• China

Legal framework for forest management and timber trade of China

Forest governance

National Forestry and Grassland Administration (NFGA), which belongs to the Ministry of Natural Resources of the People's Republic of China, is the central agency responsible for China’s forestry and grassland activities. Formerly, this agency was known as the State Forestry Administration (SFA). The NFGA is responsible for policy making, plantation establishment, conservation and wood industry management. The NFGA is also leading China’s international efforts to fight illegal timber and associated trade from and to China, together with the Ministry of Commerce, Ministry of Foreign Affairs and Ministry of Customs. Also, there are local forestry bureaus at the provincial/municipal/county level, responsible for regional forestry activities located in different cities, which are subject to the NFGA.

At present, the main forest codes in effect are the “Forest Law of The People's Republic of China (2019 Amendment)”, adopted in 1984 and most recently revised in 2019, and the “Regulation on the Implementation of the Forestry Law of the People's Republic of China (2018 Revision)”, which entered into force in 2000 and was most recently revised in 2018. The latter will be further revised in 2020 based on the revised Forest Law (2019).

China’s 13th Five-Year Plan (2016-2020), 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)

Legal rights to harvest

As required by the Forest Law, timber harvesting requires a valid Forest Authority Certificate or Forest Tenure Certificate, stating who has the authority over the forest. One of the key documents for harvesting is the valid Forest Harvesting Permit (“Wood Harvesting Admission Certificate”) which is in accordance with the State Council approved Annual Allowable Logging Quota. For companies renting forest land for forest management a Forest Land Contract is required in addition to the certificate mentioned above. Converting forest land to other use (usually for construction) is under the strict control by the government. Forest land that is to be converted should not exceed the annual government quota, and the organization should have an official approval document permitting conversion of land use, issued by the relevant Forestry Administration.

Taxes and fees

No taxes and fees have to be paid to the national or local government in order for companies to manage and harvest forest resources, except in case of forest land conversion for which a forest recovering fee applies. The company should pay value added tax where appropriate.

Timber harvesting activities

In China, the precondition of timber harvesting activities is to obtain a Harvesting Permit which complies to Annual Allowable Logging Quota approved by the government. The Forest Tenure Certificate and Logging Operation Design are required as well to apply for the harvesting permit.  All the activities must comply with or not exceed the limitations or requirements on the Permit, such as harvesting species, area, quantity, size, etc. Logging records and harvest volume records (consistent with Logging Operation Design and Harvesting Permit) are required.

Third parties’ rights

There are no legally required documents or records regarding customary right, free prior and informed consent, and indigenous people’s rights in China. Once a forest-related issue occurs, local government solves these problems based on laws or regulations, such as Forest and Forest Tree Tenure Disputes Settlement Measure, Villager Committee Organization Law of P.R. China, People's Mediation Committee Organization Regulation, Constitution of the People's Republic of China, and Regional Ethnic Autonomy Law of P. R. China.


Trade and transport

The timber processing company must hold a business registration certificate indicating that it is legally registered in accordance with the law.

For export or import of timber, validity of the documents and certificates needs to be ensured and therefore endorsement by relevant authorities is required, including a 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.

Furthermore, the Forestry Law and the Wild Plant Protection Regulation have some provisions on the protection of rare and endangered wildlife species.  As one of the parties to CITES Convention, China also applies these laws for CITES species protection, which requires Collective permit for national or local key protected plants and CITES import/export permission certificate.