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China is now the world’s largest importer and consumer of wood-based products. Its booming domestic market is the main driver of growth in imports, though the country is also now the world’s most important timber-processing hub. In 2013, China’s imports of timber-sector products were 94 million cubic meters, more than three times what they were in 2000, while exports were 53 million cubic meters, almost five times what they were 13 years earlier.
This shift in global demand has inevitably been mirrored by a change in patterns of supply. Timber exports from nine key producer countries included in a new Chatham House report nearly tripled between 2000 and 2013, to 32 million cubic meters. Exports to China now make up 23 percent of the combined total from these nine countries, up from 10 percent in 2000.
These changes are not just significant for China and its suppliers. They are having knock-on effects throughout the global market. Perhaps most importantly, the increased importance of China means so-called sensitive markets, such as the E.U. and U.S., are less important for producers, and their progressive policies are less influential.
For example, between 2000 and 2013, the proportion of Ghana’s exports to the E.U. and the U.S. declined from 75 percent to 35 percent, while shipments to China rose from 1 percent to 20 percent. Over the same period, the proportion of Cameroon’s exports to the E.U. declined from 70 to 40 percent, while exports to China rose from 5 to 40 percent.
China has less stringent controls on imports than most western countries, and limited incentives in place to encourage sustainable sourcing. The result is that global progress in tackling illegal logging has slowed down. Indeed, the total volume of illegal timber imports into 10 key processing and consumer countries actually increased by 10 million cubic meters between 2000 and 2013, to 60 million cubic meters—a rise of nearly U.S.$8 billion (49.64 billion yuan) in value terms.
Nearly all of this increase was accounted for by the rise in illegal imports to China, which almost doubled in volume over this period. India and Vietnam also saw significant growth in illegal timber imports, while all the other countries studied saw the volume of imports decline or stay at about the same level. Notably, however, over the same period, illegal trade as a proportion of the whole declined in almost all countries, including in China, where the proportion of illegal imports fell from 26 percent to 17 percent.
China’s increasing importance as a processing hub is also affecting the levels of illegal imports into other consumer countries. According to Chatham House research, the total volume of illegal Chinese products imported into seven key consumer countries more than doubled between 2000 and 2013. This was particularly marked in the U.K. and the U.S., where China now accounts for more than 60 percent of the volume of illegal imports.
There has also been a shift in the relative importance of the types of product being traded. China now imports a lot of unprocessed wood and exports processed products such as panels, joinery, and furniture. This is among a number of changes that are making tracing and certifying the legality of timber increasingly difficult.
The trends highlighted above demonstrate the need for China to do more to address the problem of illegal imports, and for other reform-minded countries to engage with China in recognition of its growing role.
To be fair, as outlined in an earlier blog post for chinadialogue, China has already taken some steps towards reform, including enhancing international cooperation, and promoting sustainability certification among its companies. However, most efforts remain voluntary and China lags behind other major timber-importing countries in addressing the issue. Critically, it has no legislation in place banning import of illegal wood-based products and no national action plan.
New Curbs Needed
To close the gap, the government should finalize and implement the existing draft national timber legality verification system. It should also strengthen its own procurement policy and expand training for companies on how to avoid importing illegal timber. There are key successes from E.U. and U.S. reform efforts in particular, from which China could learn.
Work to promote sustainable forest products trade and investment should also continue, and awareness-raising initiatives should be extended to the general public to increase demand for verified legal products.
By cooperating with international partners, encouraging regional forums such as ASEAN to take up the issue, and putting the issue on the agenda of the G20, China could place itself at the forefront of efforts to address illegal logging. In a critical year of international summitry, this would also help drive progress on climate change and overall sustainable development, bringing benefits to all.
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