China Economy, Construction & Lumber Shipments
January economic highlights (China):
- China’s economy situation was generally positive in 2016 thanks to a growth in consumers spending and a property market rebound.
- GDP grew 6.8% year-on-year during Q42016, which is slightly more than the grow forecast of 6.7% as indicated in a Reuters poll of 42 economists.
- China’s economy managed to expand the fastest rate in Q4 in 2016 despite that the property market was tightened with less decisive policy support. Experts believe that increasing retail sales and manufacturing activities are the main source of growth.[i]
- China’s wood import in 2016 has reached 80.24 million m3 – setting a new record -and increased 13.2% compared to last year.
China’s GDP growth rate in Q42016 reached 6.8% with 6.7% growth in the full year, which fit the estimation from head of China’s state planning agency; consumption constitutes for 64.6% GDP in 2016 while annual per capital consumption was up 8.9% year-on-year to RMB 17,111 (USD 2,490).[ii]
Caixin PMI decreased to 51.0 in January 2017 from 51.9 in December 2016. December had marked the seventh back-to-back month growth period.[iii] Exports from China dropped 6.1% year-on-year to USD 209.42 billion in December 2016 with a revised 1.6% drop in November against an expected drop of 3.5%; Sales decreased 7.7% in the full year of 2016 which is the second year of decline and the lowest since the global financial crisis of 2009.[iv]
China Consumer Price Index (CPI) dropped to 102.10 Index Points in December (102.30 in November 2016).[v] USD/CNY fluctuated from 6.89 (December 1st) to 6.94 (December 31st) and 6.94 (January 1st) to 6.88 (January 30th)[vi]; CAD/CNY stayed level at 5.17 on both December 1st and 31st but increased from 5.17 (January 1st) to 5.28 (January 30th)[vii].
Real Estate Construction Market
In 2016 the total investment in national real estate reached RMB 10258.1 billion, growing 6.9% year-on-year;[viii] in the same year construction floor area started increased to 1.67 billion m2 with 8.1% growth year-on-year; residential floor area started was up to 1.16 billion m2 with 8.1% growth year-on-year.[ix]
Construction: floor area started
Building material prices
Common building material prices, price for cement in China declined 0.45% from RMB 294.83 per metric ton on January 1st to RMB 293.50 per metric ton on January 31st [x]; rebar steel was worth RMB 2,994.67 per metric ton on January 1st and then increased 7.50% to RMB 3,219.33 per metric ton on January 31st [xi].
Wood Export to China
- China’s wood import in 2016 has reached 80.24 million m3 – setting a new record -and increased 13.2% compared to last year. To be specific, lumber growth was 19.3% in 2016, close to 10% higher than log import; the proportion of lumber import increased from less than 20% in 2009 to 39.3% now.[xii]
- Sources of wood import was spread out but highly concentrated in four countries: Russia, New Zealand, US and Canada constituting for 29.82%, 15.44%, 10.24% and 10.15% of imports, respectively. They were followed by Thailand, Australia, Papua New Guinea and Solomon Islands with 2% to 5% share each.[xiii]
- In January 2017 during Chinese New Year, the market was closed and transaction volumes were predicted to decrease significantly; however wood price is expected to remain stable due to the continuously high cost of wood import.[xiv]
[ii] Leslie Shaffer (January 19th, 2017). China’s Q4 GDP up 6.8% on-year, beating expectation for 6.7%
[ix] National Statistics Bureau (January 20th, 2017). Development, Investment and Sales of national real estate in 2016
[xii] BOABC (January 2017). China Wood and Its Products Market Monthly Report
[xiii] BOABC (January 2017). China Wood and Its Products Market Monthly Report
[xiv] BOABC (January 2017). China Wood and Its Products Market Monthly Report