China and the Global Market for Forest Products

Transforming Trade to Benefit Forests and Livelihoods

China’s spectacular economic growth over the last decade is having a dramatic impact throughout the world. It has become a leading nation in terms of its demand for forest products, and its influence is being felt as far afield as Cameroon and Cambodia, Indonesia and the United States.1 Burgeoning domestic consumption, in a nation with very limited per capita forest resources, has fueled the rapid rise in China’s imports of forest products. Growing demand in the US, Europe and elsewhere for low-cost wood products manufactured in China has also contributed to the country’s ever-increasing demand for foreign timber. China has rapidly become the wood workshop of the world, capturing almost a third of the global trade in furniture over the last eight years.

In many supplier countries, particularly those with weak governance records, the increasing trade flows into China are associated with unsustainable harvesting, illegal logging and the abuse of forest communities’ rights.  However, China’s growing demand also creates the possibility that millions of low-income forest producers can benefit from this new market. Trees and forests are the primary asset of millions of the world’s poorest people and when governments enable the poor to use them wisely, they can be an important instrument of rural development.

China is now in the world’s spotlight, with governments, industry and development agencies eager to learn more about the global impact the country is having on forests and forest industries. Until recently, they have been hampered by a scarcity of reliable information and a lack of rigorous, publicly accessible analysis of macro-level trends. The primary source of market information to date has been proprietary analysis, the costs of which have precluded their use by all but the largest international investors and trade associations.

This paper and the body of research it represents aims to help fill the knowledge gap. It is an overview of the key findings of many research studies conducted by Forest Trends, the Center for Chinese Agricultural Policy (CCAP), the Center for International Forestry Research (CIFOR) and their many partners in China and the Asia-Pacific region. As an overview, it necessarily focuses on broader and more globally critical issues. We encourage readers interested in this topic to consult the background documents that are the basis for this report. They are listed in the annex and available on the Forest Trends website (www.forest-trends.org).

The synthesis of this research presents a wake-up call for the global forestry community. One of our key findings is that domestic and export demand for Chinese manufactured wood products will continue to grow dramatically, at least over the medium term and probably well beyond. So, in turn, will the demand for both home-grown and imported timber. Furthermore, China should be seen as the harbinger of even greater change, as India and other populous developing countries increase their demand for forest products.

It is now clear that the global forest market is undergoing dramatic changes, and that these changes have important implications for forests, forest people and industry globally. We hope this paper helps governments; industry and civil society gain a clearer understanding of their respective roles in the global timber market. It is also hoped that it will help them to take an important leadership role in helping to transform the forest products market to one that not only ensures sustainable forestry and conservation, but to one that provides satisfactory livelihood opportunities for forest dependent communities, and promotes sustainable economic development for all nations.

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