Wood forest products (WFPs) are forest wood-based products with economic, ecological, and renewable characteristics that are widely used in the home, in papermaking, for decorations, and in many other fields. As a result, global demand for WFPs is growing rapidly. Additionally, due to their sustainable and environmentally-friendly nature, WFPs have been recognized as an environmental product, and have received preferential tax policies for international trade. The Organization for Economic Cooperation and Development (OECD) divides environmental products into 10 categories, the seventh of which is “Sustainable Forestry”. Asia-Pacific Economic Cooperation (APEC) also incorporates forest products such as “Bamboo Flooring” into environmental products [1
]. Therefore, the trade potential of WFPs in the world is huge, and China has played an important role in this regard.
Statistics show that the export value of China’s forest products in 2017 exceeded $
150 billion, and it continues to maintain its status as the world’s largest exporter [2
]. The export of China’s forest products mainly consists of WFPs, accounting for 63.25% of China’s forest products in 2016 [3
]. What are the characteristics of the evolution of China’s WFPs? This study analyzed data from 2007 to 2016. (1) China’s WFP exports are growing rapidly, but they are also fluctuating. The export value increased from $
7.35 billion in 2002 to $
50.75 billion in 2016, an increase of 5.91-fold (Figure A1
). Research showed that the average annual export growth rate of China’s WFPs from 1993 to 2014 reached 13.56%, which is much higher than the 4.54% annual growth rate of the world’s average exports over the same period (Zhang et al., 2017) [4
]. China is also the world’s largest exporter of wooden furniture, with its export share accounting for 31% of the world’s share (Shi et al., 2015) [5
]. It is worth noting that from 2007 to 2009, China’s WFPs even experienced a slight decline in exports. After 2010, the export value of China’s WFPs showed steady growth. In 2015, the export value reached the highest historical record of $
53.7 billion, but in 2016, the value of exports fell drastically by $
3 billion (Figure A1
). (2) China’s WFP export products are highly concentrated. Paper and its products, wooden furniture, wooden products, and plywood rank among the top four WFP exports in China. The proportion of exports of four categories accounted for 37.91%, 28.03%, 15.54%, and 10.57%, respectively, which totaled 92.06% (Table A1
). (3) The share of the traditional export market showed a downward trend, and the export share of emerging markets showed a growth trend. China’s WFP export markets are mainly concentrated in the USA, Japan, China Hong Kong, and four European countries (United Kingdom, Germany, France, and The Netherlands). The average annual shares of the four major export markets in 2007–2016 were 27.62%, 10.71%, 10.16%, and 9.75%, respectively (Table A2
). However, from the perspective of development trends, China’s WFPs have gradually declined in dependence on exports from USA, Japan, China Hong Kong. The cumulative share of the three major markets fell rapidly from 69.32% in 2002 to 38.72% in 2016 (Table A2
). At the same time, China’s WFPs increased rapidly in emerging markets such as Australia, Saudi Arabia, India, Vietnam, and Singapore. Calculations from the trade potential model found that the financial crisis had a huge impact on the import of major developed economies (Gu et al., 2009) [6
]. In short, China’s WFP export growth is also full of ups and downs, and the high product concentration and the decline in the traditional export market share are not conducive to future development. Therefore, it is of great importance to find out which factors affect the growth of China’s WFP exports, the impact of different export target markets on China’s WFP exports, and the impact of changes in the size of international market demand, and so on. In response to these problems, this study will decompose dynamically the drivers of China’s WFP export growth from the perspectives of the market, its structure, and its competitiveness. The research in this paper is based on previous foundations, so that the relevant literature is first reviewed and analyzed.
Firstly, free trade has had a great impact on WFP exports, and many scholars are concerned about this. According to global trade analysis project (GTAP) simulation, China’s entry into the World Trade Organization (WTO) has greatly increased the size of its import of foreign WFPs, and the price of wood, wooden products, pulp, and newsprint in China has decreased. The Association of Southeast Asian Nations (ASEAN) and emerging economies in Asia will benefit greatly, and the world trade in WFPs will change. At the same time, the size of China’s WFP processing trade exports is also growing rapidly (Gan, 2004) [7
]. Luo et al. (2018) [8
] believe that WFP is a water-intensive product, and its trade has effectively alleviated the pressure of global water shortages. At present, China’s virtual water trade, based on forestry products, is growing rapidly. Under the background of economic globalization, China has attracted a lot of foreign direct investment (FDI) to develop its export-oriented forest products processing industry and its service industry. Its production materials are mainly imported from abroad, which is conducive to China’s forest ecological recovery (Li et al., 2015) [9
]. Overall, free trade has promoted the development of WFP trade in the world. China’s role in the global value chain is more of a model of “importing logs, then processing them into consumer goods, and finally exporting them to the world”, which has contributed to the effective allocation and utilization of global forestry resources.
Secondly, the factors affecting WFP exports are also important research hotspots. Bertrand et al. (2016) [10
] studied the relationship between forest resource endowment and the trade of WFPs in the European Union (EU) from 1995 to 2007. It was found that forestry resource endowment has a significant impact on the international trade of wood pulp, paper products, and wooden furniture in Europe. Zhang et al. (2009) [11
] used the gravity model to calculate the export trade of China’s WFPs from 1995 to 2004. The study identifies the characteristics of China’s own forest resources and that cutting restrictions affects its export trade model of WFPs. China has imported a large number of WFPs for processing and production, and its low-value WFPs are exported to foreign countries. But in the context of a stronger currency (RMB) and higher logistics costs, China’s imports and exports of WFPs are likely to fall. Additionally, Xiong et al. (2017) [12
] find that the rising trade costs have led to declining profit margins for China’s producers and exporters of WFP. At present, many of China’s WFP manufacturers have already moved their factories abroad, and Vietnam is one of the main destinations [13
]. Vietnam has become Asia’s second largest exporter of WFPs, and it is highly competitive with China’s exports of WFPs in USA and European countries [14
]. Gu et al. (2010) [16
] undertook an empirical analysis of the export of China’s WFPs in 10 markets from 1992 to 2006. It was found that the export growth of China’s WFPs is mainly driven by the effect of improving competitiveness, and that the effect on market structure is negative. During this period, China’s export share of WFPs to 10 markets reached 84%. Today, China’s WFP export markets are further dispersed, and its share of exports to 10 markets has fallen to less than 70%. Additionally, China has begun to tap the trade potential of emerging economies and “The Belt and Road” countries. This study will use the latest data to analyze the reasons for the export growth of China’s WFPs.
Third, research on the constant market share (CMS) model and its applications has also made a lot of progress. The model assumes that the international market share is constant if the export competitiveness of one or more products of a country (region) does not change. In fact, product export and market share are changing, which must be caused by the change in international market demand, the demand structure of the importing country, and the competitiveness of the exporter’s products (Xiao et al., 2010) [17
]. Tyszynski (1951) [18
] was the first to introduce this model to the empirical study on the global manufacturing trade in manufacturing industry from 1899 to 1950. Jepma C. (1986), Milana C. (1988), and Fredoun Z. (2006) [19
] further summarize the application domain, the limitations, and the prospects of the CMS model, and the model construction is perfected. Additionally, Shane et al. (1993), Drysdale et al. (1996), and Edwards et al. (2008) [22
] respectively analyzed the trade growth factors of Australia, New Zealand, and South Africa based on the CMS model. At present, the CMS model has been analyzed and applied in a series of fields, such as environmental products and renewable energy products. The size of China’s WFP exports is growing in volatility, while the distribution of its export markets and its product structure indicators are also constantly changing. It is important to know the extent of how these changes affect China’s WFP export growth, and which indicators have more influence. This requires the introduction of analytical tools, by which the CMS model can solve this problem. Considering the wide application and maturity of the method [25
], this study uses the modified CMS model for empirical analysis.
Reviews show that scholars are concerned about China’s WFP export trade. It is worth pointing out that the existing literature on the factors influencing China’s WFP exports have some problems, such as old data and incomplete classification of the export WFPs. This study will adopt the modified CMS model to make an empirical analysis on the causes of the growth of China’s WFP exports from 2002 to 2016, in order to identify the problems. The category on WFPs has been supplemented, and is related here in more detail and with greater volume than in previous literature.
The gross value of WFPs imported from the world and China at each time point in the 15 markets was calculated, respectively expressed as Rj
is used to measure rj
. The import value of WFPs in the sample markets at each time point is shown in Table A3
. The value of each classified WFPs imported from the world and China at each time point was calculated, respectively expressed as Ri
, and Ri
was used to calculate the index ri
. The calculation of the classified WFP imports at each time point is shown in Table A4
. The data (Table A3
and Table A4
) were substituted into Equation (4), and the calculation results of the causes of China’s WFP export growth are shown in Table 2
3.1. Market Size Effect
shows that the effect of market size had a greater impact on China’s WFP export growth, with the lowest contribution rate in the four periods reaching 18.54%. In particular, the most significant impact was from 2008 to 2009, which led to a decline in China’s WFP exports. This shows that the financial crisis has not only led to a decline in import demand for WFPs in the world, but also seriously affected China’s WFP exports. The calculation results show that the market size effects in 2008–2009 and 2015–2016 were negative, indicating that international market demand has declined, and that China’s WFP export has also declined correspondingly. The trend of WFP imports in the world from 2002 to 2016 is shown in Figure 1
Comparing Figure A1
with Figure 1
, the fluctuations of the two figures were similar. In 2009 and 2016, the world’s WFP imports and China’s WFP exports fell in tandem, and the years other than 2015 also maintained simultaneous growth. The convergence of the two charts coincided with the conclusion of the CMS model analysis, which further verified the conclusion that China’s WFP exports are easily affected by fluctuations in world demand. This impact will offset the promotion of China’s WFP competitiveness and export structure optimization.
3.2. Structure Distribution Effect
The structure distribution effect is the collective name for the product structure and the market structure effects. Judging from the model decomposition, the average surplus of the product structure effect in the four periods did not exceed $0.1 billion, and the pull of China’s WFP exports was not obvious. It showed that the structure of China’s exports of WFPs did not adapt well to the world’s rapidly changing WFP import demand structure. To a certain extent, it reflected the lack of innovation and the added value of China’s export of WFPs. As a result, the overall export growth rate of classified WFPs did not surpass the global average. The product structure of China’s export of WFPs is in urgent need of optimization and upgrading.
On the other hand, the market distribution effect of China’s export WFP was also small. From the data analysis, the surplus of the market distribution effect were $−1.56 billion, $−0.04 billion, $0.69 billion, and $−0.12 billion from the first phase to the fourth phase, and there was still a gap compared with the scale effect. This indicates that the market distribution effect contributed poorly to the export of China’s WFPs. The above research shows that China’s exports to emerging markets such as Australia, Saudi Arabia, Singapore, and other emerging markets have seen a large increase, and that the low market distribution effect indicates that the growth of emerging markets has been completely offset by the decline in exports from traditional key markets such as the USA, China Hong Kong, and Japan. The decline in the share of major traditional export markets and the limited contribution of growth in emerging markets have affected the export performance of China’s export WFPs. Overall, the performance of these traditional markets is still the biggest impact on the market distribution effect of China’s WFPs.
3.3. Competitive Effect
The absolute values of the contribution of competitiveness in the four periods were $14.73 billion, $4.30 billion, $22.22 billion, and $9.94 billion, respectively. Compared with the market size and structural distribution effects, the competitiveness effect had the greatest impact on China’s WFP export growth.
3.3.1. Product Competitiveness Effect
The detailed decomposition of product competitiveness effect affecting the export growth of China’s WFP in 2002–2016 is shown in Table 3
. The order of products in Table 3
was based on the cumulative value of the product competitiveness effect surplus (Table A5
) of each product from 2002 to 2016.
shows that China’s WFP competitiveness effect surpluses were positive in 2002–2008, 2008–2009, and 2009–2015, indicating that the product competitiveness effect had a significant export promotion role for the entire WFP. However, the surplus of product competitiveness in 2015–2016 was negative, indicating that the competitiveness of China’s WFP exports declined during this period. Overall, China’s WFP product competitiveness came mainly from paper and its products, wooden furniture, wooden products, and plywood products. During the financial crisis of 2008–2009, the sharp reduction in international import scale led to a market-size surplus of China’s WFP exports of $
−5.35 billion, while the surplus of product competitiveness in the same period reached $
2.21 billion. The largest contributors to the product’s competitiveness during this period were wooden furniture, paper and its products, wooden products, and plywood (Figure 2
shows that the competitive effect surplus of wood furniture, paper and its products, wooden products, and plywood in 2008–2009 accounted for 49.79%, 27.33%, 11.92%, and 7.51% respectively, with a cumulative proportion of 96.55%. From the evolutionary trend, the product competitiveness effect surplus of paper and its products, wood furniture, and plywood had a large positive value over the periods of 2002–2008 and 2009–2015 but declined in the periods of 2008–2009 and 2015–2016. However, the product competitiveness effect of wooden products showed a large increase in 2008–2009, and its contribution rate to China’s WFP exports also showed an overall growth trend from 2002 to 2016 (Table 3
). Additionally, except for 2008–2009, the contribution rate of paper and its products in the other period was higher than that of wooden furniture (Table 3
3.3.2. Market Competitiveness Effect
The detailed decomposition of the market competitiveness effect, affecting the export growth of China’s WFPs in 2002–2016, is shown in Table 4
. The order of the markets in Table 4
was based on the cumulative value of the market competitiveness effect surplus (Table A6
) of each market from 2002 to 2016.
shows that the product competitiveness effect surplus was similar to the market competitiveness effect surpluses in 2002–2008, 2008–2009, and 2009–2015, which were positive, indicating that the market competitiveness effect effectively promoted China’s WFP exports. However, the market competition effect surplus in 2015–2016 was negative, indicating that the market competitiveness of China’s WFP exports declined during this period. Overall, China’s WFP market competitiveness mainly came from the USA, China Hong Kong, United Kingdom, and Japan (Table 4
). For example, during the financial crisis of 2008–2009, the competitiveness of China’s WFP export market remained at $
2.09 billion. The markets that contributed the most were USA, other markets, Singapore, and Japan (Figure 3
shows that the market competitiveness contribution ratios of USA, Singapore, Japan, United Kingdom, and Malaysia in 2008–2009 were 28.46%, 13.18%, 10.16%, 7.99%, and 7.53%, respectively, for a total of 67.32%. From an evolutionary trend, the market competitiveness effect surpluses of key markets such as the USA, China Hong Kong, and United Kingdom were relatively large in 2002–2008 and 2009–2015, but these decreased significantly in 2008–2009 and 2015–2016. However, the market competitiveness effect surpluses of Singapore and Malaysia during the 2008–2009 financial crisis continued to grow (Table 4
). It should be said that China’s WFPs had strong adaptability and competitiveness in these key markets. These markets are critical to China’s WFP exports. If any time period is not competitive in a key market, it will directly affect the overall market competitiveness of China’s WFPs. For example, the market competitiveness of China’s WFPs in America from 2015 to 2016 was a surplus of $
−0.43 billion (Table 4
), which had the greatest negative impact on the market competitiveness of China’s WFPs in the same period.