According to FAO Global Forest Resources Assessment 2015, China has around 208 million hectares of forest land, which constitutes to 22% of the total land area. Forest land cover in China has grown for the last 25 years, with a gain of around 1.1% forest cover per year, as a result of the Natural Forest Protection Program, which reduced timber production from natural forests, together with a tree planting programme. (FAO + TFT).
Around 11.6 million hectares (5.6%) are primary forest, 117.7 million hectares (56.5%) are ‘otherwise naturally regenerated forests’, and the remaining part of almost 79 million hectares (38%) is planted forest. The ten most important tree species (groups) from natural forests are Quercus, Betula, Larix gmelinii, Pinus massoniana, Pinus yunnanensis, Picea asperata, Abies fabri, Cupressus funebris, Cunninghamia lanceolata and Pinus densata.
China has now the largest plantation area in the world, principally of fast-growing species. The top ten tree species in the Chinese forest plantations are Cunninghamia lanceolata, Populus, Eucalyptus, Larix gmelinii, Pinus massoniana, Pinus tabuleaformis, Cupressus funebris, Pinus elliottii, Robinia pseudoacacia and Quercus.
China currently has the highest afforestation rate of any country in the world, increasing its forest cover from 12% thirty years ago to more than 21% in 2013. The country is continuing to implement policy measures to increase the quality and quantity of its forests and aims to bring forest coverage to 23%, or 223 million hectares, by 2020. China's State Forest Administration (SFA) optimistically expects domestic timber supply to rise from 180 million m3 /annum in 2010 to reach 300 million m3/annum in 2020, whilst at the same time it also anticipates that industrial demand (not including private use or fuel wood) will increase to 467 million m3 /annum (excluding recovered paper), leaving a deficit of 167 million m3/annum. However, ITTO reported the deficit had reached 150 million m3 in 2011 and believes the gap has grown to over 180 million (roundwood equivalent) by 2015.
Ownership of China’s forestland is divided between the state (42,5%) and collectives (57.6%), whilst the ownership of commercial growing stock for production purposes is 42.2% state-owned, 37.5% collective-owned and 20.3% privately-owned. State-owned forests are principally located in the Northeast and Southwest and are primarily managed by either state-owned forestry enterprises or state forest farms, while collectively-owned forests, mainly plantations, are situated in the south (TFT). In some cases, overlapping land ownership can lead to a complex land tenure situation, laying a foundation for land related conflict and confusion as well as conversion of natural forest to plantations.
According to Article 4 of the Forestry Law, Chinese forest stands are classified in the following categories:
- Timber stands (35.2%): forests and trees mainly at timber production, including bamboo groves
- Protection forests (45.6%): forests, designated for protection, inclusive of forests for water and soil protection, wind protection and farmland and forestland protection
- Forests for special uses (7.5%): forests designated for national defence, environmental protection and scientific experiments
- Fuel wood forests (0.9%): forests designated for production of wood-based fuel.
- Economic forests (10.8%): trees mainly aimed at the production of fruits, edible oils, soft drinks and ingredients and medicinal ingredients.
Production and export
In order to meet this domestic and export-oriented demand, huge amounts of raw wood materials must be either produced domestically or imported from abroad. Domestic supply of industrial wood has failed to keep up with China’s industrial manufacturing capacity due to a low level of per-capita forest resources and the government’s policies on the protection of natural forests. To meet the wood supply deficit in the country, China has become the world’s largest importer of timber.
The reduction in housing construction in China has resulted in a substantial decline in the importation of forest products during 2015, reports the Wood Resource Quarterly (WRQ). The total value of imported softwood logs and lumber has fallen 25% and import prices have declined almost 30%. This has been a consequence of the slowdown in the Chinese economy, which has not only reduced construction activities but also consumer spending on home remodelling and furniture.
Primary timber products are mainly processed and consumed within the country, as can be observed from the table below (source: FAOSTAT, data 2014).
The principal exported primary timber product is plywood, and to a much lesser extent sawnwood and veneer. The main products China exports are processed products, particularly wooden furniture, plywood, joinery and paper. No exact statistics on total number of wood processing mills in China exists. It is reported that China wood industry consists of 100,000 individual companies, and most of them are small and medium sized enterprises (SMEs). Data from China Forest Industry Association show that there are more than 6,000 plywood manufacturers, more than 10,000 veneer mills, and 650 particleboard mills. National Economic Census showed China has 25,000 furniture manufacturers, while China Furniture Association says the number could be doubled if small mills were counted. More than 50% of China’s wood products manufacturers are privately owned (EFI, 2011). The industry has developed particularly in and around the ports of Zhangjiagang, Shanghai, Shenzhen, Lianyugang and Nanjing.
The wide range of export destinations of the Chinese wood products industry can be observed from the graph below, although USA and Japan are the most important ones.
Sources of information
- National Forest Inventory (NFI) China
- China - WhatWood News & Analytics
- FAO Global Forest Resources Assessment 2015
- Hardwood Timber Supply & Demand in Asia: An Opportunity for Hardwood Plantation Investment V1.2, New Forests - September 2012
- ITC (International Trade Centre) calculations based on UN Comtrade statistics
- ITTO (2015) Biennial review and assessment of the world timber situation 2013-2014.
- ITTO, Tropical Timber Market Report, Volume 19 Number 7, 1st – 15th April 2015
- PEFC Global certificates - December 2015
- Risk tool of the Forest Legality Alliance (WRI)
- TFT (2007) China Wood Products Supply Chain Analysis
- TFT Country guide to timber legality: China
- World Port Source - Map of ports in China with container liner service.
- Risk tool of the Forest Legality Alliance (WRI) http://www.forestlegality.org/risk-tool/country/china-0
The State Forestry Administration (SFA) is the central agency responsible for China’s forestry activities, under the State Council. The SFA is responsible for policy making, plantation establishment, conservation and wood industry management. The SFA is also leading China’s international process against illegal timber and associated trade from the country, together with the Ministry of Commerce, Ministry of Foreign Affairs and Customs.
The national Forest Law has been in place since 1984, and was most recently revised in 1998. China’s 13th Five-Year Plan, announced in May 2016 sets out binding economic and environmental targets that include:
- Increasing total forestland coverage (to 23.04%)
- Increasing nature reserve area (to 17% of the total land area)
- Increasing forest stock volume (to 16.5 billion m3)
As required by the Forest Law, timber harvesting requires a valid Forest Authority Certificate or Tenure Certificate stating who has the authority over the forest (in case it is not the Chinese State). One of the key documents for harvesting is the Timber Harvesting Licence (“Wood Harvesting Admission Certificate”). For conversion into deforested land (usually for construction) the companies should also have an official approval document permitting conversion of land use, issued by the relevant Forestry Administration.
Companies are liable to pay taxes to national or local government (or both) to authorize their management and harvesting. The company should pay value added tax where appropriate.
Transport of timber is also subject to regulation. Timber carriers / hauliers must have a valid timber transportation certificate giving details of what is being transported, its origin and destination. Each timber transport must be accompanied by a Plant Quarantine Certificate. The timber processing company must hold a business registration certificate indicating that it is legally registered in accordance with the laws. The timber processing company (located in the forest area) must also be able to show a valid Timber Processing Certificate.
For export of timber, validity of the documents and certificates needs to be ensured and endorsement required by relevant authorities as appropriate, to include packing list, Invoice, bill of lading, customs declaration form, receipts of appropriate tariffs, sales contract, shipping order, verification form of inward remittance (by Exchange Control Administration) and delivery order. Related documents and certificates should be submitted by the import and export company as per pertinent laws and regulations. Official receipts should be available for audit.
The Chinese government controls the legality of domestic timber. Most stakeholders will comment that the Chinese laws are reasonably appropriate and adequately enforced. Documentation at district levels of source of origin of Chinese timber still poses some difficulties for some manufacturers, and manufacturers complain of the complexities and extra cost of implementing the extra due diligence requirements.(Baseline study China)
The below listed key documents are based on the applicable legislation and are considered to play a key role in demonstrating legal origin. The full list of applicable legislation is accessible from the Forestry Legality Alliance website (http://declaration.forestlegality.org/risk-tool/countries/544/laws). A list of necessary documents can be found here. The following overview gives important documents necessary for forest product exporters from China.
Processing and Trade
Bans and quota
China is planning to ban commercial logging in all natural forests by the end of 2016 in an extension of an ambitious program which was started in 1998 and whose purpose is to allow forests to recover from decades of over-logging and to help restore forest ecosystems and their resilience.
In 2014, the State Forestry Administration (SFA) launched a trial ban on commercial logging in state-owned natural forests in Heilongjiang Province, which has historically produced over 30 percent of China’s domestic log supply. Based on the results of the Heilongjiang trial, the SFA further expanded the trial ban to natural forest areas in other Northeast provinces starting from April 2015, and to the whole country by 2017.
The newly released China’s 13th Five-Year logging quota (2016-2020), which shows a logging quota of 254.036 million m3 for 2016-2020, reveals a 6.3% drop compared to 2010-2015 and shows that logging ban has been effectively enforced. A closer look at the logging quota for each province, particularly with an eye to plantations and natural forests, shows that there is no quota for commercial logging in natural forests nationwide.
Cites and protected spieces
There are no tree species found in natural forest in China covered by CITES (Appendix I, II or III).
China halts timber imports from 3 countries
On 8 April 2015, China’s National Endangered Species Office issued a directive suspending imports of CITES listed timber species (Pericopsis elata) and (Dalbergia cochinchinensis) from the Democratic Republic of Congo (DRC) and Laos. This restriction follows a directive from CITES Secretariat recommending all signatory countries to suspend trade in CITES-listed species from the DRC, the Lao People’s Democratic Republic and Nigeria until further notice due to the failure of these three countries to submit a National Ivory Action Plan.
National action on timber legality
The project on developing Chinese National Timber Legality Verification system was launched in December 2009 with the help of DFID, connecting China with UK and EU experience. It aims to develop a cost efficient legality verification system which is adapted to Chinese context, and could possibly develop to endorse wood products labelled under robust legality or certification standards from other importing countries, e.g. license issued by Indonesian Timber legality Assurance System (TLAS), VPA licenses, FSC certificates of forest certification or timber legality verification.
China has no Voluntary Partnership Agreement (VPA) with the EU, although the EU and SFA agreed to establish a Bilateral Coordination Mechanism (BCM) on FLEGT in January 2009. One of many tasks listed is to explore opportunities for EU and China to develop a shared approach towards legality verification schemes for timber and timber products implemented by timber exporting countries, including in the context of FLEGT VPAs. The BCM experts committee which consist of experts from both China and EU have drafted the work plan later 2009 for both Chinese and EU governments to consider.
Other national action of China has been the development of a National timber tracking system. The China Timber and Wood Products Distribution Association (CTWPDA) has announced that a National tracking, inspection and labelling system for wood products has been officially launched (April 2015) and that certificates of compliance have been issued to some enterprises using the system. Details of the tracking certificates which have been issued to the participating enterprises can be found on the CTWPDA website which at present is only in Chinese. The system covers wood-based panels, flooring, wooden doors, furniture, engineered wood, treated logs and redwood products.
Third party certification
In October 2007, China issued its own forest certification standards (CFCS – China Forest Certification System), followed by a number of pilot projects to test such standards. The pilot includes forest management, chain of custody, non-timber forest products (NTFP), bamboo, production management of rare and endangered species, forest ecological environmental services, and other fields. In February 2014, the China Forest Certification Scheme (CFCS) achieved endorsement by PEFC. The PEFC statistics March 2016 report a total area under certification amounting to 5,620,093 ha and 269 CoC certificates.
The FSC China National Initiative was launched in March 2006 to develop forest certification standards compatible to forest conditions in China. In June 2016, the country was reported to have 892,508 ha of FSC-certified forests. Chain-of-Custody (CoC) certification has grown even faster (4,472 in June 2016).
Besides these major initiatives there is also a valid SCS Legal Harvest certificate in China.
Sources of information
- CITES database
- EFI (2011) Baseline study 1 - China: Overview of Forest Governance, Markets and Trade.
- Forest Trends - China's logging ban
- FSC report “Facts & Figures” – June 2016
- ITTO, Tropical Timber Market Report, Volume 19 Number 7, 1st – 15th April 2015.
- PEFC Endorsed national standard - China
- PEFC Global certificates – March 2016: http://www.pefc.org/images/documents/PEFC_Global_Certificates_-_March_2016.pdf
- SCS LegalHarvest Verification (LHV)
- WWF GFTN & TRAFFIC Framework for Assessing Legality of Forestry Operations, Timber Processing and Trade Annex - China
- WWF GFTN Guide to legal & responsible sourcing - China
- CITES: https://cites.org/eng/app/E-Apr27.pdf
GFTN-China is the Chinese chapter of WWF's Global Forest & Trade Network (GFTN), WWF's initiative to eliminate illegal logging and improve the management of valuable and threatened forests.
Source: Transparancy International