The potential impact of legality requirements for China’s imported timber: a global forest product model‐based analysis

Abstract

Utilizing the Global Forest Products Model (GFPM), this paper analyzes the potential impacts of China’s timber import legality requirement policies. Two alternative scenarios are compared with the baseline scenario: (1) China requires that imported timber must comply with the requirements of Verified Legal Compliance (VLC), (2) China imposes tighter requirements for imported timber, which must come from sustainably managed forests and meet Forest Certification (FC) requirements. The results show a decline in log production but an increase in processed wood exports to high‐risk countries, suggesting a move towards more valuable wood processing. Both high‐ and low‐risk countries are expected to see an increase in forest stocks. Welfare analysis indicates that high‐risk countries will benefit from industrial upgrades, while China might face welfare losses. Nevertheless, the enforcement of legal standards for timber imports into China is likely to enhance the perceived legitimacy of the sources of domestic timber materials, thereby facilitating the re‐entry of processed timber products into developed markets. This study proposes that China’s timber import regulations could offer mutual advantages, aiding in the fight against illegal logging and encouraging the legal timber trade.