PD 480-07 Rev.2 (M) - China - ITTO

INTERNATIONAL TROPICAL TIMBER ORGANIZATION

ITTO

PROJECT DOCUMENT

TITLE: DEMAND AND SUPPLY OF TROPICAL WOOD PRODUCTS IN CHINA TOWARDS 2020

SERIAL NUMBER: PD 480/07 Rev.2 (M)

COMMITTEE: ECONOMIC INFORMATION AND MARKET INTELLIGENCE

SUBMITTED BY: GOVERNMENT OF P.R. CHINA

ORIGINAL LANGUAGE: ENGLISH

SUMMARY: This project is a follow up to ITTO PD 25/96 Rev.2（M）：”China’s Consumption of Forest Products and Its Demand for Them from the International Tropical Forest Products Market by the Year 2010”. At present China not only has become the largest importer of tropical logs in the world，but also is a global timber processing center and important exporter of tropical wood products. China plays an increasingly important role in the global processing and trading chain of tropical wood products. With the rapid development of the wood processing industries and housing starts, China‘s demand for tropical wood products will continue to increase and this will certainly affect world timber market. Therefore，it is of great significance to analyze and forecast future supply and demand of China’s tropical wood products. The project will give a whole picture of China’s demand and supply of tropical wood products by 2020 through in-depth investigations on productive capacity of tropical wood products processors and the end uses of imported tropical logs and consumers’ preference, and analysis of regulations and policies related to wood products trade. This project is aiming to provide reliable information on China’s tropical forest product market which could be used as reference either by tropical log exporting countries in making market strategies or by domestic related authorities in making policy decisions, so as to promote close cooperation between ITTO producers and consumers and contribute to sustainable development of the global tropical wood product market.

IMPLEMENTING AGENCY:

THE INSTITUTE OF FORESTRY POLICY AND INFORMATION CHINESE ACADEMY OF FORESTRY (CAF)

DURATION: 24 MONTHS

BUDGET AND PROPOSED SOURCES OF FINANCING: SOURCE CONTRIBUTION IN US$

ITTO: 263,520

Implementing Agency: 147,468

TOTAL: 410,988

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CONTENT

PART I CONTEXT ......................................................................................................................................... 1

1. ORIGIN .................................................................................................................................................... 1 2. SECTORAL POLICIES ................................................................................................................................. 2 3. PROGRAMS AND OPERATIONAL ACTIVITIES .................................................................................................. 2

PART II THE PROJECT ................................................................................................................................ 4

1. PROJECT OBJECTIVES .............................................................................................................................. 4 1.1 Development objective .................................................................................................................... 4 1.2 Specific objective ............................................................................................................................ 4

2. JUSTIFICATION .......................................................................................................................................... 4 2.1 Problems to be addressed .............................................................................................................. 4 2.2 Intended situation after project completion ...................................................................................... 7 2.3 Project strategy ............................................................................................................................... 7 2.4 Target beneficiaries ......................................................................................................................... 8 2.5 Technical and scientific aspects ...................................................................................................... 8 2.6 Economic aspects ........................................................................................................................... 9 2.7 Environmental aspect ...................................................................................................................... 9 2.8 Social aspect ................................................................................................................................... 9 2.9 Risk ................................................................................................................................................. 9

3. OUTPUTS ............................................................................................................................................... 10 Specific objective ................................................................................................................................. 10

4. ACTIVITIES ............................................................................................................................................. 10 4.1 Output 1.1 Research report - Outlook on demand and supply situation of tropical wood

products in China in 2020 ............................................................................................................. 10 4.2 Output 1.2 Analysis report - Productive capacity of Chinese tropical wood processing

enterprises and the end uses of the imported tropical logs ........................................................... 11 4.3 Output 1.3 Investigation report: - A survey on consumers’ preference on tropical wood

products in China .......................................................................................................................... 11 4.4 Output 1.4 Analysis report - Conflict issues and policy trends on China’s trading of

tropical wood products .................................................................................................................. 11 4.5 Output 1.5 Holding an international workshop – “Perspective on Global Tropical Wood

Products Market: Potential and Challenge” and publishing proceedings ....................................... 11 4.6 Output 1.6 Publishing the China’s Forest Products Market Information in both Chinese

and English ................................................................................................................................... 11 5. LOGICAL FRAMEWORK WORKSHEETS ....................................................................................................... 12 6. WORK PLAN ........................................................................................................................................... 14 7. BUDGET ................................................................................................................................................. 17

7.1 A Overall budget by activity (breakdown) US$ ............................................................................... 17 7.1 B Budget by Activity ITTO Contribution（US$） ............................................................................ 21 7.1 C Budget by Activity China Contribution（US$） ........................................................................... 24 7.2 A Yearly Project Budget By Source—ITTO (US$) ........................................................................... 27 7.2 B Yearly Project Budget By Source—E. Agency/Host Government ................................................ 27

PART III OPERATIONAL ARRANGEMENTS ............................................................................................. 28

1. MANAGEMENT STRUCTURE ..................................................................................................................... 28 2. MONITORING, REPORTING AND EVALUATION .............................................................................................. 28 3. FUTURE OPERATION AND MAINTENANCE ................................................................................................... 28

PART IV TROPICAL TIMBER FRAMEWORK ............................................................................................ 29

1. COMPLIANCE WITH ITTA 1994 OBJECTIVES .............................................................................................. 29 2. COMPLIANCE WITH ITTO YOKOHAMA ACTION PLAN 2002～2006 ............................................................... 29

ANNEX .......................................................................................................................................................... 30

ANNEX 1 A PROFILE OF IMPLEMENTING AGENCY ......................................................................................... 30 ANNEX 2 CURRICULA VITAE OF THE KEY STAFF ........................................................................................... 30 ANNEX 3 ASSESSMENT BY THE THIRTY-SIXTH EXPERT PANEL ....................................................................... 31

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Part I Context 1. Origin With the rapid development of national economy and constant increases of living standard of the people, China’s domestic demands for wood products increase rapidly in recent years. At the same time, due to the rapid development of globalization of the world economy, and the significant advantage of low labor force cost and huge market potential in China, global wood products manufactures are gradually transferring to China, some enterprises from developed countries and regions such as North America, Europe and Japan are transferring their wood manufacture to China one after another. China has become the manufacture and trade center of wood products in the world. Therefore, due to the fast growth of domestic demands and the strong drive of export demands, wood products manufacture industry develops rapidly in China. For instance, the output of wood-base panel increased to 74.3 million cubic meters in 2006 from 10.6 million cubic meters in 1998, the average annual growth rate reached 27.6%; the production of wooden flooring increased to 311 million square meters in 2006 from 94.2 million square meters in 2000, the average annual growth rate was 22.0%; the production value of wooden furniture increased to 430 billion yuan in 2006 from 87 billion yuan in 1998, the average annual growth rate was as high as 22.1%. At the same time, the export of furniture increased rapidly as well, the export value of wooden furniture increased to US$8.8 billion in 2006 from US$1.0 billion in 1998, the average annual growth rate reached 30.8%. China has now become the largest production and export country of furniture, plywood and wooden flooring in the world. However, owing to shortage of domestic forest resources, and particularly due to the fact that commercial timber production for natural forests was drastically reduced since the implementation of Natural Forest Protection Program (NFPP) in 1998, the gap between supply and demand for timber is becoming bigger and bigger. Therefore, China has to import large amount of timber to meet her domestic demands. China has now become the largest country of logs import and the second largest country of wood products import in the world. China’s consumption of tropical wood products (log and sawnwood) was mainly met by international market. China imported 32.2 million cubic meters of logs in 2006, of which over 7 million cubic meters are tropical logs which has accounted for about 50% of export of tropical logs in the world. According to the development trend of national economy, and constant growth of export trade of wood products, it can be estimated that the demand potential for tropical timber will be great in China. An internet questionnaire conducted by ITTO also showed that China would be the largest consumption country of tropical timber. A relevant report even predicted that the demand for wood products in China would change the structure of global market and trade of wood products greatly. China has been and will still be the focal point for her demands for wood products, especially for tropical wood products in the global markets. In addition, China has been subjected to criticism and censure from some NGOs for its imports of great deal of timber from foreign countries. At the same time, more and more countries started to restrict or prohibit exporting tropical logs, the voice combating illegal logging and trade is becoming stronger and stronger. It is necessary for Chinese government to take effective measures to readjust the development of forest industry in the context, and make great effort to reach the balance between supply and demand of wood products market. In order to realize the objective, it is the most important task to get clear understanding of the situation and future trend of supply and demand of wood products market, so as to provide bases to the relevant authorities for their decision making, as well as provide important market information to ITTO member countries. Therefore, as a follow up of the ITTO project PD 25/96 Rev.2（M）(1997-1998), “China’s Consumption of Forest Products and Its Demand for Them from the International Tropical Forest Products Market by the Year 2010”, the project will study the factors which influence domestic consumption and export of tropical wood products in the new era and forecast the supply and demand of tropical wood products in China in 2020. The outputs of the project will not only provide references to domestic authorities for making wood products market policies, but also provide market information to ITTO producer and consumer countries for making sound marketing strategies, which will help to facilitate close cooperation between China and other ITTO member countries, and ultimately promote sustainable development of international trade of tropical wood products.

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2. Sectoral Policies With economic development, social progress and improvement of people’s living standard, forestry must meet not only the diversified demand of social for timber and other wood products but also the need for ecological improvement and safeguarding national ecological security in China. Ecological demand has become a priority of society from forestry. China is in a critically transitional period, experiencing a historic shift from a focus on timber production to ecological improvement. Forest sectoral policies are mainly displayed in the five-year forestry plan, the outlines of the tenth and the eleventh five-year forestry plans are as followings: The main task of Forestry Tenth-Five Year Plan (2001-2005) was to carry out six major programmes, namely: Natural Forest Protection programme (NFPP), Returning Farmland to Forest and Grass Programme, “Three-North” and Shelterbelts System programme, programme of sand control around Beijing, Wild Plant and Animal Protection and Nature Reserve Development programme and programme of Forestry Industrial Bases Development with Fast-Growing and High-Yielding Plantations in Key Areas. These programmes are priority objectives for the realization of China’s sustainable forestry. Since 1998, owing to the implementation of NFPP, commercial timber production for natural forests was drastically reduced and the domestic plantation resource is insufficient to supply the shortfall. In order to satisfy the demand for wood products, the government has a policy to encourage timber imports. More and more timber manufacturers seek for timber suppliers in foreign countries, especially the tropical timber. So 1998 is also a sign year when China involved in global wood products trade more and more and became an important member of international wood products market. The Forestry Eleventh-Five Year Plan (2006-2010) indicates that China will continue to implement NFPP, stopping commercial logging of natural forest located in upriver areas of the Yangtze River and the Yellow River, reducing timber production in Northeast and Inner-Mongolia state-owned forest areas. At the same time, the Forestry Eleventh-Five Year Plan attaches importance to forestry industry. It also gives emphasis to the harmonization of forest ecological system, forest industry system and forest culture system. The objectives of forest industry development in 2010 are: The total production value of forest industry will reach 1200 billion yuan, the production of commercial timber will reach 99.8 million cubic meters, more than 70% of that will come from plantation, and the integrated utilizing rate of timber will reach 70%. A relative developed forest industry system will be established with large scale, diversified products, optimized distribution, high quality and efficiency, strong competition. According to the Forestry Eleventh-Five Year Plan, wood-based panel manufacture and furniture and wooden products manufacture will focus on the following areas: Wood-based panel manufacture: Three wood-based panel production groups will be strengthened, which

locate in the South, Northeast and East of China respectively, namely south wood-based panel production group, northeast wood-based panel production group, and north and east wood-based panel production group. Some large-sized enterprises will be supported specifically to ensure the harmonious development of small, middle and large-sized enterprises.

Furniture and wooden products manufacture: There are two key areas, one locates in coastal region including Guangdong, Zhejiang, Fujian, Jiangsu, Shangdong and Liaoning provinces, where furniture manufactures are oriented to produce high-quality furniture used for export, especially classical furniture and bamboo furniture. The other locates in Sichuan, Jiangxi and Hunan provinces, where furniture manufactures are oriented to domestic market.

3. Programs and Operational Activities Because of the long period needed for forest plantations to reach maturity and because plantations in China cannot produce the preferred large diameter and high quality logs, the country will have to import these logs and wood products to address China’s future timber shortage. To encourage imports of raw materials, such as timber, the Chinese government has adopted the measures to abolish or greatly lower import tariff. For example, there is a zero-duty policy for the import of logs, sawnwood and pulp, and tariff on other wood products such as plywood and veneer have also been greatly reduced. In addition, the policy of relaxing import operation regulations has been developed for domestic enterprises undertaking timber operation and foreign trade. The plan is to further relax restrictions on who can trade internationally.

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The overall strategy to address imbalances in timber supply and demand is to realize self-sufficiency in fiber timber and non-veneer type wood based panel in 2020, even produce some surplus while, at the same time, relying on imports for high quality, large-diameter timber especially hardwoods. The department in charge of forestry has formulated medium and long-term plans to vigorously develop the building of fast-growing plantation bases (note: this project was started on August 1st, 2002). At the same time, in order to combat illegal logging and protect natural forests, Chinese government formulated a system of domestic logging quota and the NFPP plan. During the Tenth Five-year plan (2000-2005), domestic timber production reached 223.1 million cubic meters and will reach 248.2 million cubic meters in the Eleventh Five-year plan (2006-2010), increasing 11.2%. It shows the domestic timber supply will continue to be low in future. It is a fact that the awareness of sustainable forest management, combating illegal logging has been raising, Chinese government take active part in international initiatives such as EU-FLEG to improve marketing and distribution of tropical timber and timber product exports from sustainably managed and legally harvested sources and which are legally traded. At the same time, the guideline of developing forest resources in foreign countries is being established in order to regulate overseas forest enterprises’ actions. In addition, forest certification develops rapidly in China, the national standard of forest certification has been issued and carried out pilot test in some regions in China. China’s huge demands for forest products are mainly met by two sources: domestic resources and imports. In the foreseeable future, China will still rely on imports to meet its demand for large diameter logs. Identification of timber supply sources has become increasingly important. Therefore, measures for identification of timber sources need to be developed. In this respect, some recommendations will be made in the final report of the project, which will be provided to policy makers.

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Part II The Project 1. Project Objectives 1.1 Development objective The development objective of the project is to improve the supply of tropical wood products from sustainably managed forests to Chinese market and promote sustainable development of global wood products trade 1.2 Specific objective The specific objective of the project is to analyze the timber situation in China by 2020 with focus on tropical timber to increase market transparency in China 2. Justification 2.1 Problems to be addressed With the rapid development of economy and urbanization, China’s demand for wood products is increasing dramatically and its potential is great in future. Meanwhile, along with the progress of integrative global economy, especially China’s joining in the WTO, Chinese wood products market has become an important part of international wood products market. In recent years, more and more international wood products manufactures moved into China, forest industry developed rapidly in China. It is a fact that China has become the international center of manufacture, consumption and trade of wood products in the world. Driven by both domestic consumption and export demand, the demand for timber (especially log and sawnwood) increased sharply. Up to now, China is the largest log import country in the world. In 2006, the country’s log imports reached 32.15 million cubic meters, compared with 10.56 million cubic meters in 1998 when the NFPP began to practice, the increase were as high as 204.5%. Owing to continuously shortage of the domestic timber especially tropical large-diameter hardwood, as well as increasing timber demand from furniture and decoration industries, the demand for timber especially tropical hardwood will increase steadily. In view of the important role that China plays in the global forest product trades, it is necessary to forecast the supply and demand of Chinese tropical wood products market. The outputs of this project will not only provide scientific bases for government’s policy making to facilitate the relative balance between demand and supply of tropical wood products, but also help to promote the orderly flow of tropical wood products in China and increase the market transparency. All these will contribute to the sustainable development of global tropical wood products market. However, reliable and consistent data and information are not available on the future demand and supply of tropical wood products market. Most of the existing forecasting studies on wood demand and supply only touch upon the wood products demand through domestic consumption, some driving factors such as demand for export have not been taken into account. In addition, during preparing the proposal, we consulted different stakeholders to solicit their contributions, including Forest Products Statistic Division of State Forestry Administration, Customs, National Timber Distribution Association, National Forest Industry Association, and some enterprises such as Krono (Beijing) Wood Based Panel/Flooring Co. Ltd. We found there were different data and information from different stakeholders on the forest products market because of different definitions of the same terms, repeated calculation etc. At the same time, lack of coordination and information sharing among the key sectors (such as Ministry of Commerce, State Forestry Administration, customs, industry associations and manufacturers and traders) has also affected the reliability, consistency and integrality of the data and information on forest products market. Furthermore, some stakeholders such as producers, traders and exporters usually make wrong decisions because of having no idea on demand and supply of tropical wood products. For example, in Zhangjiagang Port, the largest distributing center of tropical timber in China, tropical timber (mainly from Africa) was imported blindly by some traders because of wrong prediction of domestic demand from the latter half of 2006 to the early half of 2007, not only resulting in overstock of tropical timber, but also depreciating the price of tropical timber in domestic market, e. g. the price of OUKUME was reduced to 2 000 yuan/m3 from 4 000 yuan/m3. These traders suffered from expenses.

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All these have a negative impact on achieving the balance between demand and supply of tropical wood products, in other words, obstructing the sustainable development of tropical wood products market. Because of the huge demands for wood products China has to import timber from abroad to meet domestic demand. Many countries with rich forest resources and multinational corporations are eager to access Chinese market. These countries and corporations need to understand the Chinese timber market situation and demand potential in future so as to be able to develop sound marketing strategies. In general, lack of reliable and consistent data and information on the future demand and supply of tropical wood products market was resulted mainly from the following factors: Lack of reliable and consistent data and information on production of tropical wood products in China.

In recent years, owing to rapid development of forest industry in China, more and more private enterprises engaged in wood products manufacture. The production capacity and technology level also have been increasingly improved. However, there isn’t systematical and reliable data and information regarding end use of tropical timber and tropical timber processing enterprises including their ownership, production capacity and so on. At the same time, less scientific and comprehensive analysis on current situation and trends of forest industry policies has been found in China. All these have a negative impact on scientific and correct prediction of future domestic supply of tropical wood products.

Lack of reliable and consistent data and information on consumption of tropical wood products in China. The end use of tropical wood products focuses on three fields: decoration, flooring and furniture. In recent years, arising from rapid growth of national economy and urbanization and blooming real estate, particularly from the increasing people’s living standard, people’s consumption preference for indoor decoration, flooring and furniture is changing. However, there is little understanding of customers’ preference and future demand for tropical wood products in China, which will influence correct prediction of domestic demand for tropical wood products in future.

Lack of systematical analysis on trade conflicts and trade policy trends. Due to the rapid development of export trade of wood products in China, wood products exports increased sharply. At the same time, the conflicts and disputes of trade often occur between China and some consumer countries of tropical wood products, which will certainly affect China’s exports of wood products. In the face of the trade conflicts, it is necessary to make investigations on this issue and help government to develop relevant policies and regulations to deal with the problem.

Framework for consultation among stakeholders has not been established, The main stakeholders of this project are as follows: Government authorities, including State Forestry Administration, Ministry of Commerce and

Customs etc., will mainly participate in activity 1.1.2, 1.1.4, 1.2.4, 1.4.2 and 1.5.3. Related associations, including National Forest Industry Association, National Timber Distribution

Association etc., will mainly participate in activity 1.1.4, 1.2.1, 1.2.3, 1.3.1, 1.4.2, 1.5.3 and 1.6.1. Tropical wood products enterprises, including domestic enterprises and foreign companies in

joint-venture or independent venture, will mainly participate in activity 1.1.4, 1.2.3 and 1.5.3. Tropical wood products traders, including domestic traders and some multinational corporations

who are eager to access Chinese market, will mainly participate in activity 1.1.4, 1.4.2 and 1.5.3. Large domestic forest products markets which play an important role in tropical wood products

distribution, will mainly participate in activity 1.3.1, 1.3.2, 1.5.3 and 1.6.1. End consumers of tropical wood products will mainly participate in activity 1.3.2. In addition, through implementing projects ITTO PD 25/96 Rev 2(M) and PD 55/99 Rev.1 (M), the Tropical Forest Product Information and Consultation Center of China has been established in the Institute of Forestry Policy and Information under Chinese Academy of Forestry. A monthly newsletter, in both Chinese and English versions, entitled “China Forest Products Market Information” is published, up to now 72 issues has been published. The newsletter reports relevant information on Chinese wood products market timely. It is necessary to continue to publish it to ensure effective communication and information exchange among stakeholders above-mentioned, especially to establish close relationship with forest industry associations and typical enterprises to keep abreast of new development on production and demands of forest products.

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Lack of reliable and consistent data and information to forecast

demand and supply of tropical wood products

Lack of reliable data

and information on

consumption of tropical

wood products and little

understanding of

consumers’ preference

Lack of reliable data

and information on

production and supply

capacity of tropical

wood products

Lack of systematical

analysis on current

status and

development trends of

trade policy and trade

conflicts of tropical

wood products

No consultation or

information sharing

on tropical wood

products market

among stakeholders

Imbalance of demand and supply of tropical wood products in China which has a negative

impact on sustainable development of international trade

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2.2 Intended situation after project completion The project is to be completed in 2 years. After project completion, through publishing research reports and various kinds of materials, expanding the exchange network of international forest product information, it will be greatly enhanced for stakeholders to understand the production, demand and trade situation of Chinese tropical wood products market and development trends in 2020. This will create better conditions for achieving the balance between supply and demand and sustainable cooperation between China and producing and consuming countries of tropical timber. 2.2.1 After project completion, a research report entitled Demand and Supply of Tropical Wood Products in China Towards 2020 will be put forward, its content will not only touch upon the analysis of factors influencing tropical wood products supply and demand in China, but also forecasting supply and demand trend in 2020 through data analysis and forecasting model, providing feasible scenarios and suggestions on how to satisfy future market demands and realize balance between supply and demand, thereby making Chinese and foreign competent authorities, relevant industrial societies and enterprises undertaking tropical forest product operation to have sufficient understanding of supply and demand of China’s tropical forest product markets, thus they could have a basis to follow when they implement macro management, formulate policies and make decisions. 2.2.2 After project completion, the reference materials to be written and published include Report of Productive Capacity of Chinese Major Tropical Wood Product Processing Enterprises and the End Uses of the Imported Tropical Logs, Investigation Report of A Survey on Consumer’s Demand/Preference to Major Tropical Wood products in China, and Analysis Report of Conflict Issues in China’s Export Trading of Tropical Wood Products. These materials will help domestic tropical forest product producers and traders choose cooperative partners and make feasible marketing strategies. 2.2.3 The capacity of the ITTO supported Tropical Forest Product Information and Consultation Center of China will be further enhanced, its resource and information base will be expanded, its links with the wood products sector in China and in producer countries will be enhanced as well its links with the Chinese media. Producers and traders at home and abroad will timely understand the market situation of tropical wood products through the newsletter “Chinese Wood products Market Information”. 2.3 Project strategy In order to promote the development of international tropical forest product markets and satisfy domestic market demand for tropical wood products the project will pay equal attention to the demand of China and supply countries. In other words, it will study not only demand, supply and production within the Chinese tropical forest product markets but also the position of China's demand and imports within the global tropical forest product markets. It will provide information to China’s domestic enterprises undertaking tropical wood products trade, operation, manufacturing and processing. This will be done through publishing periodical newsletter. In order to acquire sufficient materials related to supply and demand of domestic market, the project team will closely collaborate with relevant industrial associations (such as China National Wood products Industry Association, China National Wood products Trading Association, Chinese Association of Timber Circulation, Chinese Association of Architecture Decoration, Chinese Association of Furniture and Chinese Association of Paper-Making) and General Administration of Customs (GAC, the major source of import and export statistical data). In addition, contacts and cooperation will be established with the agencies of major producer and exporting countries set-up in China (including embassies and trade promotion agencies) and with the industrial associations in China and overseas. In order to improve the forecasting accuracy, qualitative and quantitative methods will be applied in the project, and forecasting model will be set up to ensure the objective, accurate results of supply and demand in 2020. In all activities of the project, participatory method will be adopted and consultative mechanism will be carried out with stakeholders. It is necessary to ensure outputs more practical, objective and feasible.

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2.4 Target beneficiaries 2.4.1 The project’s direct beneficiaries will include the following departments and units: China’s policy making forestry and international authorities Domestic companies, enterprises and trading markets engaging in tropical forest product trade and

operation; Domestic companies and enterprises engaging in tropical forest product production and processing; International companies and enterprises engaging in tropical forest product trade with China; and International companies and enterprises engaging in tropical forest product production and processing. 2.4.2 The project’s indirect beneficiaries will include the following: Domestic organizations of government and industry in charge of forest product production, trade, supply

and circulation; Consumers of tropical wood products; Domestic research and teaching institutions; Government agencies and industrial and trade organizations in China (eg. representative office) for ITTO

member countries who engage in the trade of wood products with China; and Relevant international organizations such as ITTO, FAO, UNECE, WWF and WB. 2.5 Technical and scientific aspects In consideration of the latest changes and development trends of domestic economy and society, the project will forecast demand and supply of tropical wood products towards 2020 in the context of that China plays more and more important role in global forest products trade. This project focuses on production, consumption and trade of tropical wood products so as to explore various change drivers and their likely impacts on long-term demand and supply of tropical wood products in China. All these will contribute to produce objective and correct data on demand and supply of tropical wood products in China. Cooperation among relevant parties involved in the project is very important. It would be impossible to make an objective and correct forecast of demand and supply of tropical wood products without their active participation, especially the key stakeholders including government statistics departments, customs and private sectors (such as producers, traders and consumers), their full participation will not only ensure the successful implementation of the project, but also ensure the verification and reliability of data. On the other hand, full participation of key stakeholders in project implementation will promote the findings made by the project to be adopted by government agencies as soon as possible. Both qualitative analysis and quantitative calculation will be used in this project to forecast development trends of tropical wood products market. Qualitative analysis focuses on exploring driving factors such as the increasing investment in capital asserts, rapid urbanization, blooming real estate and construction industry, rapid development of furniture and flooring manufactures, increasing consumption demand of people, dynamic changes on trade conflicts of forest products, which may affect demand and supply of tropical wood products, Quantitative calculation will identify volumes of consumption, demand and supply of tropical wood products by means of statistical analysis software such as SPSS, SAS and BMDP, and forecasting model such as IFFP （International Forest and Forest Products）model developed by Mr. Gary Bull of UBC in Canada; the forecasting model of wood supply developed by Forest Economy and Development Research Center of SFA (State Forestry Administration), which had been tested in Heilongjiang Province of China. Qualitative analysis and quantitative calculation will complement and verify each other so as to improve the reliability of forecast. In addition, the project will provide information relevant to China and global tropical forest product markets and introduce internationally concerned hot spot issues through publishing research report and relevant materials (including the newsletter ”Chinese Wood products Market Information”), with the purpose of helping ITTO member countries to make feasible marketing strategies, achieving orderly distribution of tropical wood products, hence creating conditions for sustainable development of international trade of topical wood products.

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2.6 Economic aspects The project will be of benefit to forestry authorities by means of providing reliable information and data for formulating policies and working out plans so as to achieve sustainable development of forest industry and alleviate trade conflicts. This will contribute to increase revenue of forest sectors and ultimately promote economic development on national and regional levels. In addition, information exchange among key stakeholders, including publishing reports and newsletter will not only greatly reduce producers’ and traders’ economic loss caused by lack of forecasting supply and demand of international and domestic market, but also promote communications between China and producer and consumer countries of tropical wood products. The project will be helpful to those producer countries who are going to enter into Chinese market to make feasible marketing strategies so as to acquire economic benefits in early time; the project will also benefit consumer countries who will import forest products from China, the outputs of the project will help them to understand production and trade policy of wood products in China so as to make economically optimal purchasing strategy. At the same time, the project’s implementation will also be beneficial for close economic cooperation between China and producers and traders of tropical wood products at home and abroad. 2.7 Environmental aspect The project implementation has the advantage of boosting China’s timber operators and consumers’ consciousness of environmental protection, of implementing and practicing sustainable forest management and establishing forest product certification systems in a bit to consciously reject the entering into domestic markets of counterfeit and shoddy products and illegal timber. As one of the important tropical wood products import and consumer countries in the world, China’s efforts will contribute to conservation of global tropical forest resources and implementation of sustainable forest management, as well as improvement of global environment. The implementation of the project will also strengthen close communications between governmental agencies and private sectors, which will raise the environmental responsibility of private sectors, and therefore to promote responsible purchasing, processing and trade of forest products in China. All these will be of great help to sustainable forest management and environment protection, and even contribute to combating climate change, 2.8 Social aspect China has become the manufacture center of wood products in the world with rapid development of forest industry in recent years. Wood product industry not only plays an important role in local economic growth, but also is a vital source of employment and provides new business opportunities for local people, especially in mountain areas. By means of providing references to forestry authorities for making policies on forest industry, the project will contribute to sustainable development of wood product industry in China, and therefore help create steady employment and business opportunities for local people and improve their welfare in general. Activities to promote the trade, processing and consumption of tropical wood products will have a beneficial social impact in the producer countries as well as in China. The expanded trade in wood products from sustainably managed sources will further strengthen sustainable tropical forest management and regulate production and trade of tropical wood products. It will also create employment opportunities in the producer countries. In addition, the establishment of consultation platform for stakeholders provides possible chance for private sectors to participate in decision making process of developing forest industry plan, and therefore raise private sectors’ social responsibility, which will be great helpful to ensure that the multi-stakeholders’ views could be reflected in related policies. 2.9 Risk This project will involve collaboration with many domestic and international institutions and there are risks of failed or delayed cooperation. Fortunately for almost all aspects of the data and information collection there is more than one possible source so the risk of delay or failed collaboration can be mitigated. For the sake of timely accomplishment of the planned objectives the project will require collaboration from domestic departments such as industrial associations, major forest product producing enterprises and trade companies as well as major forest product markets and trade ports. The project will also need the support of Chinese

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government organs (such as the Ministry of Commerce) and its commercial institutions abroad, the SFA, GAC and National Bureau of Statistics in order to collect materials. The risks of failure in this respect can be mitigated as the CAF through previous projects in this field have established good working relationships with relevant bodies. 3. Outputs Specific objective The specific objective of the project is to analyze the timber situation in China by 2020 with focus on tropical timber to increase market transparency in China Output 1.1 Research report – Outlook on demand and supply situation of tropical wood products

in China in 2020 The report will analyze in detail the China’s demand for tropical wood products both for domestic use and export as well as the factors affecting demands. Through both qualitative analysis and quantitative calculation objectively and establishment of predicting pattern the predicting values of supply and demand for tropical wood products will be identified. The report will also include suggestions to meet market demands and realize the balance between supply and demand to ensure the sustainable supply of tropical wood in China. Output 1.2 Analysis report - Productive capacity of Chinese tropical wood processing enterprises

and the end uses of the imported tropical logs Output 1.3 Investigation report - A survey on consumers’ preference on tropical wood products in

China Output 1.4 Analysis report: - Conflict issues and policy trends on China’s trading of tropical wood

products Output 1.5 Holding an international workshop – “Perspective on Global Tropical Wood Products

Market: Potential and Challenge” and publishing proceedings The objective of this workshop is to increase the market transparency and promote the sustainable development of the global wood market. Output 1.6 Publishing the China’s Forest Products Market Information in both Chinese and

English Having been published 72 issues during implementation of the previous ITTO projects this newsletter has attracted a broad of readers throughout the world. It helps foreign readers to understand the dynamic situation of Chinese timber market. 4. Activities 4.1 Output 1.1 Research report - Outlook on demand and supply situation of tropical wood

products in China in 2020 Activity 1.1.1 Conduct 15 domestic investigations in South China (mainly Pear River Delta, 4),

East China (Yangtze River Delta, such as Shanghai City, Zhejiang, Jiangsu and Shandong provinces, 4), Southwest China (Yunnan and Sichuan provinces, 3), North China (Beijing, Tianjin and Hebei, 2) and Northeast China (Liaoning Province, 2) to collect information on timber resources, production and consumption.

Activity 1.1.2 Collect, collate and copy relevant materials Activity 1.1.3 Compile and translate research report Activity 1.1.4 Publish and disseminate research report Activity 1.1.5 Attend international forums

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4.2 Output 1.2 Analysis report - Productive capacity of Chinese tropical wood processing

enterprises and the end uses of the imported tropical logs Activity 1.2.1 Collect materials Activity 1.2.2 Conduct 8 domestic investigations to typical wood processing enterprises in

Guangdong, Jiangsu, Zhejiang, Shandong, Hebei and Liaoning provinces to collect information on the use of imported tropical forest products.

Activity 1.2.3 Hold a seminar to share information among enterprises Activity 1.2.4 Analyze data collected and verify these data with related stakeholders Activity 1.2.5 Write report and translate it into English Activity 1.2.6 Print and disseminate the report 4.3 Output 1.3 Investigation report: - A survey on consumers’ preference on tropical wood

products in China Activity 1.3.1 Collect, copy and collate existing materials, work out questionnaire and distribute it and

get feedback Activity 1.3.2 Carry out 7 domestic investigations in main consumption areas of tropical wood

products, such as Guangzhou, Shenzhen, Shanghai, Nanjing, Beijing and Tianjin to collect information and make market surveys.

Activity 1.3.3 Write and translate the report Activity 1.3.4 Print and disseminate the report 4.4 Output 1.4 Analysis report - Conflict issues and policy trends on China’s trading of tropical

wood products Activity 1.4.1 Collect, copy and collate existing materials Activity 1.4.2 Visit to and consult with stakeholders of governmental departments, industry

associations, production enterprises and traders, etc. as well as representative offices of foreign organizations in China

Activity 1.4.3 Write and translate report Activity 1.4.4 Print and disseminate research report 4.5 Output 1.5 Holding an international workshop – “Perspective on Global Tropical Wood

Products Market: Potential and Challenge” and publishing proceedings The workshop will be attended by about 30 participants, of which 15 from China, 15 from other ITTO member countries, international organizations and NGOs. Among the 15 participants from abroad, 6 people will come from the producing countries who’s expenses will be covered by the project. After the workshop a proceeding will be compiled and disseminated through the website (www.lknet.ac.cn), the hardcopy will be displayed and distributed at the next session of ITTO council. Activity 1.5.1 Set up an organizing group to draw plan Activity 1.5.2 Invite 6 participants from tropical timber producing countries Activity 1.5.3 Invite 15 Chinese participants Activity 1.5.4 Hold a workshop including meeting room renting, meals and hospitalities Activity 1.5.5 Publish and disseminate workshop proceedings 4.6 Output 1.6 Publishing the China’s Forest Products Market Information in both Chinese and

English Activity 1.6.1 Collect materials and solicit contributions Activity 1.6.2 Engage 12 specially invited correspondents Activity 1.6.3 Editing and translation Activity 1.6.4 Printing, publishing and disseminating

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5. Logical Framework Worksheets

PROJECT ELEMENTS INDICATOR MEANS OF VERRIFICATION ASSUMPTIONS

to improve the supply of tropical wood products from

sustainably managed forests to Chinese market and

promote sustainable development of global wood

products trade

Proportion of certified wood products in the

market increased

Supply and demand of wood products tend to be

balanced

Trading conflicts reduced

Related documents issued by

governmental departments

Field visit

Stable politic and economic

situation

Increasing demands for topical

wood products

Stable development of wood

products trade

Good cooperation among

stakeholders

to analyze the timber situation in China by 2020 with

focus on tropical timber to increase market

transparency in China

Forecast data on situation of demand and supply of

China’s tropical wood products by 2020 put forward

and recognized by key stakeholders

Consultation framework among stakeholders

established

Stakeholders survey

Field visit

Review research reports

Supports of SFA , GAC and major

markets and ports

Good cooperation among

stakeholders

Output 1.1 Research report – Outlook on demand and supply

situation of tropical wood products in China in 2020

Pattern of predicting market demand and supply of

tropical wood products developed

Predicting value on market demand and supply in

2020 identified

Recommendations for improving supply and

demand for tropical wood products put forward

Review the research report

Minute of consultation

meeting

Evaluation by ITTO

Close cooperation among

stakeholders (government

agencies, associations and private

sectors)

Good information exchange

Output 1.2 Analysis report: Productive capacity of Chinese

tropical wood processing enterprises and the end uses of the

imported tropical logs

Case study analysis of 10 major tropical wood

products processing and trading enterprises

Field visit

Review related records and

documents

Enterprises’ supports and

associations’ coordination

Output 1.3 Investigation report: A survey on consumers’

preference on tropical wood products in China

Survey conducted in 15 large and medium scale

cities

Consumer questionnaire

Related interview records

Associations’ support and

consumers’ cooperation

Output 1.4 Analysis report: Conflict issues and policy trends

on China’s trading of tropical wood Product

Case study analysis of typical furniture and

plywood enterprises, traders and ports

Recommendations for reducing trading conflicts put

forward

Field visit

Related interview records

Governments and associations’

supports

Producing enterprises, traders and

ports’ cooperation

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PROJECT ELEMENTS INDICATOR MEANS OF VERRIFICATION ASSUMPTIONS

Output 1.5 Holding an international workshop – “Perspective

on Global Tropical Wood Products Market: Potential and

Challenge” and publishing proceedings

30 participants, 15 from China, 15 from other ITTO

member countries, international organizations and

NGOs. Publish workshop proceedings

List of participants

Minute of meeting

Review proceedings

Relevant research institutions,

governing bodies and enterprises’

support and cooperation

Output 1.6 Publishing the China’s Forest Products Market

Information in both Chinese and English Provide timely and accurate market information

Readers’ evaluation

Review newsletters

Support from 12 specially invited

correspondents and stakeholders

Chinese and foreign readers’

interests

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6. Work Plan

Output and Activity Responsible

party

Plan（Month）

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Output 1.1 Research report –

Outlook on demand and supply

situation of tropical wood products

in China in 2020

Project team

Activity 1.1.1 Domestic investigations

Activity 1.1.2 Collect, collate and

copy relevant materials.

Activity 1.1.3 Compile and translate

research report

Activity 1.1.4 Publish and

disseminate research report

Activity 1.1.5 Attend international

forums.

Output 1.2 Analysis report:

Productive capacity of Chinese

tropical wood processing

enterprises and the end uses of the

imported tropical logs

Activity 1.2.1 Collect materials

Activity1.2.2 Domestic investigations

Activity 1.2.3 Hold a seminar

Activity 1.2.4 Analyze and verify data

collected

Activity 1.2.5 Write report and

translate it into English Project team

Activity 1.2.6 Print and disseminate

the report

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party

Plan（Month）

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Output 1.3 Investigation report: A

survey on consumers’ preference

on tropical wood products in China

Project team and

relevant

institutions

Activity 1.3.1 Collect, copy and

collate existing materials

Activity 1.3.2 Carry out domestic

investigations

Activity 1.3.3 Write and translate the

report


the report

Output 1.4 Analysis report:

conflict issues and policy trends

on China’s trading of tropical wood

products

Project team and

relevant

institutions

Activity 1.4.1 Collect, copy and

collate existing materials

Activity 1.4.2 Visit to and consult with

stakeholders

Activity 1.4.3 Write and translate

report


report

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party

Plan（Month）

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Output1.5 Holding an international

workshop – “Perspective on Global

Tropical Wood Products Market:

Potential and Challenge” and

publishing proceedings

Project team and

relevant

institutions

Activity 1.5.1 Set up an organizing

group to draw plan.

Activity 1.5.2 Invite 6 participants

from tropical timber producing

countries.

Activity1.5.3 Invite 15 Chinese

participants

Activity 1.5.4 hold a workshop

including meeting room renting, meals

and hospitalities

Activity1.5.5 Publish proceedings

Output 1.6 Publishing the China’s

Forest Products Market Information

in both Chinese and English

Project team and

correspondents

Activity 1.6.1 Collect materials and

solicit contributions

Activity 1.6.2 Engage

correspondents

Activity1.6.3 Editing and translation

Activity 1.6.4 Printing, publishing and

disseminating

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7. Budget 7.1 A Overall budget by activity (breakdown) US$

Outputs & Activities Inputs

Unit costs Y/Q Budget

Component

Total

Amount Units and Quality No. or days

Output 1.1 Research report- Demand and supply of tropical wood products

in China

Activity 1.1.1 Domestic investigation Travel 15 men 400 1/1-2/1 32 6 000

Accommodation 150 days 80 1/1-2/1 31 12 000

Transportation 1/1-2/1 32 1 200

Activity 1.1.2 Collect, collate and copy relevant materials 1/1-2/1 51 1 000

Activity 1.1.3 Compile and translate research report Compile 50 pages 30 2/2 21 1 500

Translation 50 pages 50 2/3 21 2 500

Activity 1.1.4 Publish and disseminate research report Printing 800 copies 10 2/4 22 8 000

Dissemination 800 copies 2.5 2/4 22 2 000

Activity 1.1 5 Attend international forums International travels 4 men 3 000 2/4 32 12 000

Accommodation 28 days 200 2/4 31 5 600

Subtotal 1 51 800

Output 1.2 Analysis report: Productive capacity of Chinese tropical wood

processing enterprises and the end use of the imported tropical

logs

Activity 1.2.1 Collect materials 1/1 54 1 000

Activity 1.2.2 Domestic investigations Travels 8 men 400 1/2-3 32 3 200

Accommodation 80 days 80 1/2-3 31 6 400

Transportation 1/2-3 31 800

Activity 1.2.3 Hold a seminar Travels 12 men 400 1/4 65 4 800


Transportation 1/4 65 1 920

Activity 1.2.4 Analyze and verify data collected 1/4-2/1 51 700

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Component

Total


Activity 1.2.5 Write and translate report Writing 50 pages 30 2/1 21 1 500


Activity 1.2.6 Print and disseminate the report Printing 320 copies 10 2/3 22 3 200

Dissemination 320 copies 2.5 2/4 22 800

Subtotal 2 28 740

Output 1.3 Investigation report: A survey on consumers’ preference on

tropical forest products in China

Activity 1.3 1 Collect, collate and copy relevant materials 1/3 54 1 000

Activity 1.3.2 Domestic investigations Travels 7 men 400 1/4 31 2 800


Transportation 1/4 31 1 000




Dissemination 400 copies 2.5 2/4 22 1 000

Subtotal 3 18 400

Output 1.4 Analysis report: Conflict issues and policy trends on China’s

trading of tropical wood products

Activity 1.4.1 Collect, collate and copy existing materials 1/2-4 51 1 000

Activity 1.4.2 Visit to and consult with stakeholders 10 men 200 1/3-4 60 2 000




Dissemination 240 copies 2.5 2/4 22 600

Subtotal 4 9 000

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Component

Total


Output 1.5 Holding an international workshop and publishing proceedings

Activity 1.5.1 Set up an organizing group to draw plan 2/1 65 2 000

Activity 1.5.2 Invite 6 participants from tropical timber producing countries International travels 6 men 2 800 2/2 64 16 800


Activity 1.5.3 Invite 15 Chinese participants Domestic travels 15 men 400 2/2 64 6 000


Activity 1.5.4 Hold the workshop including meeting room renting, meals and

hospitality Meeting room renting 3 days 800 2/2 65 2 400

Interpretation 9 men 1 000 2/2 65 9 000

Meals 4 x 40 10 2/2 65 1 600

Field visit 40 men 35 2/2 65 1 400

Hospitality 2/2 65 900

Activity 1.5.5 Publish proceedings Compile and

translation 120 pages 40 2/3 64 4 800

Printing and

dissemination 600 copies 6 2/3-4 64 3 600

Purchase a digital

camera and 1 3 000 2/2 44 3 000

a projector 1 3 000 2/2 44 3 000

Subtotal 5 65 600

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Component

Total


Output 1.6 Publishing the China’s Forest Products Market Information in

both Chinese and English

Activity 1.6.1 Collect materials and solicit contributions

Activity 1.6.2 Engage 12 specially invited correspondents 12

correspondents 24 months 150 1/1-2/4 13 43 200

Activity 1.6.3 Editing and translation

Activity 1.6.4 Printing and dissemination

Subtotal 6 43 200

Non-Activity Based Expenses

International consultant Consultant fee 1 month 10 000 2/1 13 10 000

International travels 1 2 810 2/1 34 2 810


Domestic

transportation 2/1 34 2 260

Subtotal 7 20 260

TOTAL 237 000

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7.1 B Budget by Activity ITTO Contribution（US$）

BUDGET COMPONENTS

10

Project Personnel

20

Sub-Contracts

30

Duty Travel

40

Capital Items

50

Consumable Items

60

Miscellaneous

Grand Total

Output 1.1 Research report – Outlook on demand and supply situation of tropical wood products in China in 2020

Activity 1.1.1 Domestic investigations 19 200 19 200

Activity 1.1.2 Collect, collate and copy relevant materials 1 000 1 000

Activity 1.1.3 Compile and translate research report 4 000 4 000

Activity 1.1.4 Publish and disseminate research report 10 000 10 000

Activity 1.1.5 Attend international forums 17 600 17 600

Subtotal 1 14 000 36 800 1 000 51 800

Output 1.2 Analysis report: Productive capacity of Chinese tropical wood processing enterprises and the end uses of the imported tropical logs

Activity 1.2.1 Collect materials 1 000 1 000

Activity1.2.2 Domestic investigations 10 400 10 400

Activity 1.2.3 Hold a seminar 8 640 8 640

Activity 1.2.4 Analyze and verify data collected 700 700

Activity 1.2.5 Write report and translate it into English 4 000 4 000

Activity 1.2.6 Print and disseminate the report 4 000 4 000

Subtotal 2 8 000 10 400 1 700 8 640 28 740

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BUDGET COMPONENTS

10

Project Personnel

20

Sub-Contracts

30

Duty Travel

40

Capital Items

50

Consumable Items

60

Miscellaneous

Grand Total

Output 1.3 Investigation report: A survey on consumers’ preference on tropical wood products in China

Activity 1.3.1 Collect, copy and collate existing materials 1 000 1 000

Activity 1.3.2 Carry out 7 domestic investigations 9 400 9 400

Activity 1.3.3 Write and translate the report 3 000 3 000

Activity 1.3.4 Print and disseminate the report 5 000 5 000

Subtotal 3 8 000 9 400 1 000 18 400

Output 1.4 Analysis report: Conflict issues and policy trends on China’s trading of tropical wood products


Activity 1.4.2 Visit to and consult with stakeholders 2 000 2 000

Activity 1.4.3 Write and translate report 3 000 3 000

Activity 1.4.4 Print and disseminate report 3 000 3 000

Subtotal 4 6 000 1 000 2 000 9 000


Activity 1.5.1 Set up an organizing group to draw plan 2 000 2 000

Activity 1.5.2 Invite 6 participants from tropical timber producing countries

20 400 20 400

Activity 1.5.3 Invite 15 Chinese participants 13 500 13 500

Activity1.5.4 Hold a workshop including meeting room renting , meals, etc.

15 300 15 300

Activity1.5.5 Publish proceedings 6 000 8 400 14 400

Subtotal 5 6 000 59 600 65 600

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BUDGET COMPONENTS

10

Project Personnel

20

Sub-Contracts

30

Duty Travel

40

Capital Items

50

Consumable Items

60

Miscellaneous

Grand Total

Output 1.6 Publishing the China’s Forest Products Market Information in both Chinese and English

Activity 1.6.1 Collect materials and solicit contributions

Activity 1.6.2 Engage 12 specially invited correspondents 43 200 43 200

Activity1.6.3 Editing and translation

Activity1.6.4 Printing, publishing and disseminating

Subtotal 6 43 200 43 200


International Consultant 10 000 10 260 20 260

Subtotal 7 10 000 10 260 20 260

Total 53 200 36 000 66 860 6 000 4 700 70 240 237 000

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7.1 C Budget by Activity China Contribution（US$）

BUDGET COMPONENTS

10

Project Personnel

20

Sub-Contracts

30

Duty Travel

40

Capital Items

50

Consumable Items

60

Miscellaneous

Grand Total

Output 1.1 Research report – Outlook on demand and supply situation of tropical wood products in China in 2020

Activity 1.1.1 Domestic investigations 7 800 7 800

Activity 1.1.2 Collect, collate and copy relevant materials 2 000 500 2 500

Activity 1.1.3 Compile and translate research report 4 000 4 000

Activity 1.1.4 Publish and disseminate research report in Chinese and English versions

Activity 1.1.5 Attend international forums

Subtotal 1 13 800 500 14 300

Output 1.2 Analysis report: Productive capacity of Chinese tropical wood processing enterprises and the end uses of the imported tropical logs

Activity 1.2.1 Collect materials 2 000 800 2 800

Activity1.2.2 Domestic investigations 4 000 4 000

Activity 1.2.3 Hold a seminar

Activity 1.2.4 Analyze and verify data collected 1 000 1 000

Activity 1.2.5 Write report and translate it into English 2 000 2 000

Activity 1.2.6 Print and disseminate the report

Subtotal 2 8 000 1 800 9 800

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BUDGET COMPONENTS

10

Project Personnel

20

Sub-Contracts

30

Duty Travel

40

Capital Items

50

Consumable Items

60

Miscellaneous

Grand Total

Output 1.3 Investigation report: A survey on consumers’ demand/preference on tropical wood products in China


Activity 1.3.2 Carry out 7 domestic investigations 3 000 500 3 500

Activity 1.3.3 Write and translate the report 2 000 700 2 700

Activity 1.3.4 Publish and disseminate the report

Subtotal 3 6 000 1 200 7 200

Output 1.4 Analysis report: Conflict issues and policy trends on China’s trading of tropical wood products

Activity 1.4.1 Collect, copy and collate existing materials 680 500 820 2 000

Activity 1.4.2 Visit to and consult with stakeholders 1 000 1 000

Activity 1.4.3 Write and translate report. 2 000 500 2 500

Activity1.4.4 Print and disseminate report 3 000 3 000

Subtotal 4 6 680 1 000 820 8 500

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BUDGET COMPONENTS

10

Project Personnel

20

Sub-Contracts

30

Duty Travel

40

Capital Items

50

Consumable Items

60

Miscellaneous

Grand Total


Activity 1.5.1 Set up an organizing group to draw plan 2 000 2 000

Activity 1.5.2 Invite 6 participants from tropical timber producing countries.

Activity 1.5.3 Invite 15 Chinese participants 1 000 1 000

Activity1.5.4 Hold a workshop including meeting room renting, meals, etc.

Activity1.5.5 Publish proceedings 2 000 2 000

Subtotal 5 3 000 2 000 5 000

Output 1.6 Publishing the China’s Forest Products Market Information in both Chinese and English

Activity 1.6.1 Collect materials and solicit contributions 1 000 1 000

Activity 1.6.2 Engage 12 specially invited correspondents 14 320 14 320

Activity1.6.3 Editing and translation 500 10 000 10 500

Activity 1.6.4 Printing, publishing and disseminating 2 000 19 200 500 21 700

Subtotal 6 16 320 19 200 1 500 10 000 500 47 520


Auditing 5 000 5 000

Subtotal 7 5 000 5 000

Total 53 800 19 200 6 000 10 000 1 320 7 000 97 320

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7.2 A Yearly Project Budget By Source—ITTO (US$)

Total Year 1 Year 2

10. Project personnel

including Int. consultant (20 000) 53 200 30 200 23 000

20. Sub-contracts 36 000 18 000 18 000

30. Duty travel including Intl. consultant (17 500)

66 860 33 430 33 430

40. Capital items 6 000 6 000

50. Consumable items 4 700 3 000 1 700

60. Miscellaneous 70 240 10 640 59 600

Subtotal 1 237 000 101 270 135 730

80. ITTO Monitor, evaluate and administer costs

81. Monitoring and review costs (effective estimation)

82. Evaluation Costs (effective estimation)

7 000

Subtotal 2 244 000

83. Programmer support costs (8% of subtotal2)

19 520

90. Refund of pre-project Costs

ITTO TOTAL 263 520

7.2 B Yearly Project Budget By Source—E. Agency/Host Government

Total Year 1 Year 2

10. Project personnel 53 800 26 900 26 900

20. Sub-contracts 19 200 11 000 8 200

30. Duty travel 6 000 3 000 3 000

40. Capital items 10 000 5 000 5 000

50. Consumable items 1 320 700 620

60. Miscellaneous (Auditing) 7 000 3 500 3 500

Subtotal 2 97 320 50 100 47 220

70. Executing agency management costs (15% of total of overall project budget by activity)

50 148

EXECUTING AGENCY /

HOST GOVT. TOTAL 147 468

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PART III OPERATIONAL ARRANGEMENTS 1. Management Structure Under the guidance of MOC and SFA, the project will be implemented by the Research Institute of Forestry Policy and Information/Chinese Academy of Forestry (RIFPI). The institute is responsible for the research of policy, development plan and information in the national forestry system, it is also a unit engaging in the research of international forestry, and is a key institution to provide information and consulting services to domestic and foreign relevant organs as well as companies and enterprises. Over the years, domestic and world forest product industry development and its market variations is all the time one of the institute’s key research projects. The key members of the project has participated in the formulation of the state forestry medium and long-term development plans (including Eighth Five-year, Ninth Five-year and Tenth Five-year forestry plans and 2001-2010 forestry plan as well as the formulation of major forestry policies (including industrial policy and science and technology one). In addition, the project’s key members has collaborated with ITTO, FAO and other international organizations a number of time, and has well accomplished their assignments. 2. Monitoring, Reporting and Evaluation 1.1 After the start-up of the project, in compliance with the demand, the project group will report every

6 months the progress to ITTO, and the completion report will be submitted after the end of the project. 1.2 In the process of the project implementation, the project group will accept ITTO’s monitoring; the best

timing can be negotiated between the project group and ITTO’s Committee on Economic Information and Market Intelligence.

1.3 After the project completion, the project group will accept ITTO’s final review and evaluation. 3. Future Operation and Maintenance In the process of the project implementation, the Chinese government and the implementing agency will give all the time necessary support and services and will provide guarantee of funds born by the Chinese part. In the process of the project implementation, the project members will strictly abide by all agreements reached with ITTO authoritative departments, and will complete in time all outputs in compliance with the work plan put forward in the project proposal. The effective mechanism for submitting the reports to the Chinese government policy makers has been established through implementing several ITTO projects. After the project completion, the standing China Tropical Forest Product Information and Consultation Center will continually be responsible for the collection, collation, exchange and consultation of China’s tropical forest product information as well as the management of data bank and International Tropical Forest Product Information Exchange Network and other daily works. The center has been authorized by Ministry of Commerce and State Forestry Administration to be responsible for coordinating and checking the statistics data of China’s tropical wood products. Many data in the PD 55/99 Rev.1(M) report have been admitted by the authorities. Of which comments and recommendations on “Tax Rules” has been adopted by Chinese responsible department “Ministry of Finance” and has been implemented as of January 2003.

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PART IV TROPICAL TIMBER FRAMEWORK 1. Compliance with ITTA 1994 Objectives The project proposal is consistent with paragraph (a), (h), (l) and (n), Article 1, Chapter 1 of the International Tropical Timber Agreement, 1994:

(a) To provide an effective framework for consultation, international cooperation and policy development among all members with regard to all relevant aspects of the world timber economy;

(h) To improve market intelligence with a view to ensuring greater transparency in the international timber market, including the gathering, compilation, and dissemination of trade related data, including data related to species being traded;

(l) To encourage members to develop national policies aimed at sustainable utilization and conservation of timber producing forests and their genetic resources and at maintaining the ecological balance in the regions concerned, in the context of tropical timber trade; and

(n) To encourage information-sharing on the international timber market. 2. Compliance with ITTO Yokohama Action Plan 2002～2006 The project proposal relates to Action 2, 3, 5 and 7 of Goal 1 and Action 1, 6 and 7 of Goal 2 identified by ITTO Committee on Economic Information and Market Intelligence in ITTO Yokohama Action Plan 2002～2006: Goal 1: Improve transparency of the international timber market 2. Promote the collection and dissemination of accurate and timely trade and economic data relevant to the

global timber market, in cooperation with international organizations and other sources, with a view also to reducing duplication where possible.

3. Where feasible and in cooperation with relevant organizations, fill key data gaps through regular assessments and special studies, including the collection and analysis of information on forest law enforcement, sustainable timber harvesting, illegal trade, secondary products, substitution, plantation timber, and certified products.

5. Undertake regular studies of the medium and long-term outlook for the tropical timber market. 7. Encourage members and assist them to develop and improve national data gathering, reporting and

disseminating mechanisms and to provide relevant data, in a timely and complete manner, to ITTO; Goal 2: Promote tropical timber from sustainably managed sources 1. Promote public awareness of progress made in implementing sustainable forest management and in the

increased availability of tropical timber from sustainably managed sources. 6. Undertake regular studies of the competitiveness of tropical timber and tropical timber products

compared with non-tropical timber and non-timber substitutes. 7. Encourage members and assist them to identify trade barriers, shortcomings in forest law enforcement,

and other factors that may affect the access and marketability of tropical timber, and propose measures to overcome them and to establish and maintain economic and fiscal policies that are conducive to the competitiveness of the industry and trade in tropical timber from sustainably managed sources.

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ANNEX

Annex 1 A Profile of Implementing Agency

The Research Institution of Forestry Policy and Information (RIFPI) is one of the top policy and information research and consulting institutions in SFA, and is also the chief window for information exchange with international organizations, competent organs of forestry and forest product industry for foreign countries and chief productive and trade companies (enterprises). Over the years, the institute has been undertaking research and consultation work on national forest policies (including industrial policy and science and technology policy), medium and long-term development plans (including science and technology plans) and development strategies, and has completed a number of important projects in collaboration with some international organizations (such as ITTO, FAO, WB and INBAR) and civil ones (such as NASDA, IDRC and WWF and Ford Foundation，etc。). The institute now has 120 staffs, of which 40 are senior researchers and it has a core of professionals proficient in or familiar with English, Japanese, Russian, French and German. In addition to the professional research division, journal production division and computer based division it has a printing house and a forestry development company. The institute also has a forestry library, the largest of its kind in China. It is the national forestry development literature center with a collection of over 400,000 volumes as well as 1,000 journals, of which 700 are foreign.

Annex 2 Curricula Vitae of the Key Staff

Hu Yanjie Doctor’s degree, associate research fellow, majored in forestry economics, familiar with English, has participated in a number of research studies of national forestry policy and development strategy, and has completed a series of international cooperative projects. Dr. Hu will be the head of the project group, in charge of the project’s implementation. Shi Kunshan Research fellow, ex-director of RIFPI, majored in forestry, is familiar with English and is in charge of a number of research projects in collaboration with FAO, ITTO, Ford Foundation and other international organizations and institutions. He is now the correspondent of ITTO “MIS”。He will assist the leader of the project to accomplish the work. Lin Fengming Research fellow, now in charge of the practice of China Tropical Forest Product Information and Consultation Center, majored in forest product industry in university, proficiency in Russian, familiar with English and Japanese, has participated in the formulation of national forestry eighth five-year and ninth five-year plans and 2001-2010 long-term forestry plan and in the research of scientific and technological policy. He will assist the leader of the project to accomplish the work.

Tan Xiufeng Assistant research fellow, now is responsible for contributing articles to ”Market Information Services” of ITTO regularly。She majored at forestry and familiar with English; she will be in charge of statistics and data analysis.

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Annex 3 Assessment by the Thirty-sixth Expert Panel A) Overall Assessment All the points noted by the expert panel have been addressed in this revised proposal. As a result, the whole project proposal has been checked according to recommendations made by the thirty-sixth expert panel. The amendments are indicated in bold and underline letters in this revised proposal. B) Specific Recommendations 1 Provide more information on the forecasting

models and computer software to be used in qualitative analyses and quantitative calculations

More information on the forecasting models and computer software has been provided in section 2.5, please see page 8.

2 Include provisions for the identification of sources of supply to address the gap between demand and supply

Related provisions have been added in section 3, please see page 3.

3 Review the inclusion of improved transparency of the Chinese market as an indicator of the development objective in the logical framework matrix

The indicator “improved transparency of the Chinese market” has been changed into “Proportion of certified wood products in the market increased”, please see the logical framework worksheets on page 12.

4 Provide adequate information on the nature and locations of the domestic investigations to be conducted

The information on the nature and location of the domestic investigations had been provided on page 10, 11.

5 Explore possible options of publicizing and disseminating the outcomes of the international workshop under output 1,5

Possible options of publicizing and disseminating the workshop outcomes have been explored and could be found on section 4.5, please see page 11.

Documents

PD 480-07 Rev.2 (M) - China - ITTO