China: Modeling Trade Scenarios for Forest and Forest Products

Steven Northway and Gary Bull20 September 2006

University of British Columbia, Vancouver, Canada

China’s State Forest Administration FEDRC , Peking University, Forest Trends, Rights and Resources Group (RRG) and the Center for International Forestry Research (CIFOR)

Towards a Sustainable Chinese Forest Sector:Reforming Trade and Strengthening Domestic Policy

Sponsors and Conference Title

Overview

• Rationale for project

• Project objectives

• Data acquisition

• Model development

• Results

Rationale

• Dramatic rise in imports of forest products and logs (Ms. Canby’s presentation).

• The world became aware that China is now a global player in the consumption, production and trade in forest products.

• China’s strategic direction will be influenced by its own forest management, social and industrial policies.

Objective

• To develop a modeling tool that allows us to explore scenarios that are relevant to public policy for China and other countries.

Under the overall direction of Dr. Chris Barr at CIFOR, we examined scenarios in China and Indonesia.

Date sources

• Chinese State Forestry Administration inventory reports

• International Forestry Review 2004

• CIFOR studies

• FAO for global datasets

• Various other sources

Model development

• There are other trade models available but they are either costly, somewhat outdated or have some theoretical shortcomings.

• In model development we strived for:

TransparencyTransparencyCollaborationCollaborationFlexibleFlexibleEmbed forest estate modelEmbed forest estate modelParameterized easily Parameterized easily

Methodology

• Define the structure of the model through products and processes (e.g. sawlog to plywood)

Initial Intermediate FinalProducts Products Products

Forest by type Sawlogs,pulplogs,pulp Plywood, panelsRecycled pulp sawntimber, newsprintNon-wood fibre Paper and paperboard

Parameters

Manufacturing capacity and productionFibre source (e.g. forest by country by forest type)Consumption

We start by developing our assessment of the world’s production, manufacturing capacity, fibre sources and consumption

Then we analyze by country the industrial roundwood (IRW) historic development and trends

World IRW Production

0

500

1000

1500

2000

2500

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

Year

Mill

ion

m3 /y

ea

r

World IRW Production

% World IRW Production

Fraction of World IRW Production

0

0.10.2

0.3

0.4

0.50.6

0.7

0.8

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

Year

Frac

tion

Panel Ply Sawn Pulp

World Fibre Source

Fraction of World Fibre Furnish Source

0

0.2

0.4

0.6

0.8

1

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

Year

Frac

tion

WdPlp RecPap OthPlp

So, where does China fit into the global picture?

China’s in IRW Production

China as a Fraction of World Production

0

0.05

0.1

0.15

0.2

0.25

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040Year

Frac

tion

Panel Sawn News Paper Pulp

China’s IRW Consumption

China as a Fraction of World Consumption

0

0.1

0.2

0.3

0.4

0.5

0.6

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

Year

Frac

tion

Panel Ply Sawn News Paper

Fiber source – China’s Forest:

• Forest Type– Fast plantations– Slow plantations– Deciduous forest– Coniferous forest

• Forest Condition– Non-forest– Forest– High cost forest

Scenarios and Results

Scenarios : supply shocks1. China’s National Forest Protection Program (NFPP)

removed2. China’s plantation success3. Indonesia’s illegal logging

Preliminary Results• Forest self-sufficiency ?

China’s Three Scenarios

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20

40

60

80

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120

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2005 2010 2015 2020 2025 2030Year

Mill

ion

m3/

yr

.

Status Quo End NFPP Poor Plantation Growth

China’s Three Scenarios

China's IRW Consumption and Production

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50

100

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2005 2010 2015 2020 2025 2030Year

Mill

ion

m3/

yr

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IRW Consumption Status Quo End NFPP Poor Plantation Growth

Indonesia’s Scenarios

Indonesia's IRW Consumption and Production

0

10

20

30

40

50

60

70

2005 2010 2015 2020 2025 2030

Year

Mill

ion

m3/

yr

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IRW Consump tion Status Quo End Illegal Logging

Concluding comments

• Trade models help us understand the worldwide implications of individual country’s forest, social and industrial policies.

• If China’s consumption grows as forecasted, there will be a challenge with finding the fibre domestically.

• If Indonesia implements an illegal logging ban their domestic consumption will absorb their production.