Recent research by the Centre’s East Asia Node together with Forest Trends, an NGO, suggests that most import of timber to China from Africa is done by a relatively small number of geographically clustered firms. This may provide opportunities to engage the major importing firms in developing and implementing responsible sourcing practices, say Andreas Wilkes and Huang Wenbin
China’s thirst for natural resources to fuel its economic development has gained the attention of governments, media and civil society worldwide. China’s imports from Africa have received particular attention. Timber is no exception, especially as it is China’s third-largest commodity import from Africa after oil and minerals and the share of total African timber exports going to China has risen over the last decade.
The majority of African log imports by China come from central African countries—Gabon, Republic of Congo, Cameroon and Mozambique—although eastern African countries also export smaller volumes to China. Until recently, it is likely that much of this timber was processed in China, from where it would be exported to the EU or the US as furniture or other types of wood products. But since the financial crisis in the West, China’s own domestic market has become more significant.
China’s emerging role in Africa’s forestry sector has raised a range of concerns, some of which are better substantiated than others. Reports by some NGOs and academics suggest that China’s activities in Africa’s forest regions have had adverse impacts on African forest environments, created poor labour conditions, and drive illegal timber trade and corruption, undermining forest governance in African countries. China’s clear preference for unprocessed logs has been said to limit African countries’ abilities to create employment and develop value-adding capabilities. And with increasing numbers of state-owned and private firms involved in the Africa–China timber trade, the risks of increasing the adverse effects of this trade could be rising.
In Europe and the US, laws such as the US Lacy Act and the EU’s Forest Law Enforcement, Governance and Trade Action Plan, have been designed to force importers of wood products to ensure that sustainable practices are observed further down their supply chains. But with European and American economies performing poorly, an increasing share of China’s timber imports is feeding the Chinese domestic market, which has no similar regulations. As wood-product firms in China become less reliant on their traditional European and American export markets, Chinese wood-processing firms have ever-decreasing incentives to ensure the sustainability of the forests from which they source their timber. As China plays an increasingly important role in global commodity chains, there are concerns that this may drive down environmental and social standards.
Recent research conducted by the World Agroforestry Centre and Forest Trends as part of a project coordinated by the Center for International Forestry Research went beyond existing studies that document the growing scale of the Africa–China timber trade and instead looked at enterprise-level data from Chinese Customs to identify which firms had imported how much timber from Africa between 1994 and 2010.
Despite the increasing number of firms importing timber—323 in 2010 compared to just 16 in 1994—the data showed that a high proportion of imports are consistently shared among a small number of firms. That is, since the 1990s, the top five enterprises in any given year have accounted for over 40%, and the top 30 enterprises for over 80%, of African timber imports by volume. Out of the top 30 importers by volume in 2008 and 2009, 19 companies are present in both lists, with some firms not importing large volumes in consecutive years if a large consignment had not been exhausted.
The vast majority of enterprises importing timber to China from Africa are based in four Chinese provinces: Guangdong, Zhejiang, Shanghai and Jiangsu. These provinces are the locations for major wood-processing industry clusters near China’s eastern seaboard, where transport links are good but local timber supply is limited. A large proportion of the firms that import African timber also engage in secondary processing, supplying their products to nearby industrial clusters.
While China has been in the process of developing timber legality regulations for some time, domestic legal requirements are still not in place. Because the import volumes from Africa are highly concentrated among a small number of geographically clustered firms, this research suggests that the transaction costs of initiatives to directly engage major importing firms in efforts to improve the sustainability of their supply chains would not be as great as might be assumed. Since import volumes from specific countries are even more highly concentrated among a small number of firms, this further suggests that initiatives in African supplying countries intending to engage Chinese importers in sustainable forest management and trade initiatives should be well placed to target Chinese firms whose participation would bring significant benefits for improved sourcing in supplying countries.
Read the article
Huang W, Wilkes A, Sun XF, Terheggen A. 2012. Who is importing forest products from Africa to China? An analysis of implications for initiatives to enhance legality and sustainability. Environment, Development and Sustainability. November.
This research is part of the CGIAR Research Program on Forests, Trees and Agroforestry