1. Wooden products exports

The exports of wooden products firstly registered negative growth in 2008, especially when after last August the exports dropped dramatically. China is one of the biggest exporters of wooden products in the world, mainly exporting wooden furniture (accounting for 50%) and various wood-based panels. The export value was $ 21.93 billion (excluding paper & paper pulp) in 2008, increasing by 3.2% from the previous year, while as a matter of fact the growth was negative allowing for the factor of RMB appreciation. See figure1

Figure 1. China's export values of wooden products in recent years


The exports of wooden furniture and plywood dropped greatly in 2008, with wooden furniture down by 12.5% and plywood down by 18.2%. In last December the exports of plywood was just 0.42 million m3, down by 41.7%, and wooden furniture down by 14.6%. see figure 2 & 3

Figure 2. China's exports of wooden furniture and its growth in recent years




Figure 3. China's exports of plywood and its growth in recent years



The exports of fiberboard were 2.435 million tons in 2008, up by 6.7%, which was down by 50% over the growth of the previous year. The exports of wooden doors were 0.303 million tons in 2008, dropping by 10.3% (See figure 4 & 5) and other wooden products all registered a drop more or less. It is estimated that the overall exports situation in 2009 would be even worse.

Figure 4. China's exports of fiberboard and its growth in recent years



Figure 5. China's exports of wooden doors and its growth in recent years



2. The analysis of the status of wooden product manufacturers

2.1 Status description

1) The importers, especially for those who sales African red wood, all showed a substantial loss. The prices and transaction volumes of timber from Papua New Guinea, Africa all registered a drop and heavy stock at ports. The average decrease was between 20%-40%, e.g. African blackwood dropped to RMB 4,000-7,000 in 2008 from RMB 8,000-15,000 in 2007; other wood-based panel materials, like poplar and eucalyptus decreased by 30%.

2) Chinese biggest four manufacturers of wood-based panel are all facing the unprecedented challenges at present, such as 70%-80% of Pizhou's manufacturers have partially suspended production.

3) The actual Chinese market volume of fiberboard is about 25 million m3 and will be smaller in 2009, however, its productive capability is over 40 million m3 and several big- scaled producers have stopped production. The price for fiberboard decreased by 10%-20%.

4) The decoration industry was also affected, down by about 30% in 2008. The impact on big cities was even larger that the real estate sales slipped down by 20.3% on average.

5) Most of the big-scaled manufacturers maintained stable productions, such as, Jianwei Furniture's exports grew by 30%; Jiusheng Floor's exports increased by 80%; some others are preparing to produce high-value-added products, like wooden doors; Jimei furniture prepared to open stores in Paris.

6) Along with the establishment of industrial parks in Northern China and the implement of the state's preferential policies, a lot of Southern wooden products manufacturers have diverted to northern and central markets.

2.2 Analysis

2.2.1 The global financial crisis has turned to economic recession, and it won't be improved notably in this year. China's exports of wooden products, mainly headed to European and American markets, received heavy attack. Besides, the domestic real estate market showed slack signals with a slip of sales (about RMB 620 million in 2008, down by 20.3%) since last year, which also has impact on the demand of wooden products.

2.2.2 China's wooden products also have their own problems, such as cannibakization, low-added value, lack of technique innovation, export products are mostly OEMs, bad price competition and so on. Several years before, many experts have pointed out that China is a big timber manufacturer, but not a strong one.

3. Solutions

3.1 Export manufacturers should gradually turn to develop self-owned brands, designs and build its own distribution channels, rather than merely make OEMs.

3.2 Enhancing the development of products, and adjusting the pattern of products, respectively from low-value-added final products to high-added one, from natural tropical resources to artificial coniferous ones.

3.3 China should be confident that its status as a big producer will not change. Timber industry has several basic points: sustainable resource industry, labor-intensive, traditional, long product period, and many Chinese manufacturers have big ratio of exports that China has become a big producer in the world.