Note
This analysis should be treated as a first iteration towards quantifying the order of magnitude of illegal wood-based product trade to and from China.

It clearly shows the probable importance of the USA as a market for illegal wood-based products and begs questions about the actual intent of the US President's "Initiative against Illegal Logging" - which, although in many ways welcome - does not appear to seek to address the USA's own illegal imports (and its role in driving illegality).

The analysis indicates that the import value of the illegal wood-based products which the USA is likely to import from China alone during 2006 is in the order of US$3.5 billion (mainly attributable to wooden furniture), roughly 200 times greater than the sum allocated to the USA's initiative against illegal logging initative.

During 2006, China was probably the world's leading importer of illegal timber and one of its principal suppliers of illegal timber.

China - illegal imports
A high proportion of China's imports of wood-based products are associated with illegality - here defined as "in conflict with either the letter or intent of the law or otherwise associated with corrupt practice".

Neither the State Foresty Administration nor the Ministry of Commerce appear (willing or) able to take responsibility for the manufacture and trade of illegal wood-based products. The clear and increasing weakness of Beijing relative to local government is a major handicap to both these institutions.

The following percentages are based on those which are estimated in "Which 10 Bilateral Flows Have Most Salience to International Effort Against "Illegal Timber"? They pertain solely to China's (production and imports) in 2007 - other percentages might be approriate in other years or for other importing countries. Indeed, China's imports from any given country are likely to contain a greater proportion of Illegal Timber than any those of other importing country.

Brazil: 70% (China's focus is almost entirely on tropical timber)
Burma: >90% (very large mismatch between official exports and declared imports; national law is in abeyance)
Cambodia: 100%
Cameroon: 80% (primarily logs)
China: 40% (production in excess of quota and other unaccounted production [Table 9] and [p4])
Congo (Brazzaville): 90% (flagrant disregard for the law, including by the country's current ruler in the granting of concessions; China's primary interest is logs but the law seeks processing prior to export)
Equatorial Guinea: 90% (flagrant disregard for the law concerning maximum allowable cut and de facto concession size attributable to one company (and its sponsors) which supplies most of China's imports)
Gabon: 80% (flagrant disregard for the law - China's primary interest is logs but the law seeks processing prior to export; tax not paid on two thirds of area allocated as forest concessions)
Guyana: 60% (flagrant disregard of forest policy concerning local processing prior to export; absence of management plans; logging other than by the legal concessionaire)
Indonesia (timber): 90% (mirror statistics indicate that customs fraud is apparent mainly in respect of supplies to China - justifying an increase above the 83% rate of illegal logging in natural forest)
Indonesia (pulp and paper): 90% (much pulpwood from natural forest; primarily from fraudulently financed mills)
Malaysia: 40% (primarily from Sarawak - improperly allocated concessions; illegal timber from Indonesia)
Mozambique: 80% (assuming Zambézia province is typical; log exports discouraged)
Papua New Guinea: 90% (surge in China's imports has undermined efforts to improve governance in the sector)
Russia (timber): 60% (absence of law enforcement, forest frontier moving west as resources become exhausted, pressure to maximise imports before application of log export tarrifs)
Russia (pulp and paper): 10% (FSC-certified supplies from Ilim's Bratsk mill for International Paper account for most of China's imports of pulp from Russia)
Solomon Islands: 90% (China accounts for the great majority of the excess over Annual Allowable Cut)

China - illegal exports
The table above indicates that 30% -40% of industrial consumption (IRW production + imports) by China's Timber sector might comprise Illegal Timber. In addition to that illegality in raw materials supply, estimates of the Illegal Timber content of China's exports should reflect (a) the extent of fraud in the description of the exported products, (b) compliance with environmental, planning, financial, labour and other regulations pertaining to their manufacture, and (c) composite products might have either a Legal Timber cores and Illegal Timber outer surface or vice versa. Consequently, it would seem reasonable to assume rather more than 40% of China's Timber sector exports comprise Illegal Timber. It would likewise seem reasonable to assume that llegal Timber accounts for more than one quarter of China's Paper sector exports - perhaps more given that the leading manufacturer accounts for much of China's imports of pulp from Indonesia and has been conspicuous as a buyer of Illegal Timber (as pulpwood) grown in China. That enterprise, through its parent group Sinar Mas and with one of China's major petrochemical groups (CNOOC) is promoting the conversion of natural forest in Papua to palm plantations for agro-fuel.

There is some validity to assertions that, if China exports any illegal timber, then it does so merely to meet demand for this in the countries to which those exports are destined. Such statements should prompt those destination countries to refuse to permit the import of wood-based products made in China if these are not credibly certified as being legal. Doing so would place much of China's timber industry, and those parts of China's paper industry which are associated with Indonesia, at risk. However, China accounts for an increasing share in the High Risk timber imports of several countries.

A few minutes' targetted analysis of UN Comtrade statistics shows clearly that China accounts for most of the growth in world trade in timber and that its timber exports are rising at about 30% per annum. Further, China appears to doing very little effectively to reduce its production (e.g. in Yunnan) and imports of Illegal Timber. It is therefore remarkable that the much praised EU FLEGT initiative appears to have assigned a very low priority to establishing a Voluntary Partnership Agreement with China. Indeed, China is probably the only country whose exports of Illegal Timber to the EU are rising.

The species from which the wood-based products which China exports in greatest quantity tend not (yet) to be declared in national trade statistics. A large proportion of those exports comprises commodities (notably furniture) for which, unlike most other major trading nations, China and its main partner - the USA - choose not to declare weight or other physical measure of quantity.

In order to overcome these shortcomings in trade statistics, assumptions have been made - most notably that the total roundwood equivalent volume of tropical, Chinese, Russian, North American and rubberwood in the trade in wooden furniture from China to the USA are 20%, 20%, 30%, 20% and 10% respectively. Analysis of China's timber imports from the USA and China's timber exports to the USA indicates that most of the latter probably derives from forests other than in the USA.