KUCHING: Trading in wood products between China and Malaysia, which marks 50th anniversary of diplomatic relations this year, has seen a dramatic change in recent years.
For the past 14 years, China had been Malaysia’s largest trading partner but recently the trade in wood products between the two countries has changed dramatically, according to International Tropical Timber Organisation (ITTO) in its Tropical Timber Market Report.
Based on China’s Customs data, Malaysia was a major supplier of logs to China between 1998 and 2007, and China imported 29,300 cubic metres (cu m) of logs from Malaysia in 2003.
After the global financial crisis in 2008, China’s log imports from Malaysia fell, dropping to less than 10,000 cu m. Then, in 2020 and 2021, China imported only 4,633 cu m and 1,374 cu m of logs from Malaysia respectively.
“Malaysia was once a major exporter of plywood to China. China imported 2.08 million cu m of plywood from Malaysia in 1995 and plywood imports remained above 1 million cu m between 1995 and 2000, dropping to 196,000 cu m in 2022.
“China became a major plywood producer with production accounting for around 50% of the world total and so no longer needs to import plywood.
“China now exports plywood to more than 200 countries and accounts for about 30% of the world total. China’s plywood imports account for less than 1% of the world total,” added ITTO report.
According to China Customs, in 2023, the total value of forest product trade (including wood products and non-wood products) between China and Malaysia rose year on year by 16% to US$7.82 billion. The value of wood products and non-wood products amounted to US$3.42 billion and US$4.39 billion, up 24% and 10%, respectively.
In 2022, China mainly imported three categories of wood products — wood pulp; paper board, pulp and paper products; timber and timber products — from Malaysia. The value of these three major wood products accounted for 95 per cent of the national total value of wood products imported for the year.
On the other hand, China mainly exported three categories of wood products to Malaysia in 2022, and these are wood pulp, wood furniture and seats as well as timber & timber products, of which the value of these three major wood products made up 95 per cent of the national total value of wood products’ exports for the year.
In the first 11 months of 2023 (11M2023), China’s log imports from Malaysia surged 66 per cent to 30,017 cu m valued at US$10.69 million from 11M2022. Mixed tropical logs was the largest category of imports at 13,854 cu m, up 58 per cent year-on-year, while the imports of eucalyptus and kapur soared by 79 per cent to 5,575 cu m and 245 per cent to 3,942 cu m respectively. Also shipped from Malaysia were mixed hardwood logs (1,905 cu m), Red lauan (3,097 cu m) and mixed softwood logs (1,188 cu m).
On the other hand, China’s imports of sawnwood from Malaysia fell 12 per cent to 97,504 cu m worth US$34.05 million in 11M2023, down 23 per cent in value from 11M2022. The bulk of the imports comprised of mixed tropical sawnwood (89,570 cu m), down eight per cent from 11M2022, followed by Red lauan (4,047 cu m), up seven per cent from 11M2022, mixed sawn hardwood logs (2,677 cu m) ,up 19 per cent from 11M2022 and white lauan (1,180 cu m), a decline of 64 per cent from 11M2022.
Meanwhile, ITTO reported that wood products are among some agriculture products subject to provisional import tariff rates as of Jan 1, 2024. The tariff rates are lower than the most favoured nation tariffs in 2024 for wood products at six levels, namely 3 per cent, four per cent, six per cent, seven per cent, eight per cent and 12 per cent.
China’s State Council announcement on adjustments to trade tariffs for 2024 is to address domestic supply and demand, and to assist with the development of advanced manufacturing.
These adjustments include tariff waivers for key medical goods, tariff reduction on resources in short supply, critical equipment and key parts and certain agriculture products, and tariff increases on certain commodities.
The total number of tariffs imposed in 2024 is 8,957 tax items.
