Abstract: China Market & the Competition, Matthew Brady, AF&PA China

Bilateral trade in forest products between China and the US has grown significantly in recent years, to over US$3.2 billion (excluding furniture.) China, despite facing significant fiber resource supply deficits, has become an increasingly important player in the export of forest products to global markets. US forest products producers now face increased competition not only within China, but more and more from China-based producers in both Asian export markets and at home.

China's competitive challenge has been fueled, in part, by an aggressive effort by the Chinese government to not only encourage domestic investment and expansion in value-added forest products processing industries, but also reduce dependence on imported processed wood and paper products and imported fibre raw materials. The measures adopted to achieve these goals have included a range of direct and indirect subsidies, trade and investment policies, tax and financing incentives, and increased regional autonomy in approving new processing investments. Although it is unlikely that China will to meet its total wood fibre and wood/paper processing production targets, the competitive challenge faced by US forest product producers looks certain to intensify.