CNAS-SC23:2015)”, and China Certification andAccreditation Association (CCAA) issued a revised “Registration Criteria forManagement System Auditors” (including forest certification auditors)”. The
issuance of these 2 documents plays a positive role in scientifically guiding forest
certification work and regulating forest certification activities. In the same year,
CFCC was granted with a certificate which verifies that China is the country
among PEFC family with the largest increase of certified forest areas in 2015.
2016: CFCC was granted with a certificate which verifies that China is the thirdlargest country among PEFC family with the increase of chain of custody in 2016.
Box 3-2: “Forest Certification Rules” by CNCA and SFA
2.1 Scope of application: All forest certification bodies
and other organizations which would like to carry out
forest certification activities in the territory of the People’s
Republic of China shall abide by this rule.
3. Basis for certification: Forest certification shall bebased on relevant national standards or forest sector
standards.

3.2.2 Latest progress of forest certification in China
At present, there are 3 different forest certification schemes which co-exist in the
China market, and they are CFCC, PEFC and FSC.
As for December 2016, the latest progress of these 3 forest certification schemes is
as follows:128

(1) For CFCC: 8.75 million ha (8,750,287.32 ha) of forest areas are certified, with 29
chain of custody certificates issued.
(2) For PEFC: In the world level, there are 303 million ha (303,134,908 ha) of forest
areas certified, with 10,968 chain of custody certificates issued. In China, there
are 5.53 million ha (5,526,298 ha) of forest areas certified, and 283 chain ofcustody certificates issued. The certified forest areas by CFCC in China should be
the same of PEFC certified forest areas due to the endorsement.
(3) For FSC: In the world level, there are 194 million ha (194,093,509 ha) of forest
areas certified, with 32,622 chain of custody certificate issued. In China, 4,811
chain of custody certificates are issued, which is the largest one in the world.
3.2.3 Supervision and management of forest certification in China
The Supervision and management authorities of forest certification in China are theCertification and Accreditation Administration (CNCA) and the State Forestry
Administration (SFA). All of forest certification work in China shall be under the jointsupervision and management of CNCA and SFA.
CNCA is responsible for the unified management, supervision and integrated
coordination of all certification and accreditation work across the country, and also
responsible for the approval of accreditation bodies and certification bodies. Under
CNCA, there are China National Accreditation Service for Conformity Assessment(CNAS) and China Certification and Accreditation Association (CCAA).
CNAS is set up under CNCA according to the stipulation by “Certification andAccreditation Regulation”, and is the only authorized accreditation body in China,
which is responsible for unified accreditation of certification bodies, laboratories, andinspection bodies etc.
CCAA is a national non-profit association in the certification and accreditation sector,
consisting of group members and individual members from accreditation bodies,certification bodies, certification training bodies, certification consulting bodies,laboratories, inspection bodies and parts of certification related organizations. CCAA
is responsible for the management, education and training for qualification ofcertification auditors and inspectors.
SFA is a national governmental department for the forestry sector. SFA Science andTechnology Development Centre sets up a Division of Certification Management,
which is responsible for the unified management of all forest certification work in
China. CFCC is responsible for the management and operation of China Forest
Certification Scheme, and represents China Forest Certification Scheme to conduct
international exchange and cooperation.

1293.2.4 Overview of China Forest Certification Scheme
3.2.4.1 Organizational structure
The organizational structure of China Forest Certification Scheme is as Figure 3-1.

Figure 3-1: Organizational structure of China Forest Certification Scheme
CFCC is the highest governing body of China Forest Certification Scheme, and its
daily work is managed by its Secretariat.
According to the principle of multi-participation, CFCC consists of 21 members fromgovernment departments, research institutions, universities, companies, and socialgroups, which represent interests from social, economic and environment sectors.
The main responsibilities of CFCC are as follows:(1) Organizing the formulation, approval and announcement of documents of China
Forest Certification Scheme;(2) Operating and governing China Forest Certification Scheme;(3) Arbitrating the disputes, complaints and appeals of China Forest Certification
Scheme;(4) Promoting and publicizing China Forest Certification Scheme; and(5) Representing China Forest Certification Scheme to participate international
exchange and cooperation.
The Secretariat of CFCC is set in the Science and Technology Development Centre
of SFA, and is responsible for the daily work of CFCC. The Secretariat consists of one
Secretary General and one Deputy Secretary General. The Secretary General is
responsible for the overall issues of the Secretariat, while the Deputy Secretary

130

General assists the Secretary General for its work, and also is responsible for thetechnical support and international cooperation.
The Stakeholders Forum aims to provide all parties, which pay attention to andsupport the China’s forest certification process, with a platform for informationexchange and cooperative participation, and also to enhance the transparency of thescheme development, which helps the China Forest Certification Scheme to be moresuitable to the condition of the country and the condition of the forestry, as well as tobe more advanced. Every year, the Stakeholders Forum irregularly holds plenary
meetings and also thematic meetings for parts of its members, so as to communicate
and change with its all members about the major issues related to the development
strategy of China Forest Certification Scheme, and also to solicit comments andsuggestions from all parties.
The National Technical Committee of Standardization of Sustainable Forest
Management and Forest Certification is governed jointly under the Standardization
Administration of China (SAC) and SFA, which is the technical organization forstandardization of sustainable forest management and forest certification of the wholecountry.
The Dispute Resolution Committee is a part of CFCC organizational framework,
which, however, is not affected by CFCC and other organizations. It conducts work
independently, and aims to ensure the objectiveness, fairness and effectiveness offorest certification work, and to maintain and report the legal rights and interests aswell as reasonable appeals by forest certification applicants, certification bodies,accreditation bodies and related stakeholders.
3.2.4.2 Scheme documents
In order to ensure its standardized operation, China Forest Certification Scheme hasdeveloped a series of scheme management documents, which mainly include theguidance documents and procedural documents. These documents mainly include“Standard Development Rule”, “Guidelines on Group Forest Management
Certification”, “Procedures for Certification, Accreditation and CFCC Notification of
Certification Bodies”, “Dispute Resolution Procedures”, “Procedures for Verifying
Logo Usage by CFCC”, “Application Procedures for Using CFCC Forest Certification
Logo and Explanations of Application Procedures for Certification Auditing by
Certification Bodies”, “Usage Rules for China Forest Certification Logo” and“Management Rules for China Forest Certification Logo” etc.
3.2.4.3 Scopes of certification
China Forest Certification Scheme not only adopts international practices, but also
has creative measures. It mainly extends scopes of certification.
131

Apart from international practices of forest management certification and chain ofcustody certification, China Forest Certification Scheme also includes the followings:(1) Certification for bamboo forest management;(2) Certification for non-timber forest products management;(3) Certification for commercially managed precious and endangered species;(4) Certification for forest eco-environmental services;(5) Certification for carbon sequestration forests;(6) Certification for forest fire; and(7) Certification for forest flowers etc.
3.2.4.4 Certification standards
Each scope of certification of China Forest Certification Scheme has its
corresponding certification standard. All certification standards are recommendatory
and not compulsory as all certifications are voluntary. In addition, in order to help
certification bodies accurately master certification standards with the same auditing
yardstick, China Forest Certification Scheme also developed corresponding audit
directives for certification bodies. And at the same time, in order to help certificationcompanies accurately master certification standards and improve management level,
China Forest Certification Scheme also developed corresponding operational
manuals for certification companies.
As of the end of 2016, China Forest Certification Scheme has issued a total of 25
standards, including 9 certification standards (2 national standards and 7 forestry
sector standards), 9 audit directives, and 7 operational manuals. It can be concluded
that China Forest Certification Scheme has established quite perfect standard system.
The concrete standards and corresponding scopes of certification are as following
table.
Table 3-2: List of standards of China Forest Certification SchemeNo.

1

Scope ofcertification

Certification standard

Audit directive

Operational manuals(1) Forest certification in

Forest certification in

Forest certification in

China - Forest management

China - Audit directive

China - Operation

Forest(GB/T 28951-2012), and (2)on forest management

guideline on forest

management

Forest certification in China -certification (LY/T

management (LY/T

Plantation management

1878-2014)

2280-2014)

Forest certification in

Forest certification in

China - Audit directive

China - Operation

on chain of forest

guideline on the chain ofcertification (LY/T

custody (LY/T(LY/T 2272-2014)
Forest certification in China 2

Chain of custody

Chain of custody (GB/T
28951-2012)

132

3

2281-2014)

2282-2014)(1) Forest certification in

Forest certification in

Forest certification in

China - Forest management

China - Non-timber

China - Guidance on

Non-timber forest(GB/T 28951-2012), and (2)forest productNon-timber forest

products

Forest certification in China -certification audit

products management

management

Non-timber forest products

directive (LY/T

certification (LY/T

management (LY/T

2274-2014)

2514-2015)(1) Forest certification in

Forest certification in

Forest certification in

China - Forest management

China - Bamboo

China - Guidance on

Bamboo forest(GB/T 28951-2012), and (2)management

bamboo management

management

Forest certification in China -certification audit

certification (LY/T

Bamboo forest management

directive (LY/T2515-2015)(LY/T 2275-2014)

2276-2014)(1) Forest certification in(1) Forest certification in(1) Forest certification in

China - Forest management

China - Forest

China - Forest eco-

(GB/T 28951-2012), (2)eco-environment

environment services -Forest certification in China -services - Audit

Operation guideline on

Forest eco-environment

directive for nature

nature reserve (LY/T

Forest eco-services - Nature reserve

reserve (LY/T2604-2016), and (2)environmental(LY/T 2239-2013), and (3)2240-2013), and (2)Forest certification inservices

Forest certification in China -Forest certification in

China - Operation

Forest park eco-environment

China - Audit directive

guideline on forest park

services (LY/T 2277-2014)

for park

eco-environment

eco-environment

services(LY/T

services (LY/T2605-2016)

2273-2014)

452278-2014)(1) Forest Certificationin China - Precious andCommerciallymanaged6

precious andendangered
species(1) Forest certification inendangered wildlife for

China - Precious andproduction andendangered wildlife formanagement feedingproduction and management

and management –- Feeding and management

Auditing (LY/T(LY/T 2279-2014), and (2)2601-2016), and (2)Forest Certification in China -Forest Certification in

Artificial planted endangered

China - Artificial planted

species of plants (LY/T

endangered plants

2602—2016)

certification audit
directive (LY/T2603-2016)

Carbon7

sequestration
forests

133

8

Forest fire9

Forest flowers

10

Forest certification in

Forest certification inGroup

China – Audit directive

China – Guideline on

certification

on group certificationgroup certification (LY/T(LY/T 2512-2015)

2513-2015)

3.2.4.5 Accreditation bodyAccording to relevant laws and regulation, there is only one accreditation body in
China, which is China National Accreditation Service for Conformity Assessment(CNAS). CNAS is also a member of the International Accreditation Forum (IAF).
Currently, the director general of CNAS is also the chair of the Board of Directors of
IAF.
The accreditation body for China Forest Certification Scheme is also CNAS. Under
the support of CFCC, and according to the new “Forest Certification Rules” jointly
issued by CNCA and SFA in 2015, CNAS issued a new “Accreditation Scheme for
Forest Certification Bodies (CNAS-SC23:2015) in 2015, which is used to guide theaccreditation for forest certification bodies in China.
As of the end of 2016, there are a total of 5 forest certification bodies which had been
accredited by CNAS. They are Zhonglin Tianhe (Beijing) Forest Certification Centre,
BV Certification, Jinlin Songbai Forest Certification Co. Ltd., Jiangsu Zhiyuan Forest
Certification Centre Co. Ltd., and SGS China.
3.2.4.6 Certification bodies
According to relevant laws and regulations, all certification bodies (including forest
certification bodies) have to be approved by CNCA and register in the government
department of industry and commerce, as otherwise they can not do any certification
audits. The new “Forest Certification Rules” jointly issued by CNCA and SFA in 2015
also stipulates very clear requirements for the qualifications for forest certification
bodies and forest certification auditors, the procedure for forest certification, andcertificates etc.
The first forest certification body in China is Zhonglin Tianhe (Beijing) Forest
Certification Centre which was set up in 2009. Currently, there are 15 certification
bodies which have been approved by CNCA to conduct forest certification audits.
Among these 15 forest certification bodies, some are fully owned by foreign capitals,
some are joint ventures, and some are fully owned by domestic capitals.
3.2.4.7 Auditors

134

According to relevant laws and regulations, all certification auditors have to be
granted with qualification certificates by CCAA. What is a pity is that many people
who conduct forest certification audits (mainly for FSC certification) do not have suchqualification certificates granted by CCAA.
All auditors for China Forest Certification Scheme have participated professional
examinations organized by CCAA, and have registered in CCAA or they are granted
by CCAA with qualification certificates.
Under technical support by CFCC, and according to the new “Forest Certification
Rules” jointly issued by CNCA and SFA in 2015, CCAA issued in the beginning of2016 a new “Registration Criteria for Forest Certification Auditors”, which further
regulates the registration requirements for forest certification auditors, including
qualification requirements, knowledge and skill requirements, assessment
requirements, codes of conducts, monitoring and qualification disposition, as well as
special requirements for forest certification auditors.
As of the end of 2016, there are over 200 registered forest certification auditors incertification bodies, among which, Zhonglin Tianhe (Beijing) Forest Certification
Centre has 155 auditors (both for full-time and for part-time) including 12 senior
auditors, Jinlin Songbai Forest Certification Co. Ltd. has 14 auditors, and Jiangsu
Zhiyuan Forest Certification Centre Co. Ltd. has 4 auditors.
3.2.4.8 Certification logo
CFCC Logo includes the logo itself and corresponding descriptions.
CFCC Logo consists of figure and code. The figure includes two ginkgo leaves, one
sustainable ring, and CFCC characters. The following figure shows the CFCC Logo.

Standard color value for figure: C: 100; M: 0; Y: 100; K: 0.
Standard color value for code: M: 0; Y: 0; K: 100.
Figure 3-2: CFCC Logo
“Usage Rules for China Forest Certification Logo” stipulates that CFCC Logo
(including capital letters) is copyrighted and is owned by CFCC. CFCC Logo is also a
registered trademark owned by CFCC. Un-authorized use of this copyrighted logo isprohibited and may lead to legal action. All CFCC certified companies have to use
CFCC Logo.
135

Based on different usage types, CFCC Logo consists of on-product used logo andoff-product used logo.
The composition of CFCC Logo will vary with different scopes of certification anddifferent certification means.
Figure 3-3 shows certification logo on general timber products.

Figure 3-3: Certification log for general timber products
Figure 3-4 shows certification logo for non-timber forest products.

Figure 3-4: Certification logo for non-timber forest products
3.2.5 Government support
The Government of China attaches great importance to forest certification work,
especially for China Forest Certification Scheme. SFA not only initiated and promoted
to establish China Forest Certification Scheme, but also adopts a series of policy
support measures and also works with CNCA to jointly supervise and monitor forest
certification activities so as to promote a healthy, stable and ordered development for
China’s forest certification.

1363.2.5.1 Setting up management body
As mentioned previously, SFA set up a Leading Group on Forest Certification Work in
China, and also set up a Division of Certification Management under its Science andTechnology Development Centre to govern all forest certification work in China, andto act as the Secretariat of CFCC to manage the operation of China Forest
Certification Scheme.
3.2.5.2 Setting up a special fundAs mentioned previously, forest certification work has been incorporate into thegovernment financial budget, and the Science and Technology Development Centre
of SFA allocates an annual budget of about 8 million yuan as a special fund to forest
certification work, including standard development, pilot and demonstration, policy
research, and international cooperation etc.
3.2.5.3 Adopting preferential policy
SFA issued a policy document on September 16, 2010, which is “Guidance to Rapidly
Promote Forest Certification Work”. The Guidance clearly defines the guiding
ideology, fundamental principles (which are: (1) guided by government andsupervised by society; (2) driven by market and voluntary by company; (3) governedin an integrated way and implemented in a diversified approach; and (4) pilot projects
first and steady advancement thereafter), development objectives and main tasks forforest certification work in China. The Guidance also put forward policy measures toaccelerate forest certification work in China, with 2 major items as follows:(1) Formulating policy measures which are conducive to sustainable forest
management and forest certification, strengthening the communication andcoordination with relevant government departments, and incorporating certified
forest products into government procurement lists as soon as possible andgradually increase their procurement proportion; and(2) Providing certified forest management units and certified forest products
processing and marketing companies with supports in technical guidance,
information services, projects arrangement, resources utilization, bank loans, andmarket extension etc.
Box 3-3: Guidance to Rapidly Promote Forest Certification Work by SFA(22) Enhancing policy support: Formulating policy measures which areconducive to sustainable forest management and forest certification,
strengthening the communication and coordination with relevant
government departments, and incorporating certified forest products into
government procurement lists as soon as possible and gradually increase137their procurement proportion. Providing certified forest management units
and certified forest products processing and marketing companies withsupports in technical guidance, information services, projects
arrangement, resources utilization, bank loans, and market extension etc.

3.2.5.4 Adopting government procurement policy for certified forest products at
an appropriate time
According to the policy document of “Guidance to Rapidly Promote Forest
Certification Work” issued by SFA on September 16, 2010, the Chinese Academy ofForestry (CAF) conducted a policy feasibility study on government procurement
policy for certified forest products, and put forward to a road map of 3 steps about the
adoption of the government procurement policy for certified forest products in China:(1) Step one: Gradually revising the currently applied requirements of timbermaterials in the standard of “Technical Requirements for Environmentally Labeled
Products” which is already incorporated into government procurement lists forenvironmentally labeled products, by just replacing the name of certification
scheme for sustainable forest management with “CFCC or CFCC endorsed
national forest certification schemes” as a part of requirements to timber materials;(2) Prioritizing at an appropriate time the procurement of CFCC (or CFCC endorsed
national certification schemes) certified paper products among all government
departments, State owned companies, and government funded organizations in
the forestry sector; and(3) Incorporating at an appropriate time all CFCC (or CFCC endorsed national
certification schemes) certified forest products into government procurement lists.
Due to the fact that the total amount of government procurement in China accounts
for a very high proportion over the total GDP and also government financial
expenditure, especially its proportion over the total procurement among government
departments, State owned companies, and government funded organizations is muchhigher, so if the certified forest products can been incorporated into government
procurement lists, it will be of a very significant importance in promoting forest
certification and sustainable forest management in China.
3.2.5.5 Adopting government subsidy policy for certified forest products at an
appropriate time
In 2015, commissioned by the State Forestry Administration (SFA), the Chinese
Academy of Forestry (CAF) conducted a policy feasibility study on government
subsidy policy for certified forest products, and put forward to 3 policy options, for the
adoption of the government subsidy policy for certified forest products in China at an
appropriate time.
138

(1) Directly subsidizing certified companies
Any company (especially the forest management unit, and also forest products
processing and marketing company) which is certified under CFCC (or CFCC
endorsed national certification schemes) will get subsidy from the government. The
subsidy standard is based on certified area of the forest management unit or annual
sales values of the forest products processing and marketing company. Such policy issimilar to currently implemented government subsidy policy for solar photovoltaic
products.
(2) Indirectly subsidizing buyers
Any consumer who buys forest products which are certified under CFCC (or CFCC
endorsed national certification schemes) will get some discount, while the discount is
subsidized directly by the government to the sellers (or indirectly by the government
to the buyers). The subsidy standard is normally a certain percent of the sales price.
Such policy is similar to formerly implemented government policy for “the home
appliance subsidies for rural areas”.
(3) Subsidizing both sides
This is the combination of above mentioned 2 policy options. The government willsubsidize both directly to the forest management units or forest products processing
and marketing companies which are certified under CFCC (or CFCC endorsed
national certification schemes), and indirectly to the buyers. Such policy is similar tocurrently implemented government subsidy policy for electric vehicles.
As the profitability of wood industry in China is generally relatively low, for thecompanies, if they can get government subsidy, even quite small, it will be quite
helpful, which naturally promotes the companies to actively conduct forest
certification.
For the consumers, such policy will be more effective. As the Chinese people’s qualityof life is increasing and their environmental awareness is enhancing, more and more
people would like to pay a little more to buy environmentally friendly products which
are certified and labeled with special logo. If they can buy such environmentallyfriendly products by not paying more rather by paying less, it will be surely very
conducive to the marketing of such environmentally friendly products, thus promoting
the companies to actively conduct forest certification.
3.2.6 Chain of custody certification standard and EU Timber Regulations

139

The national certification standard of “Forest certification in China - Chain of custody(GB/T 28952-2012)” released in 2012 was developed based on PEFC International
Standard of “Chain of Custody of Forest Based Products - Requirements (PEFC ST
2002:2010)”, which already included requirements for due diligence in response toillegal logging, but not fully perfect.
In order to tackle illegal logging, especially in response to EU Timber Regulation,
PEFC adopted a new “Chain of Custody of Forest Based Products - Requirements” in
2013.
In order to keep China Forest Certification Scheme in a sustainable line withinternational practices, CFCC is now revising the national certification standard of“Forest certification in China - Chain of custody”, so as to ensure to be in consistency
with PEFC new “Chain of Custody of Forest Based Products - Requirements”
adopted in 2013, which already meets relevant requirement by EU Timber Regulation.
Currently, the process of the revision of this national standard is around the end, andthe expert assessment meeting over the draft of the revised standard was held in
Beijing on December 19, 2016, and the new standard is expected to be issued in thefirst half of 2017 after final revision and improvement.
The currently being revised national standard of “Forest certification in China - Chainof custody” especially enhances the due diligence system (DDS), and requires that all
raw materials entered into chain of custody process in the certified company must
implement DDS, and at the same time increases the benchmark of risk assessment
so as to keep full consistency with DDS requirements set by EU Timber Regulation. It
can be concluded that all timber products certified by the new chain of custody
standard will naturally meet requirements of low risk category of risk assessment for
timber legality set by EU Timber Regulation, thus naturally can smoothly be enteredinto EU market.
Currently, there is a voice in China, and also in some other countries, which needs tobe paid with attention: Forest certification is an effective market based instrument topromote sustainable forest management, and is conducted by an independent third
party to verify both the legality of the sources of timber and the sustainability of the
management of forests which produce such timber. However, due to various reasons,
not all companies can meet requirements in a very high standard of sustainability, sojust to ensure the legality of sources of timber as a basic requirement is the first
choice by most companies. And the DDS in the upcoming new national standard ofchain of custody certification can be taken as an independent standard or basis toverify the timber legality, also with technical feasibility and practical operationality.
Especially, this new national standard of chain of custody certification will be issued
by the government through the Standardization Administration of China (SAC), tosome extent of significance, it is also one of concrete measures for the Governmentof China in response to illegal logging.
1403.2.7 FSC development in China
It should be stated that the forest certification development around the world should
firstly give the credit to FSC. As the first international forest certification scheme, FSC
does contribute significantly in the process of forest certification in the world including
China.
However, due to many reasons such as scheme design etc, FSC also faces various
challenges in some countries, especially in China.
3.2.7.1 Before 2003
The concept and practice of FSC entered into China quite early thanks to the active
promotion by the World Wide Fund for Nature (WWF)In July 1999, SFA and WWF jointly held an international workshop on sustainable
forest management and forest certification in Beijing, which helped governments,
academia and companies have some knowledge and understanding about forest
certification.
The first certificate of chain of custody by FSC was issued in 1998, and the firstcertificate of forest management by FSC was issued in 2002.
In May 2001, under the financial support by WWF, the Chinese Academy of Forestry
initiated to establish an informal and multi-participatory Working Group on Forest
Certification in China to extensively discuss all issues on forest certification, which
made active contribution to the forest certification process in China.
In 2003, under the financial support by the Swedish company of IKEA and WWF,
Youhao Forest Industry Bureau of Heilongjiang Province and Baihe Forest Industry
Bureau of Jilin Province started to conduct forest management certification, andeventually went through forest management certification in 2005. This is the fist State
owned forest management units in China to be certified for forest management, with a
total certified forest area of 420,000 ha.
3.2.7.2 After 2004
On November 1, 2003, the Certification and Accreditation Regulation was formally
implemented.
This regulation stipulates concrete requirements to all certification bodies andcertification auditors. The FSC and its certification activities in China contradict therequirements set by the regulation, which makes FSC and its certification activities in141

China always in a grey state: On one hand, FSC certification did provide many
Chinese companies with useful guarantee in opening and maintaining foreign export
market, while on the other hand, FSC and its certification activities also did contradictcurrent laws and regulations, which makes the government supervision andmonitoring departments in an very awkward and embarrassing situation.
Particularly, in June 2015, CNCA and SFA jointly issued a new policy document of“Forest Certification Rules”, which clearly stipulates that all forest certification in
China must be based on China’s national standards and forestry sector standards,
but FSC international standard is not listed as the certification basis in this policy
document. That is to say that there is a legal problem for all forest certification FSC
conducted in China with its own international standard.
What is more awkward and embarrassing is that in order to further regulate activities
in China by overseas non-governmental organizations (NGOs), the National People’s
Congress (China’s parliament) adopted “Law of the People’s Republic of China on
Administration of Activities of Overseas Non-governmental Organizations in the
Mainland of China”, which is effective on January 1, 2017. As the administrative law
enforcement authority of this law, the Chinese Ministry of Public Security issued on
December 2016 a policy document “Areas of Activities, Lists of Projects and Lists ofBusiness Competent Departments of Overseas Non-governmental Organizations in
the Mainland of China (2017)”, which clearly excludes FSC and its activities. Thisfurther challenges the legal status of FSC and all of its activities and certifications in
China. On the other hand, PEFC is listed in this policy document to be allowed to
conduct activities under the item of “training, promotion and capacity building of forest
certification standards”, and moreover any other national forest certification schemes
which are mutually endorsed by CFCC and PEFC are also allowed to conduct“exchange and cooperation projects” in China.
As such, people will wait and see how FSC deals with its legal status in China, andeven how FSC continues to exist in China.
3.2.7.3 Current situation of FSC certification
As of the end of 2016, FSC certified 840,000 ha of forest areas in76 forest
management units in China. Compared with 8.75 million ha of forest areas certified
under CFCC (or PEFC), this is just a small fraction. But FSC certified 76 forest
management units, which means that most of forest management units certified
under FSC is in a small scale, with only about 10,000 ha each.
FSC certified 4,811 companies with chain of custody in China, which is the largest in
the world among its family. However, a report of a survey disclosed that: (1) Most of
FSC chain of custody certified companies are medium and small ones, and only partsof their production lines are certified; and (2) Especially, nearly half of certified
142

products are produced under requested orders, which means that for some ofcompanies there might be no production of certified products all year around. Thismay be due to 2 reasons: One is that there might be no request order coming. The
other is that there might be no appropriate certified raw materials. All in all, for most ofcertified companies, the proportion of total sales value of certified products over the
total sales value of the certified company may be less than 10% in an average.
3.3 Actions Adopted by the Government and Industrial Organizations to Include
Timber Legality into Legislation
The above Section 3.1 has elaborated various measures applied by the Chinese
government in coping with illegal logging and also mentioned related actions adopted
by industrial enterprises. For this, the current section will mainly provide conclusive orcomplementary information.
3.3.1 Actions adopted by government departments
Various countermeasures against illegal logging adopted by the Chinese government
have been explored in detail above. It also mentioned that full preparations havebeen done for the legislation on timber legality and revisions of laws, regulations andpolicies will be made in due time, with a rough timetable provided:(1) A long-term goal is set for the timely amendment of the Forest Law and otherrelevant laws to include the prohibition of illegal logging;(2) a medium-term goal is set for the revision of the Regulations for the
Implementation of Forest Law and other related regulations to include theprohibition of illegal logging; and(3) a short-term goal is set for the modification of related policies and departmental
rules to include the prohibition of illegal logging.
3.3.2 Actions adopted by industrial organizations
The active timber industrial organizations (or timber industrial associations) include
the Chinese Forestry Industry Association, China National Forest Products Industry
Association, China Timber and Timber Products Distribution Association andShanghai Timber Trade Association.
For years, these timber industry associations have been paying attention to therequirements put forward by EU Timber Regulation and the Lacey Act of USA andworking with the governmental departments, Chinese and international NGOs andother industry associations to cope with such international requirements towards
timber legality. The actions adopted by them are listed below:

143(1) Active participation in various symposia, workshops and trainings on illegal
logging held at home and abroad, among which, the trainings introduced thespecific requirements of EU Timber Regulation and the Lacey Act, and laws andregulations of the countries of origin;(2) Active participation in discussions with governmental departments, NGOs andinternational organizations on how to tackle illegal logging issues and in theprocesses of standard development and policy-making;(3) Communication with governmental departments to promote the government green
procurement;(4) Assistance provided to their member companies (especially those engaged inoverseas trade), including helping them raise awareness of risks and improve
capacity building, providing information service and technical trainings, etc.;(5) Initiation to establish an alliance or develop and revise the industry’s self-discipline
agreement, requiring involved companies to “purchase timber of legal sources”;(6) Cooperation with international organizations to recommend timber suppliers withlegal timber sourcing; and(7) Assistance provided to companies to carry out the first-party and third-party timber
legality verification and pilot the second-party verification schemes.
In addition to the above actions, some timber industry associations also adopt more
relevant activities to meet the requirements of timber legality.
3.3.2.1 Chinese Forestry Industry Association
The Chinese Forestry Industry Association was established in 2007, previously
named the China National Forestry Industry Association. At the very beginning of its
establishment, the association highly emphasized the forest certification as an
approach for the verification of timber legality and sustainability of forest management.
It was the investor for Zhonglin Tianhe Forest Certification Center, the first certifier
under the China Forest Certification Scheme, when it was established in 2009. The
forest certification center was restructured to be a company in 2010, after which theassociation became a shareholder and held 20% shares of the center. Now theassociation is still involved in actions coping with timber legality through conducting
forest certification as an approach for the verification of timber legality andsustainability of forest management.
3.3.2.2 China National Forest Products Industry Association(1) Pilots on timber legality verification
As mentioned above, China National Forest Products Industry Association (CNFPIA),
among China’s timber industry associations, is an active promoter for timber legality
verification. In November 2012, CNFPIA officially released the pilot Timber Legality
Verification Standard of China and started the pilots for timber legality nationwide. So
144

far, a total of 13 companies have obtained the certificates of timber legality issued by
CNFPIA and several companies are still undergoing the verification process.
The association is assisting SFA and working with other industry associations andresearch and education organizations in developing the official group standard for theTimber Legality Verification Standard of China. It can be forecasted that the group
standard will be ultimately promulgated by CNFPIA, regardless of how muchtechnical support will be provided by other participatory organizations.
(2) Company credibility
In response to the requirement of the government to “rectify and regulate the market
economic order and improve the social credibility system of modern market-oriented
economy”, CNFPIA has passed and established a platform “China Forestry Industry
Credibility Alliance” since September 2012 and encourages its member companies tojoin in. As part of the credibility system, the implementation of due diligence bycompanies during timber sourcing to assure legality is also included as an evaluation
indicator.
3.3.2.3 China Timber and Timber Products Distribution Association
China Timber and Timber Products Distribution Association (CTWPDA) is anindustrial association subordinated to the State-owned Assets Supervision and
Administration Commission of the State Council and applicable for all timbercompanies across China.
In addition to the above general actions, China Timber and Timber Products
Distribution Association has already been approved to develop the “enterprise credit
evaluation system” as early as in late January 2007. Accordingly, it has formulated
the pilot Regulations on Credit Evaluation for Timber Enterprises, which provides forthe principles of evaluation, conditions of company applicants, establishment ofevaluation agencies, elements of evaluation and rating, evaluation methods andprocedures, charges and their uses, information disclosure, supervision andadministration, etc.
The evaluation is carried out against six aspects, namely the basic credit capacity, thecompany operation performances, the business solvency, the business managementcompetence, commercial credit records and social responsibility. Each aspect isweighed differently with specific indicators in the evaluation system as a whole, where
the full mark is 100 scores. The credit rating for timber companies consists of threelevel and five sub-levels according to their scores.
The evaluation system and its indicators involve almost all aspects of a company’s
credit, and there is a COC (chain of custody) certification in cohesive coherence with145

timber legality, i.e. the CSR (corporate social responsibility) evaluation, which“emphasizes in investigating the legality of timber sourcing by the company and its
integrated timber utilization, and evaluates the degree of its contribution to thesustainability of forest resources”.
The evaluation system also includes the companies’ environmental and social
aspects as part of the credit evaluation indicators, in order to promote the legal timbertrade world worldwide by increasing the timber companies’ responsible
consciousness in protecting environment, and encouraging them to adopt practices infavor of environment protection, including forest management certification, COC
certification, procurement of certified timber, tree planting, increased integrated
utilization rate of timber, etc. These aspects weigh 8%. The COC certification serves
as an indicator in the credit evaluation system, but it is only an encouraged practice
but does not compose a compulsory requirement. The evaluation indicators against
these aspects include (e.g. for a production company):(1) If the company procures certified timber and if yes, which forest certification
scheme does it apply, the amount and proportion of the certified timber?
(2) If the timber and timber products production company adopts COC certification?
Which certification scheme is applied? Companies passing certification will gethigh scores, and those applying COC certification get the highest scores;(3) Has the company passed the Social Accountability 8000 Standard certification,
ISO14000 certification in Environmental Management, certification of
OHSAS18001 Occupational Health and Safety, etc.?
(4) How many timber procurement contracts have been signed by the company since
its involvement in the credit rating? How many of the signed contracts committing
to “supplying timber with abidance by local laws and regulations in relation toforest logging” and how much is the amount of supply under such commitment?
Who are the suppliers? How much is the amount of supply of other timber without
such commitment and who are the suppliers?
(5) What is the company’s timber utilization rate?
(6) Does the company have any record on illegal logging or forest destruction or
imports of endangered species held by the governmental supervision
department?
(7) Has the company ever sponsored any programs for public good such as
tree-planting and environment protection? Has it contributed to the sustainable
development of forest environment?
(8) Is the company involved in the double-commitment (quality and after service)
campaign initiated by China Timber and Timber Products Distribution
Association ?
Regarding that China is creating a credit system applicable nationwide, the current
evaluation system is proved to play a positive role in regulating all aspects ofbusiness operation by timber companies including assuring the legal source of timber,146

so the system is still in use. The notice about its application for 2016 was justreleased on December 28, 2016.
3.3.2.4 Shanghai Timber Trade Association
Besides the above general actions taken by industrial associations, Shanghai Timber
Trade Association (STTA), as a local timber industry association, also proactively
adopts other measures to cope with illegal logging, as follows:(1) Collaborating with competent departments and joining in various combating
activities, and carrying out independent or joint investigations on the international
trade operated by timber companies, focusing on the region of Yangtze River
Delta;(2) Independently or cooperatively organizing or assisting in organizing numerous
domestic and international workshops on timber legality, timber industry
exhibitions and other events in Shanghai, and organizing the face-to-facedialogues and exchanges between the participants and the timber companies
based in Shanghai and the whole region of Yangtze River Delta;(3) Collaborating with competent departments in organizing companies based in
Shanghai and the whole region of Yangtze River Delta to visit USA in 2008 for theUpdate Workshop on Legal Trade in Timber Products in USA and EU, where theparticipants were organized to hold face-to-face dialogues and communication
with officials from US Department of Justice, US Forest Service, etc.;(4) Organizing certification trainings and extension activities to encourage its member
companies to purchase certified timber or timber from USA and European
countries assured to have low risks;(5) Encouraging eligible member companies to pass forest certification to minimize
the risks in timber legality; and(6) Strengthening communication and cooperation with international timber industry;for example, in recent years, STTA has established long-term communication andcooperation mechanisms, in succession, with American Hardtimber Export
Council (AHEC), American Softtimber, Canada Timber, Japan Timber Products
Export Association, French Timber Trade Association, Swedish Forest Industries
Federation, Malaysian Timber Council (MTC) and the Association TechniqueInternationale des Bois Tropicaux (ATIBT) which is authorized by UN.
3.4 Key Factors in the Introduction of Forest Certification and Legality
Assurance Measures
Section 3.1 and Section 3.2 has discussed a lot in all aspects of forest certificationand timber legality and thus the introduction here can be streamlined as below.
3.4.1 Key factors in introducing forest certification147

As discussed above, the China Forest Certification Scheme (CFCS), which wasendorsed by PEFC earlier than the Japanese forest certification scheme (of the
Sustainable Green Ecosystem Council, SGEC), has been put into use and is now
operating normally. It can be said that the society’s awareness of CFCS has beensignificantly raised in recent years as the governmental departments intensify thepromotion of forest certification. Any company, when necessary, can apply for suchcertification to the 15 qualified certifiers for forest certification.
As for the necessity for a company to apply for forest certification, it is dependent on
the company itself, when considering:(1) If the company has practical needs, especially if the downstream buyers propose
special requirements towards forest certification (e.g. if the products will be sold to
USA and European countries)? This is the question of top priority for thecompany;(2) Analysis on cost-effectiveness? This is also an issue of priority for the company.
Usually, the cost-effectiveness analysis will turn out to be feasible when thecompany has practical needs in this regard. A simple reason is that, although thecertification will lead to added costs, the certified products can be sold at higher
price (i.e. premium price), or it is possible to increase sales volume or maintainsales volume while maintaining the original price;(3) Are the certified raw materials easily accessible on market? This may not be
regarded as a question in USA and European countries, but it is a challenge in
China in many cases. As above, many companies applying FSC certification havepassed the COC certification, however, they are confronted with such situations
where they receive no order for a certain period or there is suddenly an order but it
is difficult to buy the particular certified raw materials; and(4) Other considerations such as the company’s image, management capacity, etc.,
which are secondary in the discussion.
3.4.2 Key factors in introducing timber legality verification
As discussed above, the situation of timber legality verification is in contrast to forest
certification.
Although some companies apply the first-party due diligence (with external help insome cases), various overseas certifiers provide the third-party verification on timber
legality, and CNFPIA also carries out piloting work on timber legality verification,
generally, China has not yet established any third-party timber legality verification
system at national level and dominated by the government nor the second-party
system dominated by the private sector (certainly the government is now making
efforts to facilitate the multi-stakeholder cooperation).

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The principal factors holding up the establishment of China timber legality verification
system lie in two aspects, one is the necessary technology, and the other is thewillingness of companies and the business costs.
In general, Chinese enterprises are a bit reluctant to the timber legality verificationand they will not accept it until it becomes a must. All activities for verifying timber
legality, even the due diligence, involve increases of the companies’ business costs.
First of all, the core factor in adopting legality verification or not relies on thecompanies’ needs (e.g. if the products are exported). Specifically, if a company’s
products are to be placed on European and US markets, because of EU Timber
Regulation and the Lacey Act which have been in force, the company can only havethree choices: one is to apply the third-party (or second-party in few cases) timber
legality verification, the second is to establish a due diligence system as soon as
possible, and the third is to demonstrate the legality of its products or their low risks
through providing all related documentation.
Secondly, the establishment of a full-set management system, which is also in needof full-time management by professional employees, will definitely increase thecompany’s business costs. Costs needed in this regard are even higher when thecompany does not have competent capacity on its own. Therefore, generally,
enterprises are implementing such work in a passive way.

149

4. External Measures and Actions150

4. External Measures and Actions
4.1 Discussions on the Three Acts Focusing on Wood Legality
Three countries (or union of countries) have put forward legal requirements of wood
legality through legislation. They are:
(1) US Lacey Act entering into force on June 18, 2008;(2) EU Timber Regulation (EUTR) ratified in 2010 and entering into force on March 3,
2013; and
(3) Australian Illegal Logging Prohibition Act passed in November 2012 and entering
into force on November 30, 2014.
In terms of the intensity of their enforcement, currently EU Timber Regulation has thehighest intensity, followed by the US Lacey Act and the Australian Illegal Logging
Prohibition Act has the lowest intensity.
4.1.1 EU Timber Regulation
The EU Timber Regulation (EUTR) entered into force later than the US Lacey Act, but
it shows the highest intensity in its enforcement, because of the vigorous promotion(including financial support) by EU member countries such as UK who is the mostactive supporter on one hand, and the technical support provided by researchorganizations like the European Forest Institute (EFI) on the other.
According to EU Timber Regulation, anyone who place wood products on EU market
shall either hold a FLEGT license (and a CITES license as well), which can help in
direct customs clearance and entry into EU countries, or fulfill due diligence to prove
the low risks.
It should be noted that EU Timber Regulation has certain defects in its design andreasonability.
(1) The design defect is shown in FLEGT licensing. So far, six countries have signed
Voluntary Partnership Agreements (VPAs) with EU, among whom only Indonesia
has exported the FLEGT licensed wood products to EU countries until recently,
while the agreements with other five countries have not yet been executed forvarious reasons. The agreement with Ghana has expired long ago and there is nowish to renew it.
(2) The defect in reasonability appears in that the wood products which have passed
forest certification and hold certification labels are still required to fulfill due
151diligence (and they can not enjoy the direct customs clearance just like FLEGT
licensed products do). It is well known that forest certification is carried out by anindependent third party to certify the wood legality and the sustainability of forest
management, and both PEFC (and more than 30 national forest certification
schemes endorsed by PEFC) and FSC have been widely acknowledged in theinternational community.
However, undoubtedly, all countries especially the wood producing countries andprocessing countries have to abide by and adapt themselves to the regulation which
has been passed.
4.1.2 The US Lacey Act
The US Lacey Act is the first one, among the three acts, that got passed and thus
made a splash in the earliest time. In particular, the exports of forest products to USA
accounted for a very high percentage, and they involved a lot of trade frictions (e.g.
anti-dumping and anti-subsidy), so the Act aroused serious concerns of many
Chinese enterprises at first. For this, the governmental departments have madeenormous efforts through various activities (workshops, symposia, exhibitions), in
different occasions and in different forms to help companies to cope with it. For
example, they invited the US Department of Justice, US Forest Service andstakeholder NGOs to introduce and interpret the Act and had the industry
associations to provide guidance for involved enterprises.
Although the US Lacey Act provides very serious penalties, among which the mostserious violation may lead to a five-year imprisonment, the practical law enforcement
for more than 8 years shows that only very few cases have involved investigation andconsequent settlement (including conciliation). It can be said that the real function of
the US Lacey Act lies more in its cautionary nature.
In terms of its enforcement process, the Lacey Act requires for the place (or country)of origin in the documentation for customs clearance, in addition to the originallyneeded species, amount and prices. Of course, traders shall provide as many
documents as possible to demonstrate the legality or low risks of their wood sourcing.
It seems that currently many Chinese enterprises have been adapted to the Lacey
Act and very few effects are seen on China’s exports of forest products to USA.
However, a significant change has taken place specifically in the fast growths in
USA’s exports of logs and sawn timber to China, which is an indirect consequence of
the Lacey Act. It is simply because Chinese enterprises are encouraged to importlogs and sawn timber from USA due to the cautionary Lacey Act, and then theprocessed forest products are exported to US, whose country of origin is stated as
USA during the customs clearance in order to pass the investigation of US Customs
152easily. But of course relevant documentations are still needed, including those about
Due Care.
In an objective viewpoint, Uncle Sam is smarter than the European people in dealing
with the wood trade, namely the former introduced the cautionary Lacey Act but does
not adopt any severe punishing measures and thus does not offend any one country,
but it still has obtained its aim in a few years after the implementation with significant
increases of log and sawn timber exports (especially to China) as a consequence. It
is also supported by the fact that USA presents a subtle change in its attitude against
illegal logging under the APEC framework in the recent one to two years (less radical
and not as active as before).
4.1.3 Australian Illegal Logging Prohibition Act
The Australian Illegal Logging Prohibition Act is the latest one entering into force.
Especially, in comparison to USA and European countries, China exports fewer forest
products to Australia, and thus most Chinese enterprises have not yet experienced
the potential influence of the Act. For this, the discussion does not focus much on thisAct.
4.2 Measures and Actions Adopted by Governmental Departments
Section 3.1 has elaborated the 11 specific countermeasures and actions taken by the
Chinese governmental department against illegal logging. The first two measures are
adopted against domestic timber while the following 9 measures are addressing thedemand of international community, especially the three acts on wood legality.
In addition the exploration in section 3.1, specific pertinent measures and actions
adopted by the government in response to the three acts are summarized anddiscussed as below.
4.2.1 Cooperation with issuing countries of these laws in combating illegal
logging
As discussed in section 3.1, China has developed close cooperation covering a wide
range in the field of illegal logging with the issues countries of the three acts on wood
legality.
(1) China and EU established a Bilateral Coordination Mechanism (BCM) on Forest
Law Enforcement and Governance, under which an annual regular meeting is held
every year. In addition, practical and relevant project cooperation is also carriedout through the European Forest Institute (EFI), including numerous symposia,
training workshops etc.

153

(2) China and USA signed a cooperative agreement specifically on combating illegal
logging. Additionally, they included illegal logging into the high-level China-US
strategic economic dialogues and held inter-governmental meetings to discuss
illegal logging issues every year.
(3) A regular meeting mechanism for the China-Australia forestry working group has
been established. Illegal logging has been included into the working group’s
discussion in recent years. The two sides have convened a series of working
group meetings and related symposia.
4.2.2 Assistance in enterprises’ adaptation
As above, the governmental departments have made enormous efforts to introduce
and interpret EU Timber Regulation and the Lacey Act to Chinese enterprises andremind them of attention paid to the details in the two acts especially the specificrequirements about Due Care, e.g. through organizing various symposia, workshops
and exhibitions independently or in collaboration with Chinese and/or international
research and education organizations and other institutions, and providing help tocompanies for their adaption to the two acts through industrial associations.
Besides, the government is coordinating and integrating efforts made by researchorganizations, industrial associations, enterprises and all other stakeholders todevelop the Timber Legality Verification Standard of China as an industrial group
standard to be put into implementation.
Relatively, measures and actions in response to the Australian Illegal Logging
Prohibition Act are fewer, because the act entered into force in the latest time and inparticular, China exports much fewer wood products to Australia than USA andEuropean countries.
4.3 Measures and Actions Adopted by the Private Sector
Section 3.1 describes many concrete measures and actions taken by companies on
their own when discussing the government’s countermeasures against illegal logging.
For the private sector, when they are coping with illegal logging, they are actuallyadapting themselves to the requirements of the three acts towards legality of forest
products exported by them.
EU Timber Regulation and the Lacey Act have similar requirements toward wood
legality, so the measures and actions adopted by the private sector against them do
not vary much, namely companies dealing with exports of wood products to EU apply
alike measures and actions with those to USA. Although the Australian Illegal
Logging Prohibition Act does have many effects, the concrete countermeasures andactions are also alike.

154

4.3.1 Raw materials imported from low risk countries
Many Chinese enterprises, as a first choice, source raw materials like logs and sawn
timber from North American, European and Oceania countries with low risks in regard
to the legality of wood sources wherever possible, while avoid wood sourcing fromSoutheast Asia, Russia, Africa and other high-risk regions. The proportion ofcompanies doing so keeps increasing.
In particular, many small-and-medium size enterprises (SMEs) are relatively weak inbuilding and running their own due diligence systems, so the simple way to cope withsuch situation is to import logs and sawn timber from countries with low risks in termof wood legality wherever possible. This is also the cause for the fast growths in
USA’s exports of logs and sawn timber in recent years, as China is the major importerof its exported logs and sawn timber.
In addition, growths have also been seen recently in China’s imports of coniferous
logs from New Zealand, who once became the largest importer of softwood for China
by overpassing Russia. More than a decade ago, China imported a majority of thesoftwood from Russia, accounting for a half of the total imported logs (combining
broad-leaved logs) by China.
China imports a lot of wood chips for paper-pulp making from Australia.
4.3.2 Application of third party forest certification
The application of the third-party forest certification, currently mainly FSC certification
and a few PEFC (and CFCC) certification, can help place products on UAS and EU
markets as deemed to be low-risk. Now it takes up a certain part in the whole.
4.3.3 Application of third party legality verification
The third-party legality verification can directly prove the legality of wood products.
The application is still limited, but there is a large demand and thus it will grow fast.
For EU Timber Regulation, the three certifiers, BV, SGS and NEPCon, have been
accredited by EU. No certificate will be issued nor labeling will be done on products
after the verification, but a statement will be provided, so it can already meet EU
Timber Regulation’s requirements towards wood legality or low risks.
The US certifier, SCS has been working extensively for the Lacey Act. Its technicalrequirements do not vary much from other certifiers.
4.3.4 Application of second party legality verification

155

The participation in the pilot of second-party wood legality verification provided by
CNFPIA may directly demonstrate the wood products’ legality. But the system is stillin its pilot phase and although it has been piloted for several years, only 13
companies joined in, representing a very small percentage.
However, currently, the government is coordinating and integrating efforts made bymultiple stakeholders including research organizations, industrial associations andenterprises with an attempt to develop and provide the Timber Legality Verification
Standard of China at the soonest time, which will be then implemented as anindustrial group standard. By then, it is anticipated that more and more companies will
be involved in the second-party legality verification.
4.3.5 Establishment of first party due diligence system
The establishment of an in-company supply chain tracing and management system,or the company’s own first party due diligence system, takes up a large part in the
picture. It consists of two types of conducts:(1) For some large enterprises (around 20 in China), almost all of them haveestablished their own sturdy supply chain tracing and management systems (i.e.
the Due Diligence systems), thanks to their outstanding strengths in capital,technology and talents; and(2) For most of the SMEs, some of them build the due diligence systems on their own
and some do so with the external help. Generally, this conduct accounts for alarger proportion.
The implementation of due diligence is a learning course for Chinese enterprises,
which helps them understand about the international and domestic laws andregulations (especially EU Timber Regulation and the Lacey Act).
At present, many Chinese enterprises are keen on the due diligence, whilst whose
driving force is the requirements of wood products’ legality, it indirectly brings many
benefits for the private sector, mainly by urging the companies to improve their
management, including the standardized traceable system and labelling system,
covering raw material sourcing, classification during the production, output of wood
production, distinction of different products, product sales, documentation
management, and management of wood of difference species and/or from different
places of origins (especially imported timber).
It should be pointed out that the Chinese enterprises (perhaps also including foreigncompanies) do not attach as much importance to tree species as they do to the wood
quality. They often ignore the names of species and thus have no idea what species
is used in their finished wood products. Nonetheless, the Lacey Act has strict
provisions that the scientific names (in Latin) of tree species shall be provided,156

arousing the attention of the private sector. EU Timber Regulation is not lessdemanding in this regard.
4.3.6 Involvement in NGOs’ initiatives
The World Wildlife Fund for Nature (WWF) built up the Global Forest and Trade
Network (GFTN) long ago, which established a branch in China in 2005. GFTN
requires its members to carry out responsible procurement, namely purchase legal orsustainable raw materials only. GFTN examines and verifies the compliances of its
members. Most large enterprises or retailers in the world are GFTN members.
In China, some large companies engaged in flooring, furniture, plywood, wood tradeand forest management have joined the organization. Although the number of its
Chinese members is still small, the positive demonstration is presented thanks to the
influence of GFTN and the influence and large scale of these Chinese members.
In addition, the Forest Trust (TFT) of UK also asks its members to implement
responsible procurement and provides trainings and auditing service to this end.
Many Chinese enterprises are holding TFT membership.
4.3.7 Participation in relevant trainings(1) Various symposia and training workshops organized by governmental
departments, industrial associations and international organizations are
participated to understand the specific requirements of EU Timber Regulation andthe Lacey Act and information in relation with the legal wood sourcing and forest
certification.
(2) On-the-spot trainings organized by international buyers for Chinese suppliers are
participated actively.
4.4 Two Noteworthy Phenomena(1) Generally, either EU Timber Regulation or the Lacey Act is “much cry and littlewool”, namely despite their strict provisions, the enforcement intensity is quite low.
It is reflected in the fact that they do not impose many impacts on China’s (andother countries’) exports of wood products to EU countries and very few violatingcompanies really get punished. On one hand, the Chinese government, industrial
associations and especially the private sector are making enormous efforts whichhave helped actively cope with these acts’ requirements towards wood products’
legality. On the other hand, it shows that the enforcement intensity of the two acts
is relatively low. According to some studies, the performances of USA and EU
countries in assuring wood legality and implementing the due diligence/due caresystems are not very well, so they are not fully emboldened to put highrequirements on other countries.
157

(2) EU, as a union of states, is really big as a whole. But each member state is quite
small, especially in comparison to USA, and the individual market is small.
Chinese (also other countries’) private sector would focus on the large markets
such as the US market, resulting in that the demands of EU market towards wood
products are much more than the supplies which the Chinese companies arewilling to place on EU market. EU consumers pay much higher attention to thequality of wood products than to the wood legality, leading to such a fact that EU
buyers ask to have more imports of wood products from China. Based on such a
public opinion, it is natural that the enforcement intensity of EU Timber Regulation
is low.

158

Abbreviations
APEC
APFNet
ATIBT
BCM
BV
CAF
CCAA
CFCC
CFCS
CITES
CNAS
CNCA
CNFPIACOC
CSR
CTWPDA
DBH
DDS
DFID
EFI
EU
EUTR
FAO
FDI
FLEG
FLEGT
FM
FMU
FSC
GEI
GFTN
ILP
ITTO
IUCN
LHV
MDF

Asia-Pacific Economic Cooperation
Asia-Pacific Network for Sustainable Forest Management andRehabilitation
Association Technique Internationale des Bois Tropicaux(France)
Bilateral Coordination Mechanism on Forest Law Enforcement
and Governance (between China and EU)
Bureau Veritas
Chinese Academy of Forestry
China Certification and Accreditation Association
China Forest Certification Council
China Forest Certification Scheme
Convention On International Trade In Endangered Species
China National Accreditation Service for Conformity
Assessment
Certification and Accreditation Administration
China National Forest Products Industry Association
Chain of custody
Corporate social responsibility
China Timber and Timber Products Distribution Association
Diameter-at-breast-heightDue diligence system
Department for International Development (UK)European Forest InstituteEuropean Union
EU Timber Regulation
Food And Agriculture Organization Of The United Nations
Foreign direct investment
Forest Law Enforcement and Governance
Forest Law Enforcement, Governance and Trade
Forest management
Forest management unit
Forest Stewardship Council
Global Environment Institute
Global Forest and Trade Network
Illegal Logging Prohibition
International Tropical Timber Organization
International Union for Conservation of Nature
Legally harvested verification
Medium density fiberboards
159

MLTV
MOFCOM
MOU
MTC
NGO
NWFP
OLB
PEFC
RPP
SAC
SFA
SGEC
SME
STTA
TFT
TLAS
TLTV
TRAFFIC
TTF
UK
UNFF
US
USA
VLC
VLO
VPA
WB
WFP
WTO
WWF

Mandatory legal timber certification
Ministry of Commerce
Memorandum of understanding
Malaysian Timber Council
Non-government organization
Non wood forest products
Origin and legality of timber
The Programme of the Endorsement of Forest Certification
Responsible purchasing policy
Standardization Administration of China
State Forestry Administration
Sustainable Green Ecosystem Council (Japan)
Small-and-medium size enterprise
Shanghai Timber Trade Association
Tropical Forest Trust
Timber legality assurance system
Timber legality and traceability verification
Trade Records Analysis of Fauna & Flora in Commerce
Timber Trade Federation
The United Kingdom
United Nations Forum on Forests
The United States
The United States of America
Verification of legal compliance
Verification of legal origin
Voluntary partnership agreement
World Bank
Wood-based forest products (or timber products, or timber)
Word Trade Organization
World Wild Fund For Nature160

林野庁委託事業
平成 28 年度
違法伐採対策取組強化事業
Timber Industry, Timber Trade and Timber Legality in China
中国における木材、木材製品の合法証明の確立に関する動向調査 報告書（英語版）
2017（平成 29）年 3 月

一般社団法人全国木材組合連合会〒100-0014

東京都千代田区永田町 2-4-3

永田町ビル 6 階TEL：03-3580-3215 FAX：03-3580-3226
URL： http://www.zenmoku.jp