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US
Dollar Exchange Rates of 13th Aug. 2006
China Yuan
7.949
Report from China
Germany opens doors for Chinese forestry firms
In 2003, China¡¯s forestry firms contracted several forest areas in Germany and exported back about 50,000 m3 of
timber (worth $7.5 million) to China. Since then, more Chinese firms have come to Germany to acquire logging
rights. The timber are being used by the Chinese furniture
industry with the products being sold in Europe and China. Mr. Zhang, manager of one of the Chinese firms, sees a
number of advantages in this strategy. Firstly, German policies for forestry management operators are
favourable. Forestry firms do not pay value-added taxes and may even receive subsidies in some states. Secondly, infrastructural
facilities and transportation are well developed in the forest regions. Third, high quality and precious hardwood
species such as beech and oak are found in German forests.
Some NGOs and media have rebuked China further increasing demand for timber, but an officer from the
German forestry administration regards that as a prejudice. He says that these kinds of arrangements were proved to
be a win-win situations as long as firms do not break country laws, which have proved to be. He points out that
German forest cover was 31% of land area, with 10.7 million ha of forests suitable for timber production. He
assures that Germany is a reliable, long-term and potential timber supplying country and invites more Chinese firms
to come to the country to do business.
China to establish wood processing zone in Russia
China¡¯s will establish its first wood processing zone in Russia, following an agreement between 18 wood
processing firms from Wenzhou, China and the Russian government. The zone of 1.5 million m2 will involve an
investment of about $80 million. The firms will mainly produce sawnwood, finger jointed timber and medium and
high density fibreboard. The project is one of China¡¯s six foreign industrial zones being supported by the
government. The Chinese Ministries of Commerce and Finance have provided 200 million yuan ($25 million) as
counterpart contribution to finance the 18 firms.
Furniture firms prepare for anti-dumping case
As reported earlier (see TTM 11:5), European furniture manufacturing companies in Germany and Italy are
preparing to file an anti-dumping complaint to the European Commission, alleging that China has been
selling upholstered sofas, kitchen and office chairs and other types of seats at below domestic prices. This
included rattan, metal, glass furniture, office and solid furniture. If filed, this would be the largest European antidumping
case against China.
China became the world¡¯s largest furniture exporter in 2004 and about 40% of the exports have come from
Guangdong. Due to the possible impact of the case on this province, Guangdong¡¯s General Chamber of Commerce
and Guangzhou City¡¯s Furniture Association jointly held a
¡°Seminar on Responding to European Furniture Anti- Dumping Investigation¡± recently to raise awareness
among Guangdong furniture exporting companies. The seminar discussed strategies to help companies enhance
their capability of responding to anti-dumping accusations and preparing replies to the investigation.
China raises taxes to cool land sales down
China will sharply raise fees and taxes related to land sales, according to the Ministry of Land and Resources.
The move could increase prices of some industrial land by 40% to 60%, according to some analysts. The report
comes after the State Council (Cabinet) issued guidelines calling for stricter curbs on land use and an increase in
fees and taxes on land used for construction in order tocontrol investment. The land-use fee for new construction
projects would be doubled and fees paid by developers to compensate tenants facing relocation would also be
doubled. Taxes on urban land would be tripled.
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