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China Tightens Global Timber Control with $5.6B ASEAN Deals

Bamboo and wood flooring, "intelligent furniture manufacturing", biomass energy, forest carbon sequestration, and forestry finance amongst the multi billion dollar projects secured.


Mon 27 Nov 23

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As the world descends on Dubai for the COP28 World Climate Action Summit, China’s grip on global timber supply chains is strengthening after more than US $5.6 billion of forest projects were awarded to ASEAN member countries during the World Forestry Industry Conference in Nanning, Guangxi Zhuang on Saturday.

As reported by Chinese State Media, the World Forestry Industry Conference is part of the China-ASEAN Expo (or CAEXPO) – one of the world’s largest expositions, promoting cooperation between China and ASEAN members in trade, investment and tourism.

The theme was “Green Forest Industry, Bright Cooperation Future,” with more than 5,000 participants from across the region attending the conference. The projects include bamboo and wood flooring, “intelligent furniture manufacturing”, biomass energy, forest carbon sequestration, and forestry finance.

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Chinese State Media covering the first World Forestry Industry Conference at Nanning International Convention and Exhibition Center in Nanning, capital of south China’s Guangxi Zhuang Autonomous Region, Nov. 25, 2023. (Photo Credit: Xinhua)

ASEAN, which in 2002 signed the China – ASEAN Free Trade Agreement (ACFTA), is a partner in China’s Belt and Road initiative, with most countries “perceiving the initiative to be an opportunity to build up their infrastructure and boost their domestic economy, especially ahead of an anticipated slump in global growth.”

Last month, Wood Central reported that Kao Kim Hourn, secretary-general of ASEAN, said the Belt and Road Initiative has promoted global and regional connectivity, and ASEAN will have more opportunities in infrastructure development.

Wood Central understands that the projects were awarded to ASEAN countries that share a border with China’s southern mainland, with US-based 360 Info reporting that its geography shapes the type of projects funded.

20190128 futuredevelopment map1
More than 30% of the world’s forests are connected to the Belt and Road Initiative trade routes – here US research firm Brookings has demonstrated the BRI’s role in driving global deforestation (dated 2019).

China’s southern mainland forms a land border with many ASEAN countries, which US-based 360 Info reports shape the type of projects funded.

“China has been the only country to invest in Myanmar consistently since 1988 and has taken a special interest in the country,” 360 Info said.

As reported earlier this month, the Myanmar conflict is now cutting off Teak supply to China – exported from China to European and North American markets –  with China being the junta’s most prominent financial backer since the coup in 2021.

Notably, this includes timber and, more specifically, teak – with Maynmar supplying 40% of the world’s supply (Tectona grandis).

“Along with two highways, China and Myanmar are working on a deep sea port in Kyaukpyu and launched a joint radar and satellite communication laboratory in 2018,” according to 360 Info.

Singapore, a global trading post for timber supply chains, is not just a partner in the Belt and Road “but also a founding member of the Beijing-based Asian Infrastructure Investment Bank (AIIB), a World Bank alternative.”

In 2016, the Chinese controlled state media detailed the launch of the Asian Infrastructure Investment Bank – a key part of the Belt and Road Innitative. Footage courtesy of @cgtnamerica.

Wood Central understands that the AIIB is the vehicle that Chinese-controlled businesses and commerce use to invest in “smaller and greener projects” to achieve decarbonisation.

It includes timber projects, with the AIIB helping the region build “Infrastructure for Tomorrow (i4t)— including green infrastructure with sustainability, innovation and connectivity at its core.”

Since 2016, the bank has expanded to include more than 100 approved Members representing approximately 79% of the global population and 65% of the world’s GDP – with its share now growing compared to the World Bank and the Asian Development Bank as a source of funding for regional projects.

Often described as “the World’s Factory”, the loans are helping to supercharge China’s plywood manufacturing domination, with more than 70% of the world’s manufactured plywood either produced in mainland China or via Chinese-owned interests in Malaysia and Indonesia.

Author

  • Jason Ross

    Jason Ross, publisher, is a 15-year professional in building and construction, connecting with more than 400 specifiers. A Gottstein Fellowship recipient, he is passionate about growing the market for wood-based information. Jason is Wood Central's in-house emcee and is available for corporate host and MC services.

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