US Dollar Exchange Rates of 27th March 2010
China Yuan 6.8270
Report from China
Emphasis on climate change
On March 5th, at the National People¡¯s Congress (NPC)
and Chinese People¡¯s Political Consultative Conference
(CPPCC), Primer Wen Jiabao outlined the work ahead for
the government in 2010.
One focus for 2010 is to proactively address climate
change. This will be done through developing low-carbon
technology, extended use of efficient and energy-saving
technologies, developing new and renewable energy
sources and boosting the construction of a so-called
¡®intelligent power grid¡¯.
Forestry activities are also to play a role. The target for
additional afforestation, for boosting ¡®greening¡¯ efforts and
improving forest carbon sequestration, is no less than 5.92
million ha. In addition, efforts will be made on the
establishment of an industrial system and a consumption
model featuring low carbon emissions. This is to achieve
progress necessary to tackle climate change globally.
Timber prices forecast to rise
The 2010 plan shows that the national policy is tending
towards a scaling down of domestic harvesting and
domestic timber supply.
Growth levels in China¡¯s plantations of fast growing
species peak at about the fifth year after planting and some
68 percent of the current plantations are at the early stage
of growth. Analysts say that the main way China can
quickly increase forest carbon sequestration is to reduce
harvest levels in the plantations, thereby maintaining the
forest cover.
International sources of timber are becoming tighter due to
increasing awareness of the need for forest protection and
changes in timber trade policies in supply countries. In
recent years tropical supply countries have reduced their
forest harvests and raw material exports and this has
affected wood product output in China.
Timber consumption for domestic home decoration and
furniture production is said to account for 65% of the
enduses for wood in China. As the rate of house building
accelerates in China, so does consumption of wood
products. In a situation of declining domestic and
international supplies but growing demand, price levels
are set to climb and at some point substitutes for wood will
gain market share.
New MDF standard
A new National Standard on Medium Density Fiberboard
(revised) (GB11718-2009) will come into force on April 1,
2010. The Standard sets a revised level on formaldehyde
release for MDF and will require some restructuring in the
industry.
To aid the rapid adoption of the new standard, training
courses and technical workshops have been held. The new
standard was explained and presentations were made on
the techniques and technologies that are available to meet
the new standards. The MDF industry representatives at
the workshop raised many concerns and there was a lively
discussions and exchanges of views.
Heilongjiang log imports down
The latest statistics from Harbin Customs in Heilongjiang
Province show that log imports via the cross border trade
(called petty border trade in China) in 2009 declined by 40
percent. Analysts say this is because logs in the supply
countries have become scarce.
In 2009, log imports in Heilongjiang Province totaled 5.6
million cu.m valued at US$ 670 million, down 31 percent
in volume and 43 percent in value from 2008. Logs
imported in December 2009 amounted to 4.5 million cu.m,
down 6.5 percent compared with the same period in 2008.
Russia, the main log supply country to Heilongjiang
Province, raised log export tariffs in 2007 and 2008. This
tariff is now at around 25 percent, which translates to
around US$18 per cu.m.
At the same time, the change in China¡¯s border trade
policies and the introduction of a new tax, also had a huge
impact on imports. The import tax paid by importers for
goods entering via the ¡®pretty border trade¡¯ doubled.
This added considerably to the costs borne by enterprises
in Heilongjiang Province and resulted in many enterprises
ceasing operations.
Reports suggest that more than one third of the companies
engaged in the cross border log import business have
ceased operating. The statistics from Harbin Customs
show that 2009 log imports to Heilongjiang province
represented around 20 percent of the national total.
Guangdong furniture exports up
In the first two months of 2010, exports of furniture and
parts from Guangdong Province surpassed the pre-crisis
level. Furniture and parts exports amounted to US$ 1.81
billion, up 37 percent on the two months of 2009 and up
17 percent from the same period of 2008.
The latest statistics from Guangzhou Customs show that
Guangdong¡¯s furniture and parts exports bottomed out in
February 2009, when exports were only US$ 430 million.
Furniture and parts exports in February 2010 alone were as
high as US$ 790 million, up 84 percent on the same period
of 2009.
The main markets for furniture and parts from Guangdong
are, currently, the USA and Europe which together
account for 55 percent of total export. Guangdong
furniture exports to the ASEAN market in the first two
months of 2010 amounted to US$ 250 million, up a
dramatic 230 percent. Analysts point out that the stronger
furniture and parts exports have stemmed from overseas
distributors replenishing stocks. The China-ASEAN Free
Trade Agreement has resulted in growth of exports to
ASEAN countries.
Some furniture manufacturers, when interviewed, said that
the growth in exports was also related to the restructuring
undertaken by industry in the province and because greater
attention was now given to updating designs.
However the industry reports that trade protectionism
seems to be rising. The US continues to implement antidumping
measures against China¡¯s furniture exports.
Additionally, the recently amended EU rules on ecolabeling
of solid wood or wooden furniture is challenging
the competitiveness of the industry.
Even in the ASEAN market hurdles are being erected say
industry. ASEAN domestic furniture manufacturers have
been lobbying their governments to delay the
implementation of zero tariff agreement in the free trade
area, which would undermine China¡¯s furniture export
potential.
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