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Hardwood Project Trade

U.S. Imports of Wood Products from China

OVERVIEW

The United States is one of the world’s major net importing wood products countries as well as the major producers of industrial wood. Canada has been the largest exporter to the U.S. Another emerging supplier with dramatic increasing shares of the U.S. imports is China, with an average increasing rate of wood products import at 30% per year since 2002. In 2007, the total U.S. imports of wood products from China reached $3.08 billion, which showed double and ten fold increases compared to 2003 and 1996, respectively (US Trade Internet System).

IMPORTS BY PRODUCT TYPE

The increase of U.S wood products (excluding furniture) imports from China were mostly attributed to the increased imports of hardwood plywood. The following figure presents the main wood products imported from China. In 2003, the hardwood plywood imports were only $115 million, whereas this number increased to $851 million in 2007. Other wood products such as builders carpentry, hardboard, hardwood molding also showed different extents of increase.

WOOD FURNITURE IMPORTS

Besides timber product imports, U.S. furniture imports from China have also experienced great change. Net imports of household furniture have grown from 26% of the U.S. market, only 10 years ago to almost 60% today. U.S. household wood furniture imports from China have increased at an annual rate of 28.41 percent on average, since 1996. China has become the largest exporter of wood furniture to the U.S. market and has supplied more than one third of the U.S. wooden furniture imports since 2002 (Zhu, Taylor, and Feng 2004, Science Press). In 2006, the total value of nonupholstered household wood furniture imported from China reached the peak value of $5 billion. This value decreased to $4.9 billion in 2007. Significant cost advantages resulting from low-cost wages, improved quality, and efficient distribution in China are the contributing factors that force the U.S. furniture market to source production off-shore.

SUPPLY CHAINS OF FURNITURE IMPORTS

Currently, there are four import-based supply chain models that U.S. firms and retailers adopt to cope with the rapid growth in imports from China.

  • U.S. manufacturers source products from China with the help of an agent that is located abroad.
  • U.S. manufacturers produce their furniture in China, directly investing in infrastructure.
  • U.S. retailers buy directly from Chinese manufacturers.
  • U.S. agents source products in China and sell them directly to small retailers.

U.S. Wood Products Export to China

OVERVIEW

The U.S. has been the major provider of industrial wood in the world. The hardwood volume accounts for 8% of the global hardwood resources. According to the AHEC statistics, China has been the largest export market of the U.S. hardwood products for four years (AHEC).

U.S. log exports to China experienced a peak value of $448 million in 1988, and then declined dramatically to $28 million in 1995. In 1996, the exports rose to $34 million. The sharp decline can be explained by falling sales of softwood logs, which accounted for 98 percent of U.S. exports in 1988 caused by competition from other exporters and China’s trade policy regime (Trachtenberg 2004, US Trade Internet System). Most of the softwood logs and lumber were then exported to Japan and Canada markets. Starting from 1999, U.S. wood products exports to China experienced rapid growth, mainly hardwood logs and hardwood lumber, due to the strong demand of China’s growing housing and furniture industry.

According to a report prepared by Tony Halstead of the USDA Foreign Agriculture Service, China was the 8th largest market for U.S. wood products in 1999. By 2004, China had become the 3rd largest market, following Canada and Japan. It is noted that this number included Hong Kong. China Mainland has been the 4th largest export market since 2002, following Canada, Japan, and Mexico (US Trade Internet System). The following figure shows the U.S. total wood product exports to China. The increase of U.S. exports to China from $222 million in 2002 to $575 million in 2007 is largely due to reduced tariffs, domestic market demands, and logging bans, which stimulated China’s demand for imported wood products. China has become a very important market for U.S. forest product exporters.

EXPORTS BY PRODUCT TYPE

Most of the growth of wood products export to China has stemmed from vigorous sales of hardwood logs, lumber and veneer to meet the demand of furniture and decoration sectors in China. The following figure presents the composition of U.S. wood product exports to China. Hardwood logs, lumber and veneers contributed $442 million in 2007 and accounted for 77 percent of total U.S. wood exports to China. The value of wood products exports by category and the corresponding proportion accounting for the total wood exports in 2007 are as follows: hardwood lumber (39%) $222 million, hardwood logs (33%) $190 million, and hardwood veneer (5%) $30 million. Most of the hardwood products imported from the U.S. to China are used as domestic commercial/residential floor materials, construction woods, furniture materials, and then exported to other countries, mainly the U.S., Europe, and Japan.

EXPORTS BY SPECIES

According to USDA Foreign Agricultural Service statistics, the Top 5 U.S. hardwood logs exported to China in 2007 by species include walnut, red oak, yellow poplar, white oak, and cherry. Yellow poplar, red oak, western red alder, white oak, and maple are the main species of hardwood lumber imported by China. Hardwood veneers imported by species include cherry, maple, red oak, and white oak (USDA FAS). The augment of U.S. hardwoods exports to China and species diversification are driven by China’s domestic demand and ever increasing export demand of high quality value-added wood products.

FUTURE TREND

The rapid expansion of China’s economy together with the implementation of restrictive harvesting policies provides substantial long-term opportunities for wood product exporting nations. China is predicted to become the number one market for raw wood and other wood products by the year 2030, while the U.S. is predicted to increase its share of global wood products as a whole (Turner et al. 2005). China’s projected increase in wood imports is due to the strong economy growth that has been forecasted to become greater than 6% per year (Turner et al. 2005). The larger U.S. share of global exports, especially roundwood and paper can also be contributed to the economic growth that China will experience.