Yeheng Jiang

This paper quantifies the rerouting of China’s wood and paper sector value added to the United States over 2016–2022, a period spanning the imposition of U.S. Section 301 tariffs and subsequent supply-chain reorganization. Using OECD ICIO, a three-term value-added decomposition separates direct bilateral from indirect trilateral flows through third-country transit economies. A structural decomposition analysis attributes changes in the trilateral channel to four factors: value-added intensity, China’s domestic supply-chain structure, China’s intermediate export orientation toward transit economies, and transit-economy global value chain output combined with U.S. final demand. The trilateral channel grew by 125.5% in wood and 159.4% in paper over the study period, substantially exceeding bilateral channel growth. China’s active reorientation of intermediate exports toward transit economies emerged as the dominant supply-side driver. Vietnam, Mexico, and Canada are identified as the principal conduit economies. Value-added RCA consistently exceeded gross-trade RCA in both sectors; in paper, the gap widened throughout the tariff period, indicating that China’s upstream international competitiveness strengthened despite bilateral trade barriers. These findings demonstrate that bilateral tariffs are materially less effective than gross-trade statistics imply. Value-added tracking should accompany gross-trade monitoring in trade policy assessment.

China’s timber market is very complex and heterogeneous, and is experiencing the impact of the construction of national reserve forests and the downturn in the real estate sector. By setting up a partial equilibrium model which reflects the heterogeneity of China’s wood market, not only difference among domestic timber groups can be identified, but the dissimilarity of imported timber can also be differentiated from the aspects of species and sources. This model is capable of capturing the effects of macroeconomic conditions, forestry sector policies, and trade cost variations on China’s timber market structure. According to simulations of supply shocks, China’s large-diameter log capacity enhancement will have a noticeable crowding-out effect on imported timber, suggesting the diameter of logs is an important factor for market entities to make trade-offs between domestic and imported timber. Amidst both supply and demand shocks, the equilibrium quantity changes in China’s domestic small-diameter logs and imported timber are dominated by demand shocks, whereas the equilibrium quantity change in China’s domestic large-diameter logs is dominated by supply shocks; moreover, only domestic large-diameter logs realize quantity increase in double shocks; this improves China’s domestic timber supply structure, and is a good example of “opportunities in crisis” in the face of negative demand shocks.

This study aims to systematically examine the developmental attributes and trends within China’s forestry sector through the lens of a global value chain (GVC) framework. To this end, this research analyzes the Organization for Economic Co-operation and Development Inter-Country Input–Output (OECD-ICIO) database, using a cohesive set of GVC methods, including the forward decomposition of industry value-added, an assessment of industry upstream and downstream positions, the decomposition of export values, and analysis of trade competitiveness indicators. The trajectory of China’s forestry industry hinges upon the interplay between foreign demand and domestic demand. The results reveal a transition in China’s forestry sector development model from export-focused to a domestically driven approach. The proportion of value-added that is devoted to meeting domestic demands within the wood processing and papermaking industries has surged to 76% and 82%, respectively. Among the major economies, China has the highest output upstream index and input downstream index in the forestry industry, playing a vital role in propelling and pulling other industries into the global value chain system. The proportion of domestic added-value in China’s forestry industry exports ranks among the top, reflecting strong self-sufficiency in export production. Although China’s forestry industry possesses a high world market share, its overall international competitiveness is weak, especially with clear signs of weakening comparative advantages in the wood processing industry.