China’s Industry & Market: Growing Impact on the World · China’s Industry & Market: Growing...
Transcript of China’s Industry & Market: Growing Impact on the World · China’s Industry & Market: Growing...
WOOD MARKETSGroup1
China’s Industry & Market: Growing Impact on the WorldChina’s Industry & Market:
Growing Impact on the WorldUN-ECE Timber Committee Meetings
Geneva, SwitzerlandOctober 3, 2006
By: Russell Taylor & Jane Guo
INTERNATIONAL WOOD MARKETS GROUP( R.E. TAYLOR & ASSOCIATES &
INTERNATIONAL WOOD MARKETS RESEARCH)Vancouver, B.C., Canada
+1 604-801-5996 www.woodmarkets.com
UN-ECE Timber Committee MeetingsGeneva, Switzerland
October 3, 2006
By: Russell Taylor & Jane Guo
INTERNATIONAL WOOD MARKETS GROUP( R.E. TAYLOR & ASSOCIATES &
INTERNATIONAL WOOD MARKETS RESEARCH)Vancouver, B.C., Canada
+1 604-801-5996 www.woodmarkets.com
WOOD MARKETSGroup2
Presentation OutlinePresentation Outline
Introduction to WOOD MARKETS Group
1. China’s Role in Global Trade2. Russia’s Fit with China3. China’s Industry & Trade in Transition4. China’s Increasing Exports to USA5. China’s Increasing Exports to Europe6. China’s Business7. Outlook on the Chinese Processing Industry
WOOD MARKETSGroup3
Introduction to:International WOOD MARKETS Group
Introduction to:International WOOD MARKETS Group
• We are wood products industry consultants and we assist companies around the world to develop operational, marketing & business strategies.
• We are known as global market & industry experts/analysts on timber, lumber, panels & many millwork products sold in the U.S. market & key export markets
• We produce Multi-Client Reports: Europe & Russia; Clearwood Pine; Global Lumber Benchmarking; The China Book; WOOD Markets 2000, 2002 & 2006; & the WOOD Markets Monthly Report
About: International WOOD MARKETS Group
Specialty Products•Various Lumber Items•OSB/Plywood/MDF•Engineered Wood:
- I-Joists & LVL- Finger-joint items- Edge-glued panels
•Doors & Windows•Mouldings & Millwork•Treated Wood
Global Topics•Benchmarking:
- Manufacturing- Timberland- Market Audits
•Competitor Analysis•Product/Market Analysis•Entry & Export Strategies•Regional/Global Supply &
Demand Forecasts•US/Global Price Forecasts•Due Diligence: Investments
Consulting Projects: US/Global Markets
WOOD MARKETSGroup5
WOOD Markets’ Multi-Client ReportsWOOD Markets’ Multi-Client Reports
About: International WOOD MARKETS Group
International:• Lumber ~4 of the Top 5 Companies are Clients• Moulding/Doors ~8-10 of the Top 10 are ClientsUSA:• Lumber ~14 of the Top 20 Companies are Clients• Plywood/OSB 3 of the Top 5 are ClientsCanada:• Lumber ~16 of the Top 20 Companies are Clients• Plywood/OSB 3 of the Top 5 are Clients
Consulting Projects: Clients
R.E. Taylor &Associates Ltd.WOOD Markets
About: International WOOD MARKETS Group
Services Offered:• Market research in China;• Trade data analysis & of China imports & exports;• Industry tours & supplier/company assessments;• Sourcing of Chinese suppliers for finished products;• Sourcing of Chinese buyers of logs, cants & lumber; • Liaison with Chinese government, legal personnel &
others for setting up businesses in China.
China Office, Beijing (Est. Jan. 1, 2006)
WOOD MARKETSGroup8
We have Produced:“The China
Book”
We have Produced:“The China
Book”
THE CHINA BOOK –
Wood Products Industry &
Market ReviewPart 1 & 2 = Released
in March 2006;
Part 3 = Released in June 2006
WOOD MARKETSGroup9
1. China’s Role in Global Trade1. China’s Role in Global TradeChina’s rank in global trade:
• Production: Global Rank• Softwood lumber #4 (could be higher)• Hardwood lumber #2 (may be #1)• Plywood #1• Blockboard #1• MDF #1• Particleboard #3• Furniture #2• Finished Products Soaring
• Imports #2 after the USA• Exports #1
WOOD MARKETSGroup10
China = #1 Softwood Log ImporterChina = #1 Softwood Log Importer
China & Europe = the 2 major global importers
Global Industrial Roundwood (Coniferous) Imports
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
95 96 97 98 99 00 01 02 03 04Source: FAO/
Wood Markets
(x00
0 m
3)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
(Mill
ion
bf)
Other
Europe - Top 10
S. Korea
Japan
China
WOOD MARKETSGroup11
China = #1 Hardwood Log ImporterChina = #1 Hardwood Log Importer
China has absorbed all the incremental supply since ‘98
Global Industrial Roundwood (Non-Coniferous) Imports
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
95 96 97 98 99 00 01 02 03 04
Source: FAO/ Wood Markets
(x00
0 m
3)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
(Mill
ion
bf -
Scrib
ner)
Other
Belgium
Japan
Italy
Canada Sweden
Finland
China
WOOD MARKETSGroup12
China = #3 Plywood ExporterChina = #3 Plywood Exporter
China (& Brazil) = the fastest growing exporters!!
Global Plywood Exports - By Country
0
3,000
6,000
9,000
12,000
15,000
18,000
21,000
24,000
94 95 96 97 98 99 00 01 02 03Source: FAO
(x00
0 m
3)
0.0
3.4
6.8
10.2
13.6
17.0
20.3
23.7
27.1
(Bill
ion
sf -
3/8"
Bas
is
Other
Canada
Finland
Russia
Brazil
China
Malaysia
Indonesia
WOOD MARKETSGroup13
China = World’s 2nd Largest Import MarketChina = World’s 2nd Largest Import Market
China is 2nd to the U.S., in terms of imports, but is the world’s largest importer of logs.
China: Global Import Market Share
0%
10%
20%
30%
40%
50%
60%
Softwood Lbr
Hardwood Lbr
Tropica
l H/W
Lbr
Softwood Logs
Hardwood Logs
Tropica
l H/W
LogsPlywood
Tropica
l H/W
Plywood
% G
loba
l Mar
ket S
hare
19962004
China is the #1 Import
Country for Logs & H/W
Lumber
& the #1 Exporter for a variety of commodity & finished products
WOOD MARKETSGroup14
2. Russia’s Fit with China2. Russia’s Fit with China• Siberian & RFE Log Exports are high volume to China (and Japan) = High Margin Business!• There remains a strong incentive for Russians to export logs regardless of how they obtain them (legally or illegally, although this is changing…). • China’s northern wood industry is booming based on a heavy diet of imported Russian logs and lumber = “gold rush” in terms of Chinese processing plants.• But delivered log costs from Russia to China are increasing = getting to be very expensive and becoming one of the highest cost in the world!
WOOD MARKETSGroup15
Russia = #1 Softwood Log ExporterRussia = #1 Softwood Log Exporter
70% of Russian softwood logs are shipped to China!
Global Industrial Roundwood (Coniferous) Exports
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
95 96 97 98 99 00 01 02 03 04
Source: FAO/Wood Markets
(x00
0 m
3)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Mill
ion
bf)
Other
Europe - Top 10
Canada
New Zealand
U.S.
Russia
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Russia = #1 Hardwood Log ExporterRussia = #1 Hardwood Log Exporter
~40% of Russian hardwood logs are shipped to China
Global Industrial Roundwood (Non-Coniferous) Exports
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
95 96 97 98 99 00 01 02 03 04
Source: FAO/ Wood Markets
(x00
0 m
3)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
(Mill
ion
bf -
Scr
ibne
r)
Other France
Gabon Papua NG
Latvia
U.S. Malaysia Russia
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China’s Surging Log ImportsChina’s Surging Log ImportsChina Log Imports
0
4
8
12
16
20
24
28
32
88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04Source: China Custom s Sta tistics; USDA-FAS * '03 & '04 Estim ated
Mill
ion
m3
Hardwood
Softwood
68% of China’s log imports are from Russia
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China’s Surging Russian Log ImportsChina’s Surging Russian Log Imports
Total log imports = 68% from Russia!
China: Logs and Lumber Imports From Russia
0
5
10
15
20
25
97 98 99 00 01 02 03 04 05
Source: CTDA
Note: RWE(RoundwoodEquivalent)
Mill
ion
m3 Lumber
(RWE)Logs
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Russia/China Fit in Global MarketsRussia/China Fit in Global Markets• China = largest log importer in the world.• Russia = largest log exporter in the world.• China needs Russia; Russia needs China.• Putin government is considering (is threatening) to either increase log export duties, or reduce/eliminate log exports.• IF this occurs in part or in whole, China’s processing industry would lose much of its raw material supply!• Global raw material prices (logs, lumber, plywood, etc.) would soar and/or China’s output would crash!• Need to key your eye on China & Russia!!
WOOD MARKETSGroup20
3. China’s Industry & Trade in Transition:The Chinese Wood Processing Industry
Continues to Evolve
3. China’s Industry & Trade in Transition:The Chinese Wood Processing Industry
Continues to Evolve• Initial success was primarily in furniture and capitalized on:
• Low cost labor
• Lower priced imported raw material
• Various levels of imported technology and quality control were introduced and applied.
• Investments in shipping/containerization –improved transportation logistics and reduced export costs.
WOOD MARKETSGroup21
Chinese Furniture Industry GrowthChinese Furniture Industry Growth
For the period 1997-2005, Shipments up 18%/year - Exports up 34%/year!
China: Furniture Total Shipments and Exports
0
10
20
30
40
50
97 98 99 00 01 02 03 04 05 06f
Source: CNFA & WOOD Markets
USD
Bill
ion
Shipments
Exports
WOOD MARKETSGroup22
Transition: Buyer to SupplierTransition: Buyer to Supplier
Panel output soars in all products!
China: Wood Based Panel Production
0
10
20
30
40
50
60
70
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
Source: SFA
Mill
ion
m3
OtherParticleboardFibreboardPlywood
WOOD MARKETSGroup23
What is the Export Potential?What is the Export Potential?
Wood Based Panel Exports are just a fraction (~10%) of total production!
China: Wood Based Panels Production, Imports and Exports
0
20
40
60
95 96 97 98 99 00 01 02 03 04
Source:CTI & SFA
Mill
ions
m3 Imports
ExportsProduction
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Transition: Imports to ExportsTransition: Imports to Exports
Output continues to explode!
China: Plywood Production
0
3
6
9
12
15
18
21
24
27
93 94 95 96 97 98 99 00 01 02 03 04 05
Source: SFAM
illio
n m
3
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Transition: Imports to ExportsTransition: Imports to Exports
Imports plunge as exports explode!
China: Plywood Imports
0
1
2
3
95 96 97 98 99 00 01 02 03 04 05 Source: SFA & CTI
Mill
ion
m3
0
100
200
300
400
500
600
700
800
900
Mill
ion
USD
VolumeValue
China: Plywood Exports
0
1
2
3
4
5
6
95 96 97 98 99 00 01 02 03 04 05 06* Source: SFA & CTI* Note: '06 (6 m ths)
Mill
ion
m3
0
333
667
1,000
1,333
1,667
2,000
Mill
ion
USD
VolumeValue
WOOD MARKETSGroup26
Transition: Imports to ExportsTransition: Imports to Exports
Production & exports growing at similar pace
China: Plywood Supply/Demand
0
5
10
15
20
25
30
95 96 97 98 99 00 01 02 03 04 05
Source:SFA & CTI
Note: '05 Im portsEstim ated
Mill
ion
m3 Imports
ProductionConsumptionExports
WOOD MARKETSGroup27
Transition: Imports to ExportsTransition: Imports to Exports
Plywood imports are slowing while plywood exports continue to explode!
China: Plywood Imports and Exports
0
1000
2000
3000
4000
5000
6000
00 01 02 03 04 05FS o urc e : S F A & WOOD M a rke ts
x000
m3
ExportImport
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Transition: Imports to ExportsTransition: Imports to Exports
+MDF imports have peaked while MDF exports continue to surge!
China: MDF Imports and Exports
0
500
1000
1500
00 01 02 03 04 05S o urc e : S F A &
C TI
x000
m3
ExportImport
WOOD MARKETSGroup29
Transition: Imports to ExportsTransition: Imports to Exports
Imports plunge as exports explode!
China: Laminate Flooring Imports and Exports
0
50
100
150
200
250
300
350
400
450
00 01 02 03 04 05Source: CC
x000
tons
ExportImport
WOOD MARKETSGroup30 35-50 Chinese workers = 1 Western worker!
China’s Wages = ~US $0.50/hour; ~$100/Month
China’s Wages = ~US $0.50/hour; ~$100/Month
Operating Labor: Monthly Wages
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000
Vietnam
China
Philippines
Thailand
Malaysia
Latin America
Hong Kong
E. Europe
Taiwan
Singapore
Korea
Oceania
W. Europe
USA
Nordic Countries
Canada
US$/Month
Source: WOOD MARKETS
WOOD MARKETSGroup31
China’s Industry ScaleChina’s Industry Scale
• The industry scale in China ranges from:
• World class (furniture, doors, MDF, paper);
• Moderate scale (plywood, flooring);
• Small scale (sawnwood, mouldings).
• The level of technology to meet export quality requirements is also critical (kilns, moulders, lacquer lines, finishing equipment).
• The future growth in the Chinese industry will likely include even larger, more high-tech plants that will incorporate scale and export quality.
WOOD MARKETSGroup32
• Increasing difficulty sourcing competitively priced raw materials.• Increased energy costs• Increased transportation costs• Increased labour costs.• Trade action - from US, Canada, Europe, other.• Competition - i.e., from Vietnam.• Lack of high-level management expertise.• Lack of branding, innovative designs• Other specific constraints by sector….
• Increasing difficulty sourcing competitively priced raw materials.• Increased energy costs• Increased transportation costs• Increased labour costs.• Trade action - from US, Canada, Europe, other.• Competition - i.e., from Vietnam.• Lack of high-level management expertise.• Lack of branding, innovative designs• Other specific constraints by sector….
Constraints Hitting Chinese IndustryConstraints Hitting Chinese Industry
WOOD MARKETSGroup33
Some Strategies Being ImplementedSome Strategies Being Implemented
To remain competitive, Chinese producers are increasingly:
• Substituting lower quality, lower cost domestic plantation wood for imported solid wood.
• Incorporating newer technology to not only increase product quality but to also to re-engineer the wood, using these alternative raw materials to produce export quality finished wood products at lower costs.
(= this a similar strategy employed by plantation pine exporters in Brazil, Chile and NZ. )
WOOD MARKETSGroup34
4. China’s Increasing Exports to USA4. China’s Increasing Exports to USA
• China continues to increase its export to high volume, high paying export markets such as the USA.
• Total China Exports of Wood Products to the USA in 2005 (excluding furniture):
= US$2.3 billion
WOOD MARKETSGroup35
US Imports from ChinaUS Imports from China
Exports of non-furniture wood products are just starting to get rolling = similar growth trend to furniture!!
US Wood Products Imports from China(excluding Furniture)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
96 97 98 99 00 01 02 03 04 05
Source: USDA
(Bill
ions
US$
)
WOOD MARKETSGroup36
US Imports: China is the #2 Wood Products Supplier to the U.S.*
US Imports: China is the #2 Wood Products Supplier to the U.S.*
*ValueBasis
Note: Excludes Furniture
US Imports of Forest Products
0
5
10
15
20
25
96 97 98 99 00 01 02 03 04 05
Source: USDA FAS;
Note:ExcludesFurniture
US$
Bill
ions
OtherSwedenMexicoMalaysiaIndonesiaGermanyChileBrazilChinaCanada
China’s imports growing at 80%/year
WOOD MARKETSGroup37
US Imports: China’s Commodity Product Growth has been Spectacular!
US Imports: China’s Commodity Product Growth has been Spectacular!
Note: Excludes Furniture
US Selected Wood Products Imports from China
0
300
600
900
1,200
1,500
1,800
2,100
00 01 02 03 04 05 Source: USDA
x 00
0 m
3
OTHERSH/W LUMBERPARTICLEBOARDS/W LUMBERS/W PLYWOODHARDBOARDMDFOTHER PANELSH/W PLYWOOD
A 10-fold increase since 2001
WOOD MARKETSGroup38
US Imports: China’s Finished Product Growth has also been Spectacular!
US Imports: China’s Finished Product Growth has also been Spectacular!
Note: Excludes Furniture
U.S. Imports of Finished Wood Products
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
95 96 97 98 99 00 01 02 03 04 05
Source: USDA-FAS
US$
x00
0
SOFTWOODFLOORING
HARDWOODFLOORING
BUILDERSCARPENTRY
A 10-fold increase since 2000!
WOOD MARKETSGroup39
China’s Competitiveness in Export Markets
China’s Competitiveness in Export Markets
A Variety of Chinese
products are assessed &
evaluated in our
CHINA BOOKReport:
Now Available
Chinese Export Product RatingFJ Mouldings |Stile & Rail Doors |Engineered Flooring |Solid Wood Flooring Detailed Laminated Flooring EvaluationSoftwood Sawnwood AvailableSoftwood Plywood in our Hardwood Plywood CHINA OSB BOOKParticleboard |MDF |Engineered Lumber |Source: WOOD Markets Group
Relative Rating of Chinese Products:Basis = Delivered to the U.S. Market
(Scale of 1 = Poor to 5 = Very Good)
WOOD MARKETSGroup40
5. China’s Increasing Exports to Europe5. China’s Increasing Exports to Europe
Total China Exports of Wood Products to the Europe in 2005 (excluding furniture):
= US$830 million (About 1/3 of the USA)
WOOD MARKETSGroup41
China’s Imports from Europe = StableChina’s Imports from Europe = Stable
Europe is still exporting logs and lumber to China
China: Imports from Europe
0
50
100
150
200
250
02 03 04 05 Source: CC
Mill
ion
US$ Hardwood
LumberSoftwoodLumberLogs
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China’s Exports to Europe = Rising FastChina’s Exports to Europe = Rising Fast
Big increase in furniture and plywood!
China: Exports to Europe
0
200
400
600
800
1,000
1,200
02 03 04 05 Source: CC
Mill
ion
US$ Flooring
DoorsParticleboardPlywoodFurniture
WOOD MARKETSGroup43
China’s Plywood Exports to Europe = Rising
China’s Plywood Exports to Europe = Rising
This is despite a number of publicized trade actions
China: Plywood Exports to Europe
0
100
200
300
400
500
600
700
800
02 03 04 05
Source: CC
x000
m3
WOOD MARKETSGroup44
6. China’s Approach to Business6. China’s Approach to Business
• China's purchasing (procurement) polices are inconsistent - they include some illegal log sources but also a move to buying from sustainable forest managed suppliers.
• Current Chinese Government policy measures (laws, taxes, tariffs, regulations, incentives) are generally open, but restrictive import duties still apply to some countries.
• Still issues on patronage and corruption, but overall, China is doing a good job compared to other ‘developing’ countries.
WOOD MARKETSGroup45
China is Learning & Improving to be a more Responsible Timber Purchaser!China is Learning & Improving to be a more Responsible Timber Purchaser!
1) China is aggressively encouraging domestic plantation development, with strong supportive policies on capital, taxation, & loans from gov’t. 2) China is Increasing the recovery rate of timber using newer technology and is encouraging the use of other substitute materials to wood.3) China & Myanmar timber trade: After several months of closed border trade to protest illegal log exports from Myanmar, China re-opened its border under new responsible rules. Timber importers in China will start paying an additional 10-15% as reforestation fee that China & Myanmar will share.
WOOD MARKETSGroup46
China is Learning & Improving to be a more Responsible Timber Purchaser!China is Learning & Improving to be a more Responsible Timber Purchaser!
4) China and Russia timber trade: • More investments in Russia are occurring and
measures are being made to promote legal and healthy timber trade between China and Russia.
• The main projects from China invested in Russia are still logging and primary processing.
• Recently, 18 Chinese wood processing company announcing that they will invest US$100 million in wood processing manufacturing in Sino-Russia zone where located in Ussurisk, Russia. This is the first large scale wood processing zone invested by China in Russia..
WOOD MARKETSGroup47
China is Learning & Improving to be a more Responsible Timber Purchaser!China is Learning & Improving to be a more Responsible Timber Purchaser!
5) FSC and Chain of Custody certification is accepted by Chinese companies step by step as more and more companies are in processing or considering in getting FSC and COC certification.
6) This partly in response to accusations that of China’s total log imports, some 90% originates in countries without sustainably managed forests or have a record of high illegal log exports.
7) The Chinese government imposed a 5% consumption tax on solid flooring as well as chop sticks from April 1st 2006 in China.
WOOD MARKETSGroup48
China is Managing its Economy & Natural Resources
China is Managing its Economy & Natural Resources
• Today the urbanization rate in China is 43%, and by 2020, the urbanization in China will be 55% - 60% -this will increase demand in forest/wood products.
• Housing investment and starts has been increasing 20%-30% per year and construction was 6.7% of GDP in 2003, increasing from 4.7% in 1991.
• With the increasing urbanization and living standard, the construction will continue to expand in next 5-10 years, maintaining high demand on construction and decoration.
WOOD MARKETSGroup49
Potential Constraints or Brakes on China’s Wood Processing Industry Potential Constraints or Brakes on China’s Wood Processing Industry
Less favorable policies and developments may be impacting China’s wood products export sector:
1) Recently, the VAT export rebate has decreased in some products to encourage more value-added & non-solid wood processing & exportsIt is estimated the VAT export rebate of other products, like plywood, will be cancelled or decreased in the coming years. 2) RMB exchange rate is increasing (but slowly).3) Labor costs are increasing. 4) Raw material costs are escalating.
WOOD MARKETSGroup50
Chinese Government & the EconomyChinese Government & the Economy• The Chinese state remains deeply entrenched in the economy & drives China’s business cycle.• According to official 2003 data, the state directly accounted for 38% of GDP & employed 85 million people (about one third of the urban workforce).• The state controlled $1.2 trillion worth of capital stock = 56% of the country’s fixed industrial assets. • The state is either a monopolist or a dominant player in the most important sectors.• The government maintains tight control over most investment projects via long-term bank credit and in granting land-use rights.
WOOD MARKETSGroup51
Chinese Government & the EconomyChinese Government & the EconomyPatronage:• Of the large- and medium-sized state enterprises (“corporatized”) in 2001, 70% of Party Committee members were on the board of directors. • All told, 5.3 million party officials—about 8% of its total membership and 16% of its urban members—held executive positions in state enterprises.• State enterprises are also miserably unprofitable: a median rate of return on assets was 1.5% and more than 35% of state enterprises lose money. • Dishonest officials face little risk of punishment as only 5.6%were criminally prosecuted.
WOOD MARKETSGroup52
Wealth & GovernanceWealth & Governance
• A recent study reports that <1% of Chinese households control 60+% of the country’s wealth.
• By comparison, 5% of the households in the USA own 60% of the wealth).
• According to the World Bank, China’s governance ranks in the bottom half of all the countries in the world. China under-invests in crucial social services, especially education and public health.
• But with a per capita income of nearly $1,500 ($4,500 if you consider people’s purchasing power), China is richer than many poor democracies.
WOOD MARKETSGroup53
Come see for yourself!
We are Hosting an ‘in-China’ International
Summit Conference &
Tour
Come see for yourself!
We are Hosting an ‘in-China’ International
Summit Conference &
TourShanghai, ChinaOct 28-29, 2006
Mark Your Calendars & Plan to Attend our “3rd Conference” in China
WOOD MARKETSGroup54
5. China Competitiveness Summary5. China Competitiveness Summary• Increased imports of raw material required: from North American, South American, Southeast Asia, Europe, Russia, etc.
• Rising raw material costs = a growing problem for some Chinese regions or sectors.
• Energy, oil, transport costs could squeeze costs further.
• Chinese are offsetting high raw material costs two ways:
• Using more domestic plantation species at lower costs;
• Incorporating more technology to engineer products and lower raw material input costs.
• China will continue to expand its exports where it can gain or maintain its competitive advantage & market access.
• Chinese “government financing” + government interest to create jobs = creating a formidable competitor…
WOOD MARKETSGroup55
China SummaryChina Summary• Will continue to be “the world’s engine of production” for a variety of commodity and value-added products
• Determining the “fit” with China is the key for many industries and companies.
= if you can’t beat ‘em, then join ‘em!
• If China (or Russia) “hiccup”, then look out for huge supply/demand dislocatons/opportunities!
• If they continue to both expand, then they will be both be formidable competitors.
International WOOD MARKETS Group Inc.Vancouver, B.C., Canada
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QUESTIONS??
Suite 501 - 570 Granville StreetVancouver, BC V6C 3P1
Tel: (604) 801-5996 / Fax: (604) 801-5997Email: [email protected]
www.woodmarkets.com
President
&Jane Guo
China Office Manager
International WOOD MARKETS Group Inc.Vancouver, B.C., Canada
Russell E. Taylor, RPF, MBA
Suite 501 - 570 Granville StreetVancouver, BC V6C 3P1
Tel: (604) 801-5996 or -5998 / Fax: (604) 801-5997Email: [email protected]
www.woodmarkets.com