Sino-Canada meeting leads to consensus on promoting green wood buildings

An annual Sino-Canada meeting on modern wood construction was held in Beijing on March 5, 2019, summarizing the development of wood frame construction (WFC) in China to better promote the practices of green building.

The meeting, attended by representatives from the Ministry of Housing and Urban-rural Development (MOHURD), the Embassy of Canada to China and Canada Wood Group, resulted in an agreement to strengthen work on green modern wood construction under a memorandum of understanding (MOU) that was renewed in December 2015.

The three parties – Natural Resources Canada (NRCan), Canada Wood Group and MOHURD – decided to prioritize the training program detailed in the MOU. This will entail extending training to both central and provincial levels of MOHURD.

They are also considering changing the expert panel under the MOU by bringing in more valuable industry professionals, according to the meeting.

Drawing on government support and market forces, the joint working committee will co-develop WFC in line with China’s conditions.

The committee is a bi-lateral mechanism that oversees MOU cooperation efforts and addresses the technical barriers to WFC. The JWC holds annual meetings to review progress of the previous year and agrees on a work plan for the coming 12 months.

 

Canada Wood Released China Tracking Wood Project report

Canada Wood China (CW China) released the Tracking Wood Project Starts Report with the goal of helping the wood construction industry better understand developments and trends in the China market.

The report provides statistics of new wood construction starts in six Chinese key provinces from a survey conducted in 2018. Quarterly statistics of floor areas are analyzed for six building categories.

Provinces of Jiangsu, Hebei, Shandong, Guangdong, Hubei and Shandong are selected due to their leading positions in wood construction development. The six provinces account for 42% of China’s GDP and 37% of the country’s population as of 2018.

Key findings include:

    1. Resort and residential projects lead the way
      By building category, resort and residential projects ranked as the top two segments; Office and commercial projects had moderate growth from Q2 to Q4. Category of Science, education, culture and health (SECH) remained small share. Transportation category was also tracked, it had a share of 4% in Q4 of 2018.
  1. Estimated three million sq.m of wood construction was built in 2018
    • The construction floor area of the new projects started in Jiangsu reached 179,830 sq. m in 2018, ranking number one in the six provinces covered in the report. It was followed by Shandong (178,820 sq. m) and Guangdong (140,919 sq. m).
    • New project starts in Sichuan was strong in Q1 2018 while project starts slowed down from Q2 till Q4.
    • New projects started in Hebei and Hubei provinces continued to increase in 2018 and Hubei became the strongest province among the six in Q4.
    • Total construction floor area of all wood projects started in the six provinces reached 842,062 sq. m in 2018. The estimated annual wood construction started in the year is over three million sq. m, including privately built and non-registered projects.

China’s Belt and Road Initiative and its Impact on Lumber Imports

According to trade data sourced from China Customs, China imported 36.8 million cubic metres of lumber in 2018, a slight decline of 1.6 percent from 2017. Of total lumber imports, softwood lumber accounted for 24.9 million cubic metres, a slight decrease of one percent compared to 2017.

However, Russian softwood lumber exports to China were a whopping 15.65 million cubic metres in 2018, an increase of 10 percent compared with 2017. This is more than double the exports in 2014 and now represents a 63% share of the China market. Clearly, China’s “Belt & Road Initiative” (BRI) was partly responsible for the increase in softwood lumber volumes from Russia to China.

The Belt & Road Initiative is a massive program that includes many large-scale infrastructure projects with other countries. Proposed by Chinese President Xi Jinping in 2013, the main purpose was to shift overproduction to inland regions, taking advantage of China’s lower labor costs and capacity. At the same time, it’s designed to improve the supply chains of key suppliers and to crucial export markets, improving the competitiveness of Chinese goods and raw materials.

In 2018, the number of operational China-Europe block trains had exceeded 6,363 (vs. 3,678 in 2017), running between 56 Chinese cities and 49 cities in 15 different European countries. Among these, 2,690 were return trains that shipped from Europe to China, a significant increase of 111% from 2017.

Currently, about 50 to 60 percent of total container transportation costs of China-Europe block trains are being paid through local government subsidies since the regular cost is still very high. This is partly due to the lower number of “return-block trains” (from Europe to China) versus “go-block trains” (from China to Europe). Therefore, the development of the return train is one of the key factors that will determine whether China-Europe block trains can finally operate without government subsidies. Russian lumber has been one of the most important products shipped on the return-block trains. From the central government’s plan, the subsidy mechanism is expected to be canceled in 2020.

The following map highlights major supplying cities in Russia along the rail route to China. The green dots represent major rail hubs in Russia and the red dots are the major inland cities in China.

Every week from Russia Siberia (Irkutsk, Krasnoyarsk and Tomsk), there are regular block trains to central Chinese cities such as Chengdu, Chongqing, Xi’an and Wuhan. There are also less frequent trains going to Linyi and Ganzhou. Total transportation costs paid by Chinese importers vary from $1,800 – $3,000 per 40’ container, which is faster, and also cheaper than (or the same with) shipping from Russia to China by regular trains followed by inland transportation.

Although no exact number has been released, block-train operating companies estimate there were around 600 return-block trains, with around 1.2 million cubic meters of lumber shipped to China in 2018. Most of it was from Russia and some quantity was shipped from Finland and Sweden. Chengdu, Chongqing and Xi’an were three of the main inland cities for return block trains with Russian lumber in 2018, representing more than 80% of the total lumber volume.

As a result of the BRI, there is more Chinese investment in Russia’s forest and wood industries, both from state-owned and private sector companies. Furthermore, it seems that more recent investment is being focused on remanufactured products with more kiln-dried lumber and profiled products being sent to markets in China. Value-added and kiln-dried products can be shipped much further into China and at lower costs compared to heavier green lumber.

The block trains under BRI have brought great changes to the imported lumber supply chains in China, making Russian suppliers more competitive. However, the block train system still struggles to operate at a reasonable cost. Only when the real operational cost is reduced to the market competitive level, will BRI block trains be developed for the long term after the government subsidy is cancelled in coming years.

 


About the writer: Jane Guo is the China Operations Manager for Forest Economic Advisors. In this role, Jane is responsible for conducting market research, information assessments, industry evaluation as well as logistics organization for market trips, conferences and tours in China. The focus of the China office is on softwood log and lumber products, but a variety of other products is also covered (some hardwood and value-added products).

For further background information, please contact: Russ Taylor rtaylor@getfea.com, or visit: www.woodmarkets.com/publication or www.getfea.com

Chongqing Yuanlu Community Center nabbed International Design Award

Chongqing Yuanlu Community Centre (Click here for gallery) designed by Jie Lee from Challenge Design, won the International Design Award on March 4. The news was announced at the 15th annual Wood Design Awards ceremony held by the organizer, WoodWORKS! BC at the Vancouver Convention Centre. A total of 10 projects from China running under this category were shortlisted in the final award.

The project, sitting next to Longxing Ancient Town in southwestern China’s Chongqing, consists of three buildings of different sizes side-by-side on the hillside. Wood is used in the Chongqing Yuanlu Community Center to closely link space and structure. Exposed Canadian Douglas fir glulams provide a crucial visual element on the interior while the order and form similar to traditional Chongqing sloping roofs are adopted for expression.

“I should say thanks to the judges and really appreciate that our project is recognized by this prestigious award. Projects in China could not accomplish this high achievement without Canadian government and Canada Wood China (CW China)’s consistency in promoting wood frame construction in China, as well as the technical support that they provide to the market, “said Jie Lee, chief designer of the Chongqing Yuanlu Community Centre (in picture), adding that they will co-operate with CW China to boost modern wood architectures in China.

China makes up two-thirds of award nominees in the International Wood Design category this year. These nominees feature in the resort and public service sectors. Seven of the projects are in eastern China, including two in Shanghai. The remaining three projects are in central and southwestern China.

In total, 103 projects in 14 categories (including designs, environmental performances, western red cedar, wood innovation, engineer, and architecture) were nominated this year. Submissions are from the United States, China, South Korea and Tajikistan, in addition to British Columbia.

A diversity of projects of various types and sizes demonstrating outstanding architectural and structural achievement using wood are amongst the nominees. They include a research laboratory, an energy facility, a winery, First Nations structures and mid-rise projects, according to the award’s press release.

To celebrate wood design projects at home and abroad, the Wood Design Awards are presented by Wood WORKS! BC, the Canadian Wood Council and its member associations; with funding support from Natural Resources Canada and Forestry Innovation Investment.

Click here to learn more about the 10 China Nominee Projects for the 2019 Wood Design Awards.

Canadian lumber makes inroads in Huzhou, China

A Sino-Canadian timber co-operation event organized by Canada Wood China was held on January 23, 2019 in Huzhou City of eastern China’s Zhejiang Province. The goal was to help the city diversify its wood sourcing channels amid a bruising U.S.-China trade war.

Canada, as one of the world’s largest lumber producers and exporters, boasts abundant timber resources that can be used in both industrial building and manufacturing. Canadian lumber provides a big opportunity for timber companies in Huzhou as they seek new trade partners since China announced an additional 10 percent tariff on imported wood products and logs from the United States in September 2018 as a response to Washington imposing new tariffs on Chinese goods.

The matchmaking event attracted 58 people, including Katrin Spence, vice chancellor of the Consulate General of Canada in Shanghai; representatives from wood associations (including Canada Wood China and the Quebec Wood Export Bureau); Canadian wood suppliers like Interfor and Canfor, as well as wood materials and production companies in Huzhou.

The event came after Canada Wood China worked for months with its two partners, the China Council for the Promotion of International Trade (CCPIT) Huzhou Committee and the Canadian Consulate General in Shanghai.

The CCPIT Huzhou signed co-operation agreements with Canada Wood China and the Quebec Wood Export Bureau during the event. The deals are designed to enhance communication and promote trade activities between companies in Huzhou city and Canada.

The majority of Huzhou’s wood imports are from North America. In the first 11 months of 2018, imported wood products from the United States were valued at around 662 million yuan (CAD$130 million), accounting for 33.5 percent of the city’s total wood imports.