Abstract:

Objective: As the world’s largest importer of wood, China is frequently alleged to be the “chief culprit behind deforestation” and a “black hole for global forest resources”. This study aims to clarify the relationship between China’s wood imports and the wood production and deforestation in source countries, thereby addressing these accusations through empirical research. Method: In this study, a constructed theoretical logic chain was used to systematically analyze the adjacent node connections between China’s wood imports and deforestation, on which a panel data model was employed to empirically investigate the impact of China’s wood imports on the log output of source countries using data from 37 countries spanning 2003 to 2022. Result: 1) Accusations of deforestation linked to China’s wood imports is characterized by uncertainties at every stage of the theoretical logic chain, making it difficult to definitively attribute global forest destruction to China. Even if some responsibility exists, its extent is minimal. 2) China’s wood imports had a statistically significantly positive impact on the output of timber from importing source countries, but the degree of impact was small. Specifically, a 1% increase in China’s imports from a source country was associated with only a 0.070% rise in the country’s log output. Robustness checks and endogeneity analyses have confirmed these findings. Consequently, while a link exists, the negligible magnitude of this effect suggests that accusations blaming China’s wood imports for substantial global deforestation are exaggerated and lack empirical support. 3) China’s timber imports had no significant impact on the output of log from importing countries during 2003—2007. Although there was a significant positive effect in 2008—2019 and 2020—2022, the magnitude gradually declined. The impact was significant for countries with medium-to-high export dependence (coefficients: 0.089, 0.084) and smaller economic sizes (0.098), but insignificant for low-dependence or larger economies. Similarly, effects were significant for middle- and low-income countries (0.084) but not for high-income ones. Notably, while non-tropical wood imports had a modest effect (0.022), tropical wood imports showed a substantial impact (0.194). Collectively, the heterogeneous effects do not support the narrative that China’s wood imports drive widespread deforestation. 4) Free trade agreements (FTAs) with China positively moderated the relationship between China’s wood imports and the log output of source countries, whereas the moderating effect of the exchange rate of the currency of the source country on imports was relatively weak compared to the RMB. Conclusion: China should proactively address these accusations, timely reform its “high-volume throughput” forest product trade model, focus on cultivating domestic forest resources and developing the local forest product market, optimize the structure of wood import sources, improve environmental clauses related to sustainable forest management in FTAs, promote wood legality verification and forest certification processes, and standardize the overseas forestry operations of Chinese enterprises. Collectively, these measures will contribute to the sustainable development of overseas forests.

Key words: wood import, importing source country, log production, industrial log and sawnwood, bidirectional fixed effects panel data model