| Timber supply is one of the crucial factors that would influence China’s economicdevelopment. For China, the recent shift of forest policies from resource exploitation toprotection has contributed to a further reduction of domestic timber supply potential, alreadytightly constrained by historical overharvesting and by the low productivity and inappropriate agestructure of existing forests. However, China’s demand for timber keeps surging, driven by itsrapid economic growth. The limited domestic supply and insatiable demand make China heavilydepend on timber import. This in turn is regarded as a main reason of ecological degradation inthe Asia-Pacific region, especially on the view of climate change and illegal harvest.Faced on the blame from international society, Chinese government is addressing this issuewith the tenure reform on collective forests, and among others. To stimulate forest management,revitalize the forest sector and improve forest farmers’ livelihood, the Chinese governmentlaunched a nationwide forestland reform in2003, designed to give individual farmer some secureand transferable rights to currently collective forest. The government also eagerly expected thereform could increase timber supply based on the belief that the reform would improve themanagement intensities of forest. Therefore, what was the effect of the reform on China’s timbersupply and shortage became important and interesting.The objective of the present research was to investigate the effect of the tenure reform onChina’s timber supply. Furthermore, we focused on what China’s future forest sector would looklike under the tenure reform on collective forests. Special attention was given to the role of thetenure reform on collective forests in China’s timber shortage.The paper was organized as below. Firstly, we analyzed the situation of the China’s timbersupply, including domestic production and imports. Secondly, we proposed why the reform canincrease China’s timber supply theoretically and demonstrated the economic channels. Thirdly,using a25provincial panel data, we examined whether the reform had increased China’s timbersupply. Finally, with the econometric estimation and Global Forest Products Model (GFPM), wesimulated what the long-term timber production and shortage would be under the effects ofChina’s tenure reform. The conclusions were as follows.Firstly, the reason why the tenure reform would have positive effect on China’s timbersupply was the tenure reform would have positive effect on China’s forest. Theoretically, thereform would help to resolve the discrimination between the owner of the forests and thedecision maker of the forests, the high enforcement cost on collective forests, the restrictedobjective function and the discrimination between the decision maker of the forests and themanager of the forests. Therefore, it can be expected that timber production would also increasegiven the forest switch from non optimal management to optimal management. This is the economic channel of how the reform would have the positive effect on timber supply.Secondly, the econometric analysis showed that, the tenure reform on collective forests haveincreased China’s timber supply by12%, where and when it has been implemented, keepingothers being equal. However, this effect was not significant in10%level. Therefore, based on thecurrent data, the reform has not increased timber supply significantly. This empirical results wasresulted from the fact that, the reform has not increased forests significantly, hence has notincreased timber supply significantly, since the reform was implemented in recent years and therewas no enough time to expose the reform’s effect.Thirdly, the econometric analysis showed that, timber price and labor cost were thesignificant factors that influenced China’s timber supply. Their elasticities were0.80and-0.51respectively, and significant at1%level. Compared to the international studies on this topic,these values were consistent with most economists’ thoughts. These results implied that China’stimber supply was indeed influenced by market factors, although it was also controlled by thegovernment, since the econometric analysis showed that, harvesting quota and Natural ForestsProtection Program also influenced the timber supply at1%level. This was the feature of China’stimber supply, which influenced by both markets and government.Fourthly, under the assumption that, the effects of China’s tenure reform would expose inaround2020with the effects of10%or20%, GFPM projection showed that, China’s timbershortage would decrease by18%or8.5%, depending on the effects of the reform. If the GDPgrowth rate decreased from7.63%to5%, the timber shortage would decrease by31%in2030compared to the case with high GDP growth rate. This implied that, the demand side was thedominant factor in determining the timber shortage. If the ratio of drain to harvest changed from0.6in2060to0.77in2030, then China’s industrial roundwood shortage would decrease by11%compared to case where the ratio kept0.6all the time. Therefore, the results showed thefeasibility of “Timber Saving and Substitution” policy.Based on the above econometric and prediction results, the present research supported thefeasibility of the government’s policies, which intend to mitigate the timber shortage by thetenure reform on collective forests. What should be recognized is the effect of the reform has notbeen exposed yet. So how to guarantee the exposure of the reform effect by policies interventionis the next step the government should and have to work on. However, the government shouldrealize that even though with the tenure reform, China’s timber shortage would be still very large,since the effects from the demand side. Therefore, to take some new policies, relevant to thedemand side, may be a good prescription, although it was much more difficult to be implemented.In addition, the “Timber Saving and Substitution” policy should be another feasible approach tomitigate the timber shortage, and should be implemented further. |
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