China Wood and Building Materials
Market
Fact Sheet #50
CINTRAFOR, in partnership with the Evergreen Building Product Association and the US-China Build program, is currently developing the “China Wood and Building Materials Market Sourcebook,” a resource for potential exporters of wood and building materials exploring marketing opportunities for their products in China. The Sourcebook, to be completed and made available this fall, provides a background to the Chinese market and potential export opportunities, cultural context, data on the country’s imports of wood products, information on domestic resources and constraints, as well as specific information on the four target urban markets of Shanghai, Beijing, Guangzhou and Chengdu.
China’s rapid economic development over the
past twenty or so years has lifted millions out of severe poverty, and
propelled many into extraordinary wealth.
China has emerged from virtual isolation to become the seventh largest
trading nation — and the sixth largest economy — in the world. As its
population increases, it is also becoming further urbanized: as of 2000, 40 of
China’s 663 cities already had populations over one million. Although China still has a large peasant
population, it is expected that urbanization rates could reach as high as 55%
by 2030. The country’s growing middle
class, of whom five or six million individuals are estimated to have savings
worth more than US $100,000, is creating a growing market for new forms of
consumption and a need for increased housing resources, and for accompanying
interior decoration. If the country’s
major cities are able to maintain their projected 9-11% per annum growth in per
capita income, by 2010 there could be a population larger than that of the
United States earning at least US $6,000 per year.
Housing Reform Stimulates New Construction
Under the Communist Party’s leadership, housing was
traditionally provided as a non-market benefit to employees of urban
state-owned enterprises. By the 1970s,
it was clear that the housing system had become an unaffordable burden for both
the government and enterprises. Housing reforms initiated in the early 1980s
have resulted in policies encouraging private home ownership, in turn leading
to consumer demand for increased living space and higher quality living
facilities. Important impacts of the
reforms include:
- Between 1980 and 2000,
urban per capita living space increased from less than four square meters
to ten square meters; by 2005, the government hopes to increase that
figure to 23 square meters, making average household living space
approximately 74 square meters.
- In order to realize
this goal, the government expects to construct at least 1.5 billion square
meters of residential building space in urban areas during the five-year
period 2001 – 2005. Annual housing
starts for the next several years could range from approximately four to
ten million, depending on the rate at which increases in per capita and
household living space are achieved.
Market for Wood Frame Construction Aided by New Building Codes
In order to finance home purchases, banks began
issuing consumption loans several years ago.
Chinese homebuyers now have access to several means of financing the
purchase of their own homes. Most homes
in urban areas fall within the category “economical” homes, in apartment
buildings built on public land owned by the government. China also has a rapidly growing upper
income class, who desire western-style wood frame construction (WFC) homes. Just a few years ago, developers did not have
the capacity or demand to build WFC homes; today, an annual 11,000 or so WFC
homes are built in or near major cities, including Beijing, Shanghai, Guangzhou
and Chengdu. In order to ensure higher quality construction
