USD 125 billion in 2011⁷
1.7% of the GDP in 2011⁷
^7th highest exporter of EUTR products globally in 2016 by weight (kg)⁸
Highest exporter of EUTR products globally in 2016 by value (USD)⁸

None⁹
0.8% gain of forest area annually 2010-2015
Globally top largest net gain of forest area 2010-2015⁹

FSC certification: 988 thousand hectares (2018)¹⁰
PEFC certification: 5.7 million (2017)¹¹
Domestic forest management certification: 0.7 million hectares (2014)²

FSC certification: 6146 CoC certificates (2018)¹⁰
PEFC certification: 289 CoC certificates (2017)¹¹

Natural forests (pre-logging ban): Faber’s fir (Abies fabri), birch (Betula spp.), Chinese weeping cypress (Cupressus funebris), Chinese fir (Cunninghamia lanceolata), dragon spruce (Picea asperata), Sikang pine (Pinus densata), Chinese red pine (Pinus massoniana), Yunnan pine (Pinus yunnanensis), oak (Quercus spp.)¹²

Plantations: Chinese fir (Cunninghamia lanceolata), Chinese weeping cypress (Cupressus funebris), eucalyptus spp., dahurian larch (Larix gmelinii), American pitch pine (Pinus elliottii), Chinese red pine (Pinus massoniana), Chinese pine (Pinus tabulaeformis), poplar (Populus spp.), oak (Quercus spp.), black locust (Robinia pseudoacacia)¹²

46 species: Aquilaria grandiflora, A sinensis, A. yunnanensis, Dalbergia assamica, D. balansae, D. benthamii, D. burmanica D.  candenatensis, D. cultrara, D. dyeriana, D. fusca, D. hainanensis, D. hancei, D. henryana, D. hupeana, D. jingxiensis, D. kingiana, D. millettii, D. mimosoides, D. obtusifolia, D. odorífera, D. peishaensis, D. pinnata, D. polyadelpha, D. rimosa, D. rubiginosa, D. sacerdotum, D. sericea, D. sissoo, D. stenophylla, D. stipulacea, D. tonkinensis, D. tsoi, D. volubilis, D. ximengensis, D. yunnanensis, Taxus chinensis, T. cuspidata, T. fuana, T. sumatrana, T. wallichiana (all Appendix II), Fraxinus mandshurica, Pinus koraiensis, Podocarpus neriifolius, Quercus mongolica and Tetracentron sinense (Appendix III)¹³

In 2015, China exported EUTR-regulated products to 212 different countries and territories, totalling 25.1 billion kg, of which 11.6% was exported to the EU-28. The United States was the largest single importer by value in 2015 (Figure 1a). Exports of EUTR-regulated products mainly consisted of paper products (HS48*) by both weight and value (Figures 1b and 1c). Exports were also dominated by fibreboard (HS4411), plywood (HS4412) and wooden furniture (HS940350 and HS940360). Domestic consumption exceeded production in 2014 for logs, sawnwood and veneer (Table 1), reflecting China’s role as a main producer of finished timber products. The majority of EUTR-regulated products imported into the EU from China in 2015 were imported by France, Germany, the United Kingdom and the Netherlands (Figures 2 and 3).

Figure 1: a) Main global markets for EUTR products from China in 2015 in USD; b) main EUTR products by HS code exported from China by value in USD in 2015; and c) main EUTR products by HS code exported from China by weight (kg) in 2015¹⁹.

Table 1: Production and trade flows of main timber products in China in 2015¹².

Figure 2: Value of EU imports of EUTR products from China to the EU in 2015 by HS code. Produced using data from EUROSTAT¹⁸.

Figure 3: Quantity of EU imports of EUTR products from China to the EU in 2015 by HS code. Produced using data from EUROSTAT¹⁸.

Imports into China in 2016 of EUTR-regulated products totalled 36 billion USD, from 153 different countries and territories (Figure 4a). Imports of EUTR-regulated products mainly consisted of wood pulp (HS47), sawn wood (HS4407) and rough wood (HS4403) by both weight and value (Figures 4b and 4c).

Figure 4: a) Main global markets for EUTR products imported into China in 2016 in USD; b) main EUTR products by HS code imported into China by value in USD in 2016; and c) main EUTR products by HS code imported into China by weight (kg) in 2016¹⁹.

*Key to HS codes: 4403 = rough wood; 4407 = sawn wood; 4411 = fibreboard; 4412 = plywood and veneered panels; 4418 = joinery and carpentry wood; 47 = wood pulp; 48 = paper and paper products; 940350 = wooden bedroom furniture; 940360 = other

China does not currently have dedicated legislation in place prohibiting the import of illegal timber products^20,21. The Regulation on the Implementation of the Forestry Law (2000) requires that timber cannot be sourced without harvesting permits (in the case of timber produced in China) or “other evidence of legal origin”, but it does not define what would constitute such evidence²⁰.

Based on data collected on behalf of the World Bank across a range of sectors.

Rosewood (especially Dalbergia spp.) is in high demand in China²³ and one of the main groups of species reported in illegal timber trade in China^24,25.

China has been cited as probably the largest importer of illegal origin timber products globally^27,28. An estimated 17% of imports into China of timber-based products had a high risk of illegality in 2013²³.

No EU³⁰ or UN³¹ sanctions on timber exports or imports.

China is a major importer of timber that is processed into timber and paper products in China for re-export, with timber from multiple sources often mixed during processing³².

Illegal trade

China is one of the world’s largest importers, consumer and exporter of wood-based products²¹, with almost half of the wood and wood fibre processed in the country sourced through imports³³. The top 10 supplier countries of logs and sawn wood to China 2011-2015, based on Global Trade Atlas data, were reported to be the Russian Federation, Canada, New Zealand, the United States, Thailand, Papua New Guinea, Australia, Solomon Islands, Chile and Indonesia, with non-tropical timber producers dominating the list³³.

Many Chinese forestry companies operate abroad, especially in the Russian Federation, Africa (including Gabon, Zambia, Equatorial Guinea, Liberia, Republic of the Congo and Cameroon), Lao PDR, Myanmar, Thailand, the Republic of Korea, Brazil, Argentina, Venezuela, Peru and Guyana³⁴. While the proportion of imports of timber and paper products that are likely to be from illegal sources was believed to have declined between 2000 and 2013, the actual volume of such imports has increased, due to the overall growth in timber and paper imports over the period²¹. China has been cited as probably the largest importer of illegal origin timber products globally^27,28. An estimated 33 million m³ of roundwood equivalent (RWE) of illegal timber and paper-sector products were imported into China in 2013, increasing from 17 million m³ RWE in 2000^{21, 23}. Field investigations conducted since 2004 indicate that illegal timber has entered China from globally distributed producer countries, including Lao PDR, Indonesia, Myanmar, Russian Federation, Mozambique and Madagascar, as well as coming from China itself²⁸; Myanmar especially has been the subject of global scrutiny into the overland flow of illegal timber into China^35,36,37. However, there is currently no legislation in place prohibiting the import of illegal timber products²¹, impeding the ability of Chinese law enforcement to take action on shipments of suspected illegal timber.

China’s role as the main global processor of timber into timber and paper products means that imports from China account for an increasing proportion of illegal imports into consumer countries, with highly processed products (such as furniture) more likely to contain illegally-sourced timber²³. Between 2005 and 2015, more than 2 million m³ of RWE of potentially illegal timber is estimated to have entered into the EU from China in the form of EUTR and non-EUTR products³³.

In 2013, imports from the Russian Federation (logs and sawnwood) and Indonesia (sawnwood and wood pulp) were indicated to be the two main sources of China’s timber and paper imports with high risk of illegality²³. However, since 2013, Indonesia has exported timber to China with Indonesian Verified Legal (V-legal) licence documents, which constitute a proof of legality under Indonesian law³⁸, and on 15 November 2016, Indonesia began issuing FLEGT licences to verify legality of timber exported to the EU³⁹. From the Russian Federation, volumes of Mongolian oak logged for export to China exceeded the authorised logging volumes 2004-2011 by two to four times⁴⁰; China also imports over 95% of the valuable hardwoods exported from the Russian Far East, where 50-80% of precious hardwood cut is estimated to have been harvested illegally, according to a report by the EIA⁴¹. Papua New Guinea and the Solomon Islands are also becoming increasingly important sources of likely illegal timber products due to their increased volume of timber-based exports^21,23,28. Papua New Guinea was the fourth largest source of rough wood (HS 4403) imports to China in 2015 by weight¹⁹; links have been made between illegally granted Special Agriculture and Business Leases in Papua New Guinea and import of logs harvested from land with such leases into China⁴². A 2018 report on illegal logging in Papua New Guinea cautioned that imports of ‘high risk’ timber from PNG could damage China’s trade relations with EU and US buyers of Chinese timber products⁴³. Timber stocks in the Solomon Islands have been severely over-harvested, with log export volume increasing rapidly 2002-2014⁴⁴. Corruption among logging companies and government officials in the Solomon Islands was reported to have contributed to excessive logging^45,44.

Import of logs has also been reported from countries with a log export ban (LEB), including Equatorial Guinea, Ghana and Côte d’Ivoire²¹; this was also seen for Indonesia (which enacted a log export ban in 2001), with Chinese reported imports of Indonesian logs post Indonesia’s LEB in 2001^19,21,28, which may be indicative of illegal trade. Although Nigeria has had an export ban on rough and sawn wood in place since 1976^29,46, a report by EIA found evidence of over 1.4 million “kosso” (Pterocarpus erinaceus) logs with an estimated value of USD 300 million being stopped by Chinese customs officials upon attempted entry to China in 2016⁴⁷. In 2017, Nigerian CITES authorities issued around 4000 retrospective permits, releasing the held logs⁴⁷. EIA reported that the issuance of these permits was the result of a “grand corruption scheme” involving payments to senior Nigerian officials with alleged help from the Chinese consulate⁴⁷. In 2018, Forest Trends reported that China had imported >46 million m³ of logs from 31 countries with either full or partial LEB 2005-2016, with many of these imports considered to be in violation of the bans⁴⁸. Chinese log imports from LEB countries amounted to 20% of China’s total imports of logs 2005-2016, totalling USD 16 billion, with greatest values imported from Papua New Guinea, Lao PDR and Malaysia⁴⁸.

Timber from rosewood (Dalbergia and Pterocarpus spp.) and ebony (Diospyros spp.) is in great demand in China for Hongmu furniture^24,29, for example. Until the genera were listed in the CITES Appendices in June 2013 (Diospyros) and January 2017 (Dalbergia), 98% of exports from Madagascar of these genera were imported by China⁴⁹. The rapid rise in demand for the timber species listed in the official Chinese National Hongmu Standard has been linked to increases in illegal logging in range states²⁴ in Asia (especially countries bordering China such as Thailand, Cambodia and Lao PDR⁵⁰), Africa (including Ghana, The Gambia, Senegal⁵¹) and Central and South America (including Guatemala²⁵), as well as CITES compliance issues for CITES listed species⁵². In 2016, 15-20 major Chinese companies were reported as being actively involved in purchasing illegal precious timber from Madagascar²⁵.

China’s timber products industry

China is a major importer of timber which is processed into timber and paper products in China for re-export; this industry is represented by a large number of processing factories (more than 100 000), many of them small and medium sized enterprises, where timber from multiple sources can be mixed, making traceability difficult³². The paper processing sector is dominated by five main companies: Nine Dragons, Shangdon Chenming, Lee & Man, Gold East Paper (APP) and Shandong Sun Paper, which together accounted for 18% of the market in 2008; Nine Dragons was the 21^st largest global forest, paper and packaging industry company in 2015⁵³. The remainder of the paper producing industry consists of much smaller enterprises³². Smaller forest owners and suppliers may also transport and sell timber and timber products without the necessary licences (often transportation licences) due to the associated costs⁵⁴; additionally, some timber products, such as pre-consumer recycled sawdust, wood chips and furniture waste, which are processed into further timber products, do not require transport licences⁵⁴. Both of these factors hamper supply chain traceability.

China’s forestry management and legislation

Forest management is supposed to follow a five year plan set out by the State Forestry Administration³². Each Province or state farm is assigned a yearly operating quota, which is then distributed between each operating licence holder³². The Natural Forest Protection Program, which covers the conservation and regeneration of natural forests, is the legislation governing China’s current natural forest logging ban²⁶. It is important to note that since this ban in 2017, availability of Chinese hardwood species, such as Mongolian oak, is likely to have reduced, as large scale plantations of the species have not yet matured⁵⁵. Species mis-declaration may therefore become a potential issue. Plantations supply the majority of domestically consumed logs¹². China has also introduced its own certification scheme for forests, the “China Forest Certification Scheme”, launched in 2010³² and endorsed by PEFC in 2014⁵⁶.

The Chinese government published a draft timber legality verification scheme (TLVS) in 2011²¹. Chinese timber industry associations have also now developed their own legality standards and frameworks⁵⁷. As part of this, the China National Forest Products Industry Association (CNFPIA) developed a TLVS (released in September 2017), which is envisaged as an important element of the national China TLVS⁵⁷. This standard sets out the requirements for legality at the forest management level and throughout the chain of custody and will apply to domestically harvested and imported timber⁵⁷. Implementation of the standards and tools being developed as part of the TLVS is currently forseen as voluntary⁵⁷, although the Chinese government is planning to put in place mandatory regulations which will require companies to demonstrate that their timber imports are legal⁵⁷. The Chinese Academy of Forestry (CAF) is also supporting companies to establish due diligence systems based on a toolkit developed by the CAF⁵⁷. CAF also launched a China Responsible Forest Product Trade and Investment Alliance (China-RFA), which is, inter alia, “working to establish partnership agreements with international market participants to support the capacity building of Chinese enterprises and to establish collaborative partnerships to promote responsible business”⁵⁷.

Take-up of third party chain of custody certification (CoC) is also increasing, for example, over 5000 FSC CoC certificates and nearly 300 PEFC CoC certificates are currently held by Chinese organisations^{, 10,11}.

China and the EU have established a Bilateral Coordination Mechanism (BCM) to facilitate cooperation to reduce illegal logging and the associated global trade in illegal timber, intended to act as a forum for policy dialogue and a mechanism for sharing information on policies and legal frameworks, as well as coordinating relevant initiatives⁶.

[1] The following list may not be exhaustive and is intended as a guide only on relevant legislation.

[2] The following list may not be exhaustive and is intended as a guide only on required documents.

*This overview does not consider Hong Kong SAR, Macao SAR or Taiwan (Province of China)

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