China Economic Update

2018 Q2 highlights:

  • China has posted its Q2 GDP growth of 6.7%, slightly lower than 6.8 percent in Q1 of 2018. Tighter financial conditions (such as authorities continue to demolish on shadow banking and back up financial deleveraging) led to a moderated economic growth in first half of 2018, while manufacturing output moved slower but high-tech related activities remained solid growth; resilient domestic demand helped China maintain strong growth this year even though recent data show its economy is making slower paces. Focus Economics experts forecasted a 6.5% economy growth nationwide in 2018 and 6.3% in 2019.i
  • Property sales went down for the first time in six months due to continued speculation restrictions and rising mortgage rates both led by the government. However, new starts of real-estate construction in Q2 grew 11.3% compared 2017Q2 to 1.46 billion m2.

PMI (Caixin) indexes remained steady in Q2, both hit 51.1 in April and May and slightly decreased to 51.0 in June.ii Followed by a 12.6% year-on-year growth in May, China Exports achieved a 11.3% gain compared with the same period of last year to USD 216.7 million in June which surpassed the 10% growth forecast previously.iii

China Consumer Price Index (CPI) kept unchanged in April and May (101.8) and slightly raised to 101.9 in June.iv USD/CNY had been on the rise in Q2, increased from 6.34 (May 1st) to 6.42 (June 1st) and hit 6.62 on July 1st;v CAD/CNY kept the similar upward trend, went from 4.93 (May 1st) to 4.95 (June 1st) and hit 5.04 on July 1st.vi

Wood import data ceased to renew since March 2018

A notification was distributed from China Customs that all wood import data ceased to renew since March 2018 for now. BOABC, our regular data vendor informed Canada Wood China that all data renewal work will be back on track soon, China Economic Update will analyze data starting from April in detail at the end of Q3 2018.

Building material prices

Cement price dropped slightly from RMB 447.50 to RMB 441.67 per metric ton (down 1.30%) over June 2018.vii On the other hand rebar steel price went up lightly by 0.35% from RMB 4,007.86 per metric ton on June 1st 2018 to RMB 4,022.00 per metric ton on June 30th 2018.viii The log price index in March 2018 was 1,115.91 points which decreased 0.48% less than February 2019 and grew 2.22% compared to the same period year-on-year; the lumber price index in March 2018 was 1,123.99 which went down slightly of 0.33% month-on-month and decreased 0.56% year-on-year.ix

Wood import of Chinax

China softwood lumber imports reached 2.05 million m3, dropped 1.43% year-on-year and increased 63.43% month-on-month which fits the trend each year that the import volume always rises after Chinese New Year. From January to March 2018 the total volume of softwood lumber imports hit 5.37 million m3 with 0.28% growth year-on-year; of which the imports of Fir & Spruce and Radiata pine was 2.12 million m3 (down 0.1% year-on-year, accounts for 39.5% of total softwood lumber imports) and 0.27 million m3 (up 2.2% year-on-year, constitutes 5% of total softwood lumber imports) respectively.

In March China softwood lumber imports from Russia, Canada and Finland achieved 1.16 million, 0.34 million and 0.13 million m3 respectively. From January to March 2018 the above-mentioned three countries represented 57.36% (up 5.38% year-on-year), 16.56% (down 21.71% year-on-year) and 7.21% (up 4.68% year-on-year) of total softwood lumber imports.


i Focus Economics (June 19th, 2018). China Economic Outlook
ii Trading Economics (July 15th, 2018). China Caixin Manufacturing PMI
iii Trading Economics (July 15th, 2018). China Exports
iv Trading Economics (July 15th, 2018). China Consumer Price Index (CPI)
v XE Currency Charts: USD to CNY
vi XE Currency Charts: CAD to CNY
vii Sunsirs (July 2018). Spot Price for Cement
viii Sunsirs (July 2018). Spot Price for Rebar Steel
ix BOABC (June 2018). China Wood and Its Products Market Monthly Report
x BOABC (January to June 2018). China Wood and Its Products Market Monthly Report

CW China’s ‘Live With Wood’ goes viral online

It is probably every marketing director’s dream to see their promotional content going viral on social media platforms or create a ripple effect with the contents reaching a group of selected audience and their immediate circle influence, while continuous efforts to engage this group of audience with follow-up messages rolled out across multiple media channels.
The “Live With Wood” social media campaign funded by SLAP was exactly the one we had hoped for. By far, the campaign has created the ripple effect that resulted in multi-million media impressions. According to Meltwater, a third-party media monitoring agency, the original post featuring Dongyang resort project was picked up and retweeted by over 65 KOL (Key Opinion Leader) on their social media accounts and reached out to nearly 15 million people from April 12 to July 17, 2018.
There are clear signs that consumer attitudes towards timber as building materials in resort applications is positive. The positive feedback from consumers will encourage resort developers to consider wood when they are planning resort projects.

Rugao Port imports Canadian wood for 1st time, topping US$121,000

For the first time, Rugao Port of Jiangsu Province imported a total of 300 tons Canadian wood valued at US$121,000 on June 22.

The Canadian lumber has been transferred to a new and expanding wood industry park, which improves logistics and trading for imported lumber. This shows China opens up more infrastructure to cater for increasing demand for imported lumber and products.

Located in Rugao Port Modern Logistics Park, the area of the wood industrial park is expected to cover 4,000 mu (267 hectares) initially and expanded to 10,000 mu in future. It aims to build a trading center of softwood, hardwood, rare wood and wood-based furniture.

China releases three-year action plan for cleaner air

China’s cabinet has released a three-year action plan on air pollution control, solidifying a timetable and road map for improving air quality.

Economic, legal, technological, and administrative means will be adopted in a coordinated, methodical and targeted manner to “win the battle for blue skies,” according to the plan released by the State Council.

By 2020, emissions of sulfur dioxide and nitrogen oxide should drop by more than 15 percent compared with 2015 levels, while cities which fail to meet the requirement of PM2.5 density should see their density of PM 2.5, a key indicator of air pollution, fall by more than 18 percent from 2015 level, the plan said.

Cities at prefecture level and above should see the number of good-air days reach 80 percent annually and the percentage of heavily polluted days decrease by more than 25 percent from 2015 levels.

Efforts will be focused on areas including the Beijing-Tianjin-Hebei region and neighboring areas, the Yangtze River Delta, and the Fenhe and Weihe river plains.

The country’s air quality and people’s satisfaction with it should significantly improve after three years of work, it said.

To achieve the goals, authorities will optimize the industrial structure, promote clean energy, develop green transport, and strengthen regional coordination, among other measures.

The plan demanded stronger policy support, including better laws and enforcement, and more financing channels. Environmental monitoring and information disclosure should also be improved, it said.

China accomplished all the major tasks of its five-year clean air action plan in 2017, but challenges remain. A large number of cities still need to further improve air quality.

Revised code to take effect in August

A revised national standard for wood frame constructions will take effect starting August 1.

The Ministry of Housing and Urban-Rural Development has approved the revised code. It includes modifications to lumber grading and strength classifications.

Canada Wood China has contributed to developing and proofreading the technical content of “10 fire safety design” and “appendix R combustibility and fire resistance rating of timber components” in the revised version. The revisions are designed to provide better guidance on the use of green timber structures in building projects.