US Dollar Exchange Rates of 15th December 2008
China Yuan 6.8492
Report from China
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Export rebate rate rises again
The Notice on Increasing the Export Tax Rebate Rates for
Labor-Intensive Products was announced jointly by the
Ministry of Finance and the State Administration of
Taxation on 17 November 2008. A list of 3,770 items is
included in the third export tax rebate increase this year as
part of the government¡¯s RMB4 trillion yuan (USD571.4
billion) economic stimulus package. The items include
labor-intensive, mechanical and electrical products. The
export rebate rate for plywood rose from 5% to 9%.
The change will be effective as of 1 December 2008.
Local experts think that the adjustment of export tax rebate
rates for labor-intensive products is helpful to relieve the
tension of export-oriented enterprises¡¯ shortage of capital
and the pressure on labor-intensive export-oriented
enterprises.
China releases 2009 timber production plan
China¡¯s annual timber production plan for 2009 was
published by the State Forestry Administration on 4
November 2008. Under the plan, 158.57 million m³ of
timber will be logged and timber output will be 100.39
million m³. The three provinces with the highest logging
volume and timber output are: Guangxi Province (19.91
million m³ of logging volume, 13.13 million m³ of
outputs); Fujian (17.43 million m³ of logging volume,
12.06 million m³ of outputs) and Hunan (15.16 million m³
of logging volume, 9.703 million m³ of outputs). The
logging volume and timber outputs of these three
provinces make up 33% and 35% of the national total,
respectively.
China¡¯s furniture enterprises generate 210 billion yuan
It has been reported that China¡¯s furniture enterprises
generated RMB210 billion yuan during January to
September in 2008, up 21% over the same period in 2007.
The total value of furniture exports rose 23% to USD19.8
billion. The volume of wooden furniture exports fell 9%
but the value of the wooden furniture exports rose 6% over
the same period. The value of furniture imports grew 22%
to USD945 million. In general, the growth rate of China¡¯s
furniture industry was faster and its structure was
optimized gradually.
Local experts predict that the total output value of China¡¯s
furniture will exceed RMB600 billion yuan and the value
of furniture exports will be USD26.6 billion. Currently,
China furniture production makes up 25% of the world¡¯s
total, its furniture exports account for 23% of the world¡¯s
total and it has been the major producer and exporter of
furniture in the world. However, potential problems exist
in China¡¯s furniture industry such as rapid enterprise
investment, unreasonable production structure, over
capacity of production, severe similarity in design and
style and deficiency in innovation capabilities.
Log imports fall through Jiangsu Port as prices rise
According to statistics from Nanjing Customs, log imports
through Jiangsu Port in the first three quarters of 2008 fell
8.3% to 5.65 million m³ and were valued at USD1.25
billion (up 1.2%) from the same period in 2007.
Log imports through Jiangsu Port were mainly from Papua
New Guinea, African countries and Russia. Log imports
through Jiangsu Port from Papua New Guinea, African
countries and Russia fell 4% to 1.74 million m³, 25% to
1.26 million m³ and 16% to 1.12 million m³, respectively.
Log imports from these three regions accounted for 73%,
down 5 percentage points from the same period in 2007.
Average prices for imported logs rose about 8% to
USD220.5 / m³ in the first three quarters of 2008.
According to local analysts, there are two main reasons for
the decrease: first, major exporters of logs such as Papua
New Guinea and others in Africa have developed log
export ban policies; and second, Russia has increased its
log export tariff to control log exports.
Jiangshan City recognized as capital of wooden door production
Jiangshan City has been awarded the title ¡®Capital of
China¡¯s Wooden Doors¡¯ by the China Timber Circulation
Association. The wood products industry in Jiangshan
City has developed rapidly in recent years. There are more
than 1,170 enterprises in the city with a total of 30,000
employees and 100 wood products from six major
categories: wood-based panels; wooden doors; furniture;
charcoal; wooden products; and chemical processing of
forest products. In the first three quarters of 2008, the
output value of the city¡¯s wood products industry was
RMB3.9 billion yuan and annual output value was
expected to be RMB5 billion yuan. There are more than 60
enterprises manufacturing wooden doors with an annual
production of 4 million sets valued at RMB1.6 billion
yuan. Wooden doors have dominated the markets in areas
south of the Yangtze River. Over 50% of wood products
from the city are exported to other countries.
Updated trade figures for China¡¯s wood products during January to September 2008
The following discussion provides updated statistics for
China¡¯s wood products trade during the first three quarters
of 2008, as first reported in TTMR 13:21.
1. The value of China¡¯s imports and exports grow while
growth rates fall markedly
According to the latest statistics from China¡¯s Customs,
foreign trade of China¡¯s major wood products continues to
grow rapidly in the first three quarters of 2008. However,
the growth rate fell dramatically due to the global
economic slowdown. The statistics show that the total
value of imports and exports for China¡¯s major wood
products rose 13.5% to USD48.181 billion, dropping 18.4
percentage points over the same period in 2007. Of the
total, the value of imports for China¡¯s major wood
products grew 20% to USD21.383 billion and the value of
export for China¡¯s major wood products rose 8.7% to
USD26.756 billion, dropping 7.5 percentage points and
26.5 percentage points respectively. The trade surplus of
wood products reached USD5.38 billion, dropping 21
percentage points from the same period in 2007.
2. Prices for major wood products show upward trend
Wooden furniture, paper products, plywood, paper and
paper board and wooden products have been China¡¯s
traditional exported wood products for many years. During
the first three quarters in 2008, the value of exports for
these five major commodities made up 72% of the national
total. However, during January to September 2008 the
export volume for wooden furniture fell and export value
rose for paper products, plywood, paper and paper board.
Both export volume and value fell for wooden products
(shown in Table 1).
Table 1: Comparison of China¡¯s wood products exports, January to
September 2007 and 2008 (Note: wooden products includes wooden
doors and windows, composite wood floorings, wooden kitchen
appliances, wooden arts and crafts and all kinds of small wooden
products. Whole wood products include small non-wood products that
have an export value worth 13.5% of total national exports.)
The above-mentioned trend is unfavorable for the
sustainable development of China¡¯s forestry industry. A
considerable number of small and medium scale
enterprises could be forced to stop production or shut
down, which would result in mass unemployment and
affect social stability in China. The productive capacities
of China¡¯s furniture and wood-based panels have exceeded
demand due to the rapid development of these two
industries. One third of furniture products are exported to
foreign countries. The productive capacity of national
middle density fiberboard industry is about 40 million m³
per year, but domestic demand is only around 25 million
m³ per year. Under the circumstances, if export volume of
these products fell sharply, not only in these industries but
also upstream, this would exacerbate poverty and income
of farmers, particularly in mountainous regions.
3. Log imports continue to fall but sawnwood imports
jump
During January to September 2008 China¡¯s log imports
were 23.14 million m³ and valued at USD40.58 billion,
down 19% by volume and 0.3% by value over the same
period in 2007. In the meantime, sawnwood imports
further increased, amounting to 5.23 million m³ by volume
and USD1.5 billion by value, up 8% and 14% by value,
respectively. The main reasons are: 1) the growth rate of
imported log prices was higher than that for imported
sawnwood prices, with imported log prices rising on
average 24% and imported sawnwood prices growing only
5.6% from 2007 levels; and 2) domestic demand for logs
was weak due to the global financial crisis.
4. China¡¯s log imports from countries in Oceania rose
markedly
During January to September of 2008, China¡¯s imported
logs from Russia were 14.76 million m³ and valued at
USD1.99 billion, down 26% by volume and 2.8% by value
from the same period in 2007. The main reason for the
decrease in log imports was the dramatic unit price rise for
imported logs after the Russian government hiked its
export tariff on logs. The unit price for logs rose 30% to
USD134.8 / m³ from USD103.38 / m³ over the same
period of 2007. It is predicted that China¡¯s log imports
from Russia will further drop if Russian log export tariff
increases to 80% in 2009.
However, China¡¯s log imports from countries in Oceania
grew. During the first three quarters of 2008, China¡¯s log
imports from New Zealand rose 33% to 1.25 million m³.
In the meantime, the proportion of China¡¯s log imports
from New Zealand grew to 5% from 3% in the same
period of 2007. New Zealand jumped to being the third
largest supply country after moving from fourth place
during the same period of 2007. China¡¯s log imports from
the Solomon Islands rose 16% to 894,100 m³. The
proportion of China¡¯s log imports from the Solomon
Islands grew to 3.9% up from 2.7% in the same period of
2007. Solomon Islands jumped to fourth position from
sixth place in 2007. Papua New Guinea continued as the
second largest supply country, although China¡¯s log
imports from Papua New Guinea fell slightly (4%) from
the same period of 2007. China¡¯s log imports from Papua
New Guinea grew 1.3 percentage points from 6.5% to
7.8% during the first three quarters in 2008.
5. China¡¯s wood products are highly processed
China¡¯s trade has had a large focus on wooden products
and processing of finished products for a number of years.
During January to September 2008, the value of imports
for log, sawnwood, paper pulp, waste paper and paper
products made up about 95% of the national import total.
The value of exports for wooden furniture, wooden
products, paper products and plywood accounted for 87%
of the national export total for wood products.
In the first three quarters of 2008, the top five wood
products were raw materials or semi-finished products:
paper pulp, waste paper, log, paper and paper board and
sawnwood. The value of imports for these five products
made up 85% of the national import total for wood
products. The value of exports for wooden furniture, paper
products, plywood, paper and paper board and wooden
products accounted for 72% of the national export total.
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