CHINA'S GROWING TIMBER IMPORTS: BRIGHT OUTLOOK FOR US SALES

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• Publication Date: July 1, 1985
• Content Type: REPORT

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Directorate of _ Secret
Intelligence
Bright Outlook for US Sales
China's Growing Timber Imports:
Secret
EA 85-10125
July 1985
Copy 258
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7'~ =1 Intelligence
China's Growing Timber Imports:
Bright Outlook for US Sales
This paper was prepared by I Office of
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East Asian Analysis, with contributions fromC
=OEA. Comments and queries are welcome
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and may be directed to the Chief, China Division,
OEA
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Secret
EA 85-10125
July 1985
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China's Growing Timber Imports:
Bright Outlook for US Salesl 25X1
Key Judgments China has become a significant importer of logs from the United States
Information available since entering the market in 1979. Sales have increased nearly sevenfold
as of 24 June 1985 over the past four years to nearly $300 million, and, as a result, the Chinese
was used in this report.
now account for nearly a quarter of US log exports.
The increase is a result of two factors: China's need for timber to support
its economic modernization program and its desire to rebuild its depleted
forests by cutting back annual harvests. These factors create, we believe, a
continuing and long-term need for imported logs and, to a much lesser
extent, wood products.
We believe there is a bright future for US timber sales. Competition for
high-quality logs-the major US timber export to China-is weak. In
addition, China is considering several joint ventures that at least initially
will require increased imports. Finally, the timber trade is unlikely to
become embroiled in a dispute over a maritime agreement because most
timber is carried on third-party ships.
We do not, however, expect timber sales to grow fast or large enough to
offset the drop in grain sales. Chinese port congestion, bureaucratic
inefficiency, and Beijing's resistance to increasing purchases of wood
products, because of their relatively higher prices, will tend to keep the
growth at modest levels through the end of the century.
Secret
EA 85-10125
July 1985
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Timber Sales: A Growing Component of US-Chinese Trade
1
The Need for Imported Log and Wood Products
1
Exports to China: The Limiting Factors
4
Implications for US Sales
B. Distribution of Logs and Wood Product Imports
C. Characteristics of US Log Exports to Selected
Pacific Rim Countries, December 1984
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Forests now cover 115 million hectares, and total
timber resources are estimated at some 9 billion
cubic meters, according to recent Chinese press re-
ports. Even if all the forest lands contained well-
maintained, productive trees, China only would have
about 0.1 hectare of forest per person, compared with
1.5 hectares in the United States. The Chinese ac-
knowledge they are well below the world average of
0.9 hectare per individual.
Moreover, the current forest cover claim may include
a large volume of nonharvestable timber. In 1979, the
Chinese press claimed that only one-third of China's
forests was suitable for commercial logging. And, for
a number of years, the Chinese have been complain-
ing about overcutting, bad cutting, and inadequate
replanting offorest lands. In replanting, the emphasis
had been on quantity and not quality-whatever
seeds or seedlings were available were planted and
then ignored until cutting time. Then too, it is unclear
whether thinning products, which could amount to
some 20 percent of volume depending on specie, are
included in the 9 billion cubic meters of timber
resources. For example, the volume of thinning prod-
ucts is estimated at 14 to 16 percent of the total
production volume for Chinese fir, which, according
to the Food and Agriculture Organization of the
United Nations, makes up one-third of China's newly
afforested areas.
When a stand of trees is thinned, the remaining trees
produce larger logs and also provide a number of
thinning products because the Chinese use the entire
tree-even the litter is picked up. In addition to the
harvest of small-diameter logs during the thinning
process, large branches are salvaged for pulp with
smaller branches and twigs going for fiberboard
production. Some leaves and branches support local
fuel and agricultural needs. In some cases, however,
the removal of lower branches for fuel has been
excessive, impairing both tree growth and wood qual-
ity. According to an article by a Ministry of Forestry
employee, China annually harvests and consumes
about 70 million cubic meters of firewood, a 27
percent higher volume than that of logs extracted in
1984.
In 1982 China embarked on a major reforestation
effort designed to increase the timbered portion of
China's land area from 12 to 20 percent. The Minis-
ter of Forestry, Yang Zhong, at a recent National
Forestry Propaganda Work Meeting in Beijing,
stressed the importance of expediting afforestation of
barren hills as well as hillside fields with a slope of
25 degrees or more. According to the Chinese press,
there are over 66 million hectares in this category
Since 1970, China has afforested annually an average
4.8 million hectares, reaching an alltime high of 6.3
million hectares in 1983, the last year of available
data. Only 60 percent of 1983 afforested area, howev-
er, was planted to timber producing species, and
many of these will not reach maturity for over 50
years. The remaining portion of afforested area con-
sisted of shelter, fuel, and economic forests that
include cash crop fruit trees such as apple, pear, and
date as well as oil-bearing trees and shrubs.
In addition to the afforested areas, China also reports
a category of "reforested slash areas, " which we
understand to mean are logged-over areas that have
been replanted to timber forests. Hectarage planted
to reforested areas increased from 308,000 hectares
in 1971 to 509,000 hectares in 1983, with average
annual plantings of 406,000 hectares for the period.
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China's Growing Timber Imports:
Bright Outlook for US Sales F_
Timber Sales: A Growing Component
of US-Chinese Trade
Since 1980, grain, aircraft, and logs have been the
leading US commodities exported to China, account-
ing for a third to a half of the total value of US sales
there (see figure 1). And, while logs account for only a
small share of this total, they represent the most
dynamic category of commodity sales. As US aircraft
sales to China have fluctuated widely and exports of
grain have fallen because of China's bumper harvests,
log exports have risen dramatically from $41 million
Figure 1
Leading US Commodity Exports to
China by Value, 1980-84a
in 1980 to $277 million last year.
China's entry into the US log market, moreover, has
come at a time when other importers are cutting or
planning to cut log purchases (see figure 2). Log sales
to Japan-the largest US customer-dropped by half
to $643 million in 1984 from $1,303 million in 1980, a
result, according to industry sources, of the lower level
of Japanese housing starts over the past few years.'
South Korean log imports, which have increased since
1982, will probably fall after the completion of facili-
ties for the 1988 Seoul Olympics. With these markets
shrinking, China now accounts for nearly a quarter of
the value of US log exports, and that share appears
likely to expand (see figure 3).
The Need for Imported Log and Wood Products
The increase in log imports is a result of China's
attempts to provide adequate wood products for its
economic modernization efforts while reforesting its
own land area. After years of overcutting and inade-
quate replanting, the Chinese are trying to reduce
their annual timber harvest. Attempts thus far have
been unsuccessful-China has maintained an average
annual harvest of 52 million cubic meters over the last
seven years, and, in 1984, production reached a record
55 million cubic meters, despite an announced plan to
reduce the timber harvest by 10 percent. This year,
the Chinese press announced a new 10- to 15-percent
0 1980 81
^
^
Aircraft
Wood products
a Free on board (f.o.b.).
Source: US Bureau of Census, Standard International Trade Classification.
Revision 11.
harvest reduction goal, but US industry sources be-
lieve the new target also will be difficult to achieve
because of China's need for timber in its moderniza-
tion efforts.
Wood products, in fact, play an important role in
several key areas of economic modernization-in par-
ticular, construction, mining, transportation, and ex-
ports. For example, US industry sources consider
linerboard and pulp to be basic industries for modern-
ization in developing countries because of their impor-
tance in packing goods for domestic and international
shipping. According to the General Office of the State
Council, commodity damage caused by poor packag-
ing is a chronic cause of dissatisfaction with Chinese
' The 50-percent reduction in value of sales to Japan resulted from
both a reduction in the number of logs exported and a drop of 35
percent in price over this period. China and South Korea purchase a
slightly lower grade log than does Japan (see appendix C).F_
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Figure 2
US Log Exports to Selected
Countries, 1980-84a
Percent
80
60
Figure 3
Chinese Share of US Export
Market, 1980-84a
a Calculated from US S value, f.o.b.
Source: US Bureau of Census, Standard International Trade Classification,
Revision II.
merchandise; last year, inadequate packing caused
losses estimated at more than $3 billion. As a conse-
quence, the Chairman of the China Packaging Tech-
nology Association recently noted that corrugated
shipping cartons-made from kraft linerboard-are
now replacing wood, straw, and bamboo containers to
become China's primary packaging material.
China's official news agency recently announced
plans for developing an industrial base for producing
linerboard, with a production capacity of 200,000 to
300,000 tons by 1990. Although this new industry
may require increased imports of woodpulp into the
next decade, the Chinese are planning to substitute
"cotton straw," which is plentiful and contains about
25-percent long fiber-needed for strength in liner-
board-for some of the woodpulp used in the manu-
facturing process.'
' Most of the wood pulp imported from the United States contains
long fiber. Short fiber imports are used to manufacture such items
Grain
All exports
0 1980 81 82 83 84
3 Calculated from US $ value, f.o.b.
Source: US Bureau of Census, Standard International Trade Classification,
Revision 11.
In addition to wood products such as linerboard,
China uses logs to support tourist, transportation, and
other industries. US logs, largely Douglas fir and
some hemlock, are cut into lumber grades. Better
grade lumber is used for furniture, cabinets, windows,
and doors; much of this,
is destined for the tourist
industry and government agencies. The Chinese use
rough lumber for machine footings and packing cases,
while larger pieces of Douglas fir are used as structur-
al members and in bridge and port construction.
Industry sources believe the Chinese view the quality
of US logs as too high for sole use as mine props and
rail ties, although some ties are cut from the center of
the log. Those requirements are filled by lower quality
Soviet log imports, which reached an estimated barter
trade value of $1 billion in.1984. Consisting mainly of
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Figure 4. Log stacker working
haphazardly stacked logs in
limited space at Xingang in ear-
ly 1985 is an example of
China's inadequate log-
Figure 5. In comparison, spa-
ceous facilities and orderly
stacked logs are typical at US
red fir, red pine, and spruce, these logs
tend to
and high growth-ring counts
Some short-length hardwood logs are imported from
China's Asian neighbors; the bulk of these are used
for plywood and some furniture products. China
imports only limited amounts of building lumber, for
use mainly in new construction and as flooring nmte-
rials. The United States shipped about 70,000 cubic
meters of this type of lumber in 1984
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Figure 6. Each China-hound
log is tagged and individually
listed on all scaling documents.
According to industry sources,
China Timber Cooperation
scalers frequently use the ac-
companying scaling documents
to direct logs to Chinese saw-
mills because most Chinese
scalers have had little, U any,
experience with the Scribner
hoard foot log-scaling rules
used for DS log grading
Exports to China: The Limiting Factors
Despite what appears to be a growing and long-term
need for imported timber, several factors could con-
strain the growth of sales to China. The first is
chronic congestion at Chinese ports. Poor scheduling
of shipping, shallow drafts at many harbors, ongoing
construction, inadequate storage facilities, and inland
transport difficulties all contribute to the chronic port
congestion. The Chinese press has reported improved
turnaround times at a number of ports, but we believe
much of the time saved is being lost by ships waiting
for berthing space. Monthlong waits are not uncom-
mon, and heavy port congestion, at times with over
100 ships waiting, has caused delays of 60 days or
more.
In addition, most Chinese ports have inadequate log-
handling and storage areas for a large volume of
imported logs
it takes 12 days
or more to unload most log carriers, largely because
storage areas cannot hold a shipload of logs. He also
said that there are only two or three log stackers in
China, although notes that one
port ordered eight log stackers from Japan in 1983.
Moreover, China has a very poor infrastructure for
clearing logs from port areas. Poor coordination of
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Figure 7. Linerboard being ex-
posed to the elements because
tarps are barely covering the
rolls at Xingang port facility.
inland transport is one problem
reported that over $300,000 in demurrage was paid to
one ship in early 1984 largely because inland trans-
portation was not arranged in time. And, while water
and rails are the main movers of inland shipments,
Chinese railcars can only handle logs up to 12 meters
in length, thereby establishing a maximum length for
logs sold to China.
A second factor that complicates exports to China is
simple bureaucratic inefficiency. Over the past two
years, government organizations dealing with timber
imports have proliferated, forcing foreign dealers
increasingly to work with inexperienced personnel and
greater redtape. Until 1984, China National Native
Produce and Animal Byproducts Import and Export
Corporation (ChinaTUSHU) was the principal player
in foreign timber transactions, controlling either
directly or indirectly almost all imports of logs and
sawed timber. TUSHU operates a central buying and
inspection office for logs and other forest products
destined for China in a Seattle suburb.
Reports of unhappiness, both domestic and foreign,
with TUSHU's operational methods-including
charges that TUSHU was more concerned with meet-
ing quotas and saving money than with obtaining
suitable logs-may have been responsible for a num-
ber of personnel changes that included the departure
of personnel who had finally gained substantial ex-
perience in marketing practices and grading of logs in
the Pacific Northwest.
At the same time, at least one powerful contender
entered the market. Established in October 1979 as a
ministry-level enterprise directly under the State
Council, China International Trust and Investment
Corporation (CITIC) now claims the right to enter
into contracts for foreign log and timber sales.' CITIC
currently has operations in Brazil, Indonesia, and
Washington state and has formed a US-based ioint
venture-CITIFOR-with a US company.
expects the CITIC-CITIFOR opera-
tions in Washington state to supply 25 percent of
China's log imports from the Pacific Northwest in
19851
' In China, CITIC is involved in a number of joint ventures with
foreign partners and, in specific cases, has authority to buy
imported forest products. For example, CITIC supplied the lumber
and plywood for construction of the Jianguo Hotel in Beijing.
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Although modernization and new berth construction
have raised the overall capacity of China's ports, the
ports have been unable to handle efficiently the
increased shipments of US logs and wood products.
According to recent claims, mechanized equipment
can now handle some 80 percent of all loading and
unloading operations. Most log berths, however, have
experienced little, if any, increase in mechanization.
The Chinese prefer to unload logs in 2- to 3-ton
increments with shore-based cranes rather than use
the more efficient ship's cranes. The lack of special-
ized log stackers and forklift trucks for moving logs
within port areas, moreover, probably has kept the
Chinese from "preslinging" the logs, which permits a
considerable gain in time and efficiency. US west
coast ports can ship "preslung" logs in 20- to 25-
metric-ton bundles, greatly reducing unloading time
in countries with modern ports.
China is counting on completing construction on 120
deepwater berths by 1990, but only a few of these
have been identified as timber berths. China's official
news agency reports the port at Ningbo has scheduled
construction of a timber berth to be completed by
1990. The berth, capable of handling a 100,000-
deadweight-ton (dwt) timber carrier, will become
China's largest timber berth. Yantai port is planning
to complete a 25,000-dwt timber berth, also by 1990.
Most Chinese ports have at least one timber berth
capable of handling a 20,000-dwt ship. US log ship-
pers have a working agreement with China's log
buyers to load a log carrier to no more than a 9.5-
meter draft, which roughly equates to a 20,000-dwt
ship loaded with 4.5-5.0 million board feet of logs.
Other organizations authorized to deal with foreign
timber suppliers include the China Forestry Interna-
tional Engineering Company-established in Febru-
ary 1984-which conducts economic and technologi-
cal projects in cooperation with foreign countries and,
like CITIC, has authority to form joint ventures
abroad. The China Timber Corporation (CTC), subor-
dinate to the State Bureau of Materials and Equip-
ment, until recently controlled most of China's saw-
mills and also inspected imported logs and directed
their delivery to specific sawmills.' In April, however,
provincial timber cor-
porations and their subsidiaries were no longer under
the control of CTC in Beijing, but instead have the
option of consuming or selling logs locally
in February
1985, ndicateinistry awned on becom-
ing more involved in the allocation of domestic and
imported commodities in rural areas, while the Minis-
try of Light Industry, which operates most of China's
paper and pulp mills, has responsibilty for importing
most wood products. At times, other Chinese organi-
zations become involved with log or wood product
imports. China North Industries Corporation
(NORINCO), a trade organization under the Minis-
try of Ordnance Industry, imports wood for use in
manufacturing ordnance storage containers. The
Ministry of Railways buys rail ties direct from the
United States.
A third factor that will constrain the growth of timber
sales to China is Beijing's resistance to expanding
wood product purchases, especially lumber.' The Chi-
nese prefer importing logs-even though a ship can
carry three times more board feet of lumber than
logs-largely because of the number of people that
sawmills keep employed. The Beijing sawmill, for
example, employs 2,200 Chinese, whereas a similar
Bureau of Materials and Equipment, which is directly subordinate
to the State Council. However, the bureau appears to be known by
' Imports of other wood products such as linerboard and woodpulp,
though higher than lumber in total purchases, have been on the
decrease since 1981. Chinese purchases of US wood products have
accounted for less than 2 percent of worldwide annual US sales of
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CITIC Operations in Washington State
Last fall, CITIC began acquiring stumpage in Wash-
ington state. In August 1984, CITIC purchased a
tract of standing timber containing approximately 50-
60 million board feet in the Tacoma area. By Novem-
ber 1984, CITIFOR had acquired two more tracts
containing 349 million board feet on the Olympic
peninsula
CITIC began logging its initial purchase almost
immediately; the first shipment of logs was on its way
to China by December. Only four shipments had been
made by April 1985
US sawmill would have approximately 150 workers.
Moreover, the overrun materials-scraps, bark, and
sawdust-are all used by the Chinese.
Similarly, China does not want to import treated
railway ties because they cost 50 to 60 percent more
than untreated ties. But China's plans to increase
purchases of untreated ties from the United States
have slipped largely because of inadequate tie treat-
ment capacity,
China has only eight "retorts" for vacuum drying and
pressure treating ties.6
The Ministry of Railways purchased a number of untreated
railway ties from the United States over the last two years. The
first order for 8.5 million board feet was a direct deal between the
Ministry of Railways and a US company. A second order for 40
million board feet was placed through a Hong Kong company,
which subcontracted to its US subsidiary, which further subcon-
tracted to other US firms.
Figure 8
US Wood Product Exportsa to
Selected Countries, 1980-841,
South Korea
China
0 1980 81 82 83 84
a Includes linerboard, woodpulp, lumber, and so forth.
b Calculated from US S value, f.o.b.
Source: US Bureau of Census, Standard International Trade Classification,
Revision II.
Implications for US Sales
Although these factors will limit the range of products
sold and complicate negotiations and deliveries, we
expect the market for US logs to continue expanding
through the end of the century:
? Although recent changes in the management of
afforestation and cutting will eventually yield high-
er per hectare yields than existing stands, China's
critical shortage of harvestable timber will not be
alleviated for decades.
? The success of China's economic modernization
program depends in large part on improved trans-
portation facilities, an increased supply of energy,
and continuing availability of funds derived from
growing exports. Logs and wood products play a key
role in each of these growth components.'
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? There are no serious competitors for US logs for the
China market. The Soviet Union, which sells about
one-quarter as many logs to China as the United
States, has some high-quality timber, but log quali-
ty is reduced through poor harvesting techniques
and in rough handling during transport. Canada,
although it has enormous timber resources, is often
viewed by foreign buyers as an unreliable source of
logs because of shipping and export practices.'
? Although China has resisted US industry efforts to
expand lumber sales to China, US and other foreign
companies believe they can make some inroads in
the wood products market by establishing joint
ventures in China. A recently established joint
venture with the Philippines, for example, will pro-
duce plywood and at least initially provide the
Philippines with some export opportunities.
China's continuing
dependence on imported timber will prevent the
timber trade from becoming a political pawn as has
been the case with the US-Chinese grain and textile
trades. Moreover, timber shipments are not likely to
become a maritime issue. The high volume of grain
moving in Chinese-controlled bottoms contributed
heavily to the failure of the Sino-US Maritime
Agreement in 1983. Largely because of a lack of
suitable US or Chinese vessels, however, most US
logs are transported to China on third-flag carriers
(see appendix A).
China's drive both to replant its own forests and
increase timber purchases, moreover, presents oppor-
tunities for associated sales. The Chinese, for exam-
ple, are seeking foreign assistance to expand and
improve plantation plantings and forest nurseries. In
addition, China's port modernization program will
require foreign equipment and technological assis-
tance. A group of Chinese port officials visiting US
' Most of Canada's timber resources are owned by the Crown,
which requires an export permit valid for only 90 days. Canadian
logs, which are mainly transported by river and coastal rafts of
about 5 million board feet each, are advertised for sale only after
the raft is formed. At this time, Canadian sawmills can buy the raft
at the going price for domestic sawmill logs, in effect removing the
raft from the export market. because
of this practice, foreign buyers view Canada as an unreliable source
log-loading facilities last March focused on design
technology and equipment needs at modern log-
handling facilities, suggesting that China is planning
to build a number of additional log berths. The
Chinese probably will also consider the purchases of
additional log stackers and forklift trucks for moving
logs within existing ports.
On balance, we look for a growing market, but one
that will expand more slowly in the future as China
rebuilds its own forests and establishes wood product
industries. And, although we do not expect log sales to
become the single most important commodity export
to China, we look for them to at least partially offset
the drop in grain sales over the next few years.
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Appendix A
The Role of Chinese Vessels
in Timber Trade
Chinese vessels have a less significant role in the US-
Chinese wood product and timber trade than they
played in the grain trade, where the high volume of
grain moving in Chinese-controlled bottoms contrib-
uted heavily to the failure of the US-Chinese Mari-
time Agreement in December 1983. One of China's
maritime objectives is to carry as much of its foreign
trade in Chinese bottoms as possible. Thus the Chi-
nese tend to export on a cost, insurance, and freight
(c.i.f.) basis and to import on a free on board (f.o.b.)
basis. China's claim that 70 percent of its foreign
trade moves on China Ocean Shipping Company
(COSCO) vessels is, in our view, accurate. The failure
of the US fleet to get the one-third share of the US-
Chinese trade called for in the now-expired maritime
agreement is evidence of China's strong effort to carry
as much of its foreign trade cargoes in Chinese ships
as possible. In 1983, the US fleet, in fact, managed to
carry only 15 to 16 percent of the bilateral liner
cargoes and a negligible amount of the bulk cargoes.
Since then, the maritime interests of both countries
have been operating without an agreement.
Unlike other portions of the US-Chinese trade, most
of the log and wood product trade moves on a c.i.f.
basis with the US shipper selecting the carrier-in
most cases, a third-flag carrier. US log-exporting
firms or agents attempt to schedule the arrival of a
ship in a US port to coincide closely with delivery of
the last load of logs at the dock. With the high
interest rates of the past few years, firms tend to avoid
building up log inventories until close to ship arrival
time. Industry and port officials report there now are
times when logs cut in the morning are loaded on a
ship in the afternoon.
COSCO Liner Vessels in the Percent
US-Chinese Timber Trade
Volume
Shipments
Volume
Shipments
1984
0
0
6.13
27.03
1983
1.36
8.26
6.07
25.71
1982
0.36
2.15
24.69
30.10
1981
NEGL
3.33
1.87.
10.48
1980
0
0
0
0
Source: Port Import Export Retrieval System (PIERS) Journal of
Commerce.
Third-party tramp and bulk service (charter) vessels
carried an average of 65 percent of the volume of US-
Chinese log trade or 57 percent of the shipments and
an average of 76 percent of volume or 46 percent of
shipments of wood products over the past five years.
Third-party liner or scheduled services carry most of
the remaining trade. In 1984, approximately 200
timber carriers, carrying an average cargo load per
vessel of 4.5 million board feet or 17.5 thousand cubic
meters of US to s, were involved in the US-Chinese
log trade. this generally is a 25X1
one-way trade because less than 10 percent of timber
carriers obtained a back-haul cargo. Like the Chinese,
US-flag operators carry virtually none of the US-
Chinese trade in log and wood products, largely
because of a lack of suitable vessels. Except for
COSCO's brief entry into the liner trade in 1982,
shippers generally are avoiding COSCO ships be-
Although China's merchant fleet has added modern
timber carriers, they have not been overly active in
the US-Chinese log trade. COSCO vessels carry
almost no logs (see table). In 1983, COSCO's best
year, over a third of the volume in logs consisted of
railway ties and these were carried on two trips by a
14,000-deadweight-ton roll-on/roll-off cargo ship. In
the wood product trade, COSCO did slightly better,
carrying 6 percent of trade volume in 1983 and 1984,
well below the 25 percent it carried in 1982.
cause,
these ships are inefficient and often delayed unexpect-
edly.
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Appendix B
Distribution of Logs and
Wood Product Imports
US logs and wood products were unloaded at 10 of
China's 15 major seaports and at two Yangtze River
(Chang Jiang) ports in 1984.$ The distribution of logs,
however, varied widely along the coast. Shanghai,
near the mouth of the Yangtze River, and Nantong
and Zhangjiagang in the river's lower reaches,
handled approximately 50 percent of 1984 US log
imports (see figure 9). US log imports accounted for
about 2 percent of total volume handled at each of the
three ports. Assuming volume was split evenly be-
tween imports and exports, US log imports made up
about 4 percent of import volume at these ports.
These ports also handle log imports from other coun-
tries including the USSR.
Qinhuangdao and Xingang, two ports in close proxim-
ity to Beijing, handled 14.9 and 2.7 percent, respec-
tively, of US log imports. Covering the coastal area
between Beijing and Shanghai, the ports of Yantai,
Qingdao, and Lianyungang together handled 26 per-
cent of US log imports. Lianyungang's fourth-place
ranking as a US log importer probably stems more
from its function as the eastern terminus of China's
major east-west rail line than as a major industrial
city. In contrast, the river ports of Nantong and
Zhangjiagang, now being developed to lighten the
traffic load on Shanghai, can supply the edges of
Shanghai's industrial complex as well as transship
logs upriver. Nantong's importance as a timber im-
porter would increase
joint-venture sawmill
becomes operationa near the port.
industry sources report US logs are distributed along
the length of the Yangtze with some logs going as far
inland as sawmills in Sichuan Province
In 1984, only five of the 12 above log ports handled
US wood products, and these mostly of low volume
compared with logs (see figure 10). Huangpu, in South
China, was the exception, handling nearly equal
The Ministry of Communications lists 15 major seaports: Dalian,
Yingkou, Qinhuangdao, Tianjin (Xingang), Yantai, Qingdao, Lian-
yungang, Shanghai, Ningbo, Shantou, Huangpu, Zhanjiang, Hai-
Figure 9
China: Imports of US Logs, 19848
Shanghai
Qinhuangdao
Qingdao
Lianyungang
Yantai
Nantong
Xingang
Ningbo
Zhanjiang
Huangpu
Zhangjiagang
Dalian
0
Percent
a Volume by port.
shares of log and wood products. In addition, 3.0
percent of US wood products imported by China were
transshipped through Hong Kong (see figure 11).
Another 1.7 percent of US wood products, shipped
mostly in small lots, was transshipped through other
foreign ports. Because only the country of destination
is entered on US customs documents, transshipments
cannot be linked to specific Chinese ports.
25X1
25X1
25X1
25X1
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Figure 10
China: Imports of US Log and
Wood Products, 19848
Logs
Shanghai
Qinhuangdao
Qingdao
Lianyungang
Yantai
Nantong
Huangpu
Xingang
Ningbo
Zhanjiang
Zhangjiagang
Dalian
Hong Kong
Unknown
0
Percent
a Volume by port.
Source: Port Import Export Retrieval System (PIERS) Journal of Commerce
Figure 11
China: Imports of US Wood
Products, 1984a
Qingdao
Huangpu
Shanghai
Xingang
Dalian
Hong Kong
Unknown
a Volume by port.
Source: Port Import Export Retrieval System (PIERS) Journal of Commerce.
In the wood products area, China mainly imported the miscellaneous wood products such as finished
kraft linerboard and woodpulp from the United States lumber and flooring were transshipped through Hong
in 1984. And linerboard shipments-80 percent of Kong with negligible amounts going directly to a
total wood products-far surpassed those of pulp. Chinese port.
Only five of China's seaports handled US linerboard
imports in 1984. Moreover, the bulk of linerboard, 95
percent, was unloaded at only four of these ports-
Qingdao, Huangpu, Shanghai, and Xingang. Like
logs, a small amount of linerboard was transshipped
through Hong Kong and other foreign ports. Most of
25X1
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Appendix C
Characteristics of US Log Exports to
Selected Pacific Rim Countries, December 1984
(per thousand
board feet)
Log b
South Korea
$280
K-sort-low-quality log still of
export quality, mostly hemlock.
Log of rough nature-showing
bark scars and fresh knot indi-
cators where limbs were broken
or cut off.
Diameter-8 inches and up.
Length-20 to 40 feet, average
34 feet.
Averages 150 to 180 BF c per
log.
3 or better
China
$295 to $300
C-sort-middle-quality log,
mostly Douglas fir.
Clear, smooth log, knot indica-
tors where limbs are partially
healed or smoothly cut.
Diameter-12 inches and up;
allowing up to 10 percent 8 to
11 inches.
Length-20 to 40 feet, average
35 feet.
Averages 280 to 300 BF per
log.
Allowing up to 90
percent grade 2 and
10 percent grade 3
Japan
$325
High-quality Douglas fir log.
Slick, smooth log, looks better
than C-sort, knot indicators
healed over where limbs were.
Annual ring count-six or more
per inch.
Diameter-12 inches and up
for grade 2; J-sort, 8 to 11
inches for grade 3.
Length-20 to 40 feet, average
36 feet or better.
Averages 320 to 350 BF per
log.
2 or better; some 3
a f.a.s.-free alongside ship.
b Logs are sorted by standards agreed to by the foreign buyers and
the US log suppliers.
c BF-board feet (Scribner).
d Gross scale-Scribner board foot volume before deduction for
defects.
c Price differences also are partly explained by the fact China buys
in bulk.
t Net scale-Scribner board foot volume minus deductions for
defects.
Standard and better grade lumber
defects not to exceed 15 percent of
gross d scale.
Construction and better grade lum-
ber in amounts of not less than 65
percent of nett scale, or B grade
and better lumber in amounts of
not less than 25 percent of net
scale.
Construction and better grade lum-
ber in amounts greater than that
produced by C-sort.
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Figure 12. Rough, knotty
K-sort logs stacked for export
Figure 13. Smoother quality
('-sort logs destined for China.
J-sort logs would he similar in
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