Canada Wood Today | The Canada Wood Group

China Economic Update

Eric Wong

By Eric Wong

Managing Director, Canada Wood China

July 26, 2018

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