As a rapidly growing economy, China has been facing the conflict of strong demand for wood materials and domestic scarcity of forest resources. Real estate industries, infrastructure construction and furniture manufacturing industries are currently the major end consumers of logs, wood and timber in China. For this, the China Logging market relies considerably on imports.
Industry revenue experienced volatile growth in the five years to 2013, with annualized increases of 7.8%. After strong growth in 2007, the subprime mortgage crisis in the United States and global economic uncertainty in 2008 led to a considerable drop in China's log demand and declining log prices in global markets. The downward trend continued in 2009, causing industry revenue to fall further. However, the economic recovery in 2010 and 2011 greatly boosted log demand and product prices, leading to strong industry revenue growth. Industry revenue experienced lower growth of 3.5% in 2012 due to the economic slowdown in China. A recovery is expected in 2013 with industry revenue growing 8.1% to amount to $14.7 billion.
Following a 19.2% decline in log imports in 2008, imports dropped a further 8.6% in 2009 due to decreasing volumes and prices. With the economic recovery and rising log prices, industry imports rebounded sharply by 40.5% and 27.9%, respectively, in 2010 and 2011, accounting for about 40.0% of domestic demand. Imports dropped again in 2012 mainly due to the sluggish performance of major downstream industries. In 2013, imports are expected to amount to $7.5 billion, representing 36.4% of domestic demand.
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