China closes natural forests, Vietnam fears timber shortage

In March 20, 2017

(VN) – Up to 90 percent of timber in the Central Highlands has been sold to Chinese, according to locals. Chinese businesses have been flocking to Vietnam to buy wood as their government has closed natural forests in 14 provinces in the country.

This has caused great anxiety among Vietnamese wooden furniture manufacturers. It is expected that China will have to import 50 percent of the volume of timber it needs, and the majority will be from Vietnam.

Chinese businesses have been flocking to ASEAN countries to look for timber. However, other countries are also taking drastic measures to protect their timber resources.

Laos, Cambodia and Myanmar all have prohibited export of some kinds of timber. This has put pressure on the demand for hardwood from countries with developed wood processing industries like China, India and Vietnam.

Chinese businesses have also been going to the Central Highlands to purchase timber.

Meanwhile, Vietnam lacks timber materials to make products for export and domestic consumption.

According to the Vietnam Wood and Forestry Products Association (Vifores), Vietnam needs 24 million cubic meters of wood a year.

Analysts said that Vietnamese wooden manufacturers are afraid of competing with Chinese businessmen, who have powerful financial capability, big production scale and strong cooperation.

To Xuan Phuc from Forest Trends commented that most Vietnamese enterprises are small, and therefore, are less competitive than Chinese.

According to Do Xuan Lap, chair of the Binh Dinh Wood and Forestry Products Association, many Chinese enterprises have set up establishments in most of the timber growing areas to collect materials, especially in the Central Highlands.

Up to 90 percent of timber in the area has been sold to Chinese, who have on-site sawmills and hire Vietnamese to collect timber.

Sources said Chinese businessmen are collecting rubber wood in large quantities in many localities.

Meanwhile, customs agencies say the wood exports to China are not high. Some analysts guess that Chinese businesses buy timber and carry to Cambodia for storage.

They expect to resell the wood later to Vietnamese enterprises at higher prices when prices escalate due to the shortage.

Meanwhile, Luu Phuoc Loc, director of Mtrade and deputy chair of the Binh Duong provincial Wood and Forestry Products Association (BIFA), has warned about trade fraud.

“Many foreign invested enterprises import nearly-finished products and then assemble and paint the products in Vietnam. I believe that they just want the Vietnamese C/O (certificate or origin),” he said.

“The Vietnamese C/O will allow them to export products to the US market,” he explained. “They also want to take full advantage of Vietnam’s cheap labor force.”


China closes natural forests, Vietnam fears timber shortage by Kim Chi.  Available from <http://english.vietnamnet.vn/fms/business/174154/china-closes-natural-forests–vietnam-fears-timber-shortage.html> [Last update 08:00 | 10/03/2017]

 

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