Representatives from SEC member PLEA were among an American wood products delegation attending the Carrefour International du Bois trade show in Nantes, France, in early June and also made presentations at a seminar sponsored by American Softwoods in conjunction with the show. About 30 people attended the seminar.

"It was extremely positive that there was such strong participation from American companies all of whom expressed enthusiasm for the show and for the business opportunities and new contacts that were made," said Charles Trevor, consultant for SFPA and the American Softwoods European markets.  Carrefour International du Bois is considered the premier European show for wood and wood products.  This year's event featured 500 exhibitors and drew10,000 visitors. The next show will be held June 6-8, 2012.

The global economic crisis has caused profound impacts on the Chinese export-oriented wood products industry and frozen its appetite for raw materials imports. According to trade statistics, China's imports of wood products, primarily logs, fell by 9.6% in 2009 to $7.3 billion from $8 billion in 2008, this compares to average annual growth of 13% between 2005 and 2008. China's wood products exports (excluding furniture) also plunged in 2009 to $7.7 billion from previous year's $9.3 billion, down by 17% (Global Trade Atlas). Economic crisis also led to high overstock and significant price drops of wood fiber commodities which put over 50% of wood-based panel companies (approximately 3,000 enterprises) in severe financial trouble ending with forced plant closure or stopped production. Since 2008, wood fiber price dropped by 15-25% in the market. Wood-based panel and flooring industry's overstock has reached over 6 million cubic meter. Forest products companies located in only 6 counties of 4 provinces of Zhejiang, Shandong, Jiangsu and Hebei have reportedly laid off a total 3 million workers, according to official sources (State Forestry Administration, 2009).

China's domestic demand for furniture is forecast to increase 10-15 percent annually for the next five years. The increase is attributable to Chinese consumers' increasing income and an increasing number of first-time homebuyers in China.  These buyers are in the market as part of the GOC's transition from a centrally-planned to a market-driven economy, it no longer provides state-run housing as part of employment. Private homeowners tend to spend more money on interior decoration than those who live in state-owned apartments. Also, China's commercial and manufacturing sectors are forecast to continue growing into the foreseeable future. This will increase demand for office furniture.

Housing industry has become the main driver of wood products consumption in China. After a setback in 2008, home sales of 2009 jumped again by over 43% to reach 850 million square meters with a total sales of CNY 3.5 trillion, 40% up from CNY 2.5 trillion of 2008 (Figure 1). According to government statistics, total floor space of new construction (including both residential and non-residential projects) in 2009 increased by 16.6% to reach 3.2 billion square meters, with total investment hitting CNY 9 trillion, up 36.6% from 2008 (Figure 2). But it should be pointed out that despite this fast-growing home sales, 2009 was characterized by less home construction than homes sold because of the unsold inventory left over from 2007-2008. According to a report by China Index Research Institute, between January and October of 2009, floor space for new residential building starts only increased by merely 0.4%, even lower than 2008's 1.4%. Both are far below average annual growth rate of 19.8% between 2000-2007 (China Index Research Institute 2009[1]).

Currently, about 30% (or 12.4 billion square meter) of these residential buildings are located in the urban area. Due to poor construction quality, industry experts estimate that at least half of existing urban residential buildings will be torn down and rebuilt during the next 15-20 years. According to industry insiders, another 30 billion square meter of new residential buildings will be constructed over the next decade, in addition to current 42 billion sq meters as of 2008. Therefore, on-going new home starts combined with remodeling and expansion projects will open up tremendous markets for building and home furnishing products. Wooden door industry is probably the largest beneficiary of this domestic market growth.  In 2009, the Chinese wooden door industry kept a staggering 30% growth to reach over CNY 60 billion in total output value, and is expected to exceed CNY 70 billion by the end of 2010. Industry experts estimate that the domestic Chinese market will demand over 56 million wooden door sets per year.