China’s love affair with oak a mixed blessing for France

Chinese demand for oak products has boosted exports — and prices — from French producers. (Reuters)
Updated 08 June 2018

China’s love affair with oak a mixed blessing for France

  • Chinese demand pushes up oak log prices
  • French oak producers flourish, sawmills suffer

PARIS: Times are good for oak tree growers in France.

Exports of oak logs have soared and so have prices, largely because of demand from China. Beijing banned commercial timber harvests last year and Chinese millennials have developed a taste for high-quality wooden floors and furniture from Europe.

But boom for France’s exporters could mean bust for some of the country’s 550 sawmills.

French oak producers have traditionally sold oak logs to the mills, which then cut them into lumber for making products ranging from floors and furniture to coffins and wine barrels.

But now, private forest owners have started selling logs directly to Chinese buyers because they are ready to pay higher prices and do the processing themselves.
This has left many French sawmills short of wood to process and struggling to fulfill orders.

“The problem is that oak has never been as expensive in France and we, the processors, have never had as little of it,” David Chavot, head of the Margaritelli Fontaines sawmill, said at the mill in eastern France.

Sawmills with big stocks of oak are safe for now but will face problems buying new stock because they cannot afford the higher prices, said Nicolas Douzain-Didier, head of France’s National Forest Association (FNB).

Smaller ones will lose customers and shed jobs, he said.

“The most fragile will go under, one after another,” Douzain-Didier told Reuters.

About 26,000 jobs are directly linked to the oak industry in France, the world’s third largest producer. By late March, about 80 percent of French sawmills had 30 percent less stock than they needed to fulfill orders.

Any job losses would be politically awkward for President Emmanuel Macron, who has made reducing unemployment a priority. The sawmill producers have appealed to him for help but a crisis meeting organized by France’s farm minister with producers and sawmill bosses in March failed to secure a compromise.

France has tried to regulate the industry by imposing an “EU label” on logs coming from public forests, meaning they must be processed in the European Union. But French sawmills say there are ways to bypass the EU label system and want a similar label applied to privately owned forests, which account for nearly 80 percent of wooded areas in France.

For oak growers, who usually cut trees when they are from 100 to 150 years old, the price rise is a welcome rebound after a sharp fall in the late 2000s caused by low demand.
“They (the sawmills) need to live but so do we,” said Antoine d’Amecourt, who led the private forest owners who attended the March meeting with farm minister Stéphane Travert.

“Owners prefer the wood to be processed in France but they need to regenerate forests for the next generations,” he said, explaining it made little difference where the oak is processed.

China is the world’s largest timber importer and its needs are growing, according to Chinese officials.

To meet the booming demand, Chinese manufacturers have had to buy oak abroad since commercial timber harvests were banned to protect natural forests after decades of over-cutting.

In Foshan, a furniture trading hub in China’s Guangdong province, traders say demand is propped up by young and affluent people who like European interior design.
Almost 90 percent of solid composite wooden floors in China are now made of oak, a sharp rise from the early 2000s, according to Chinese floor-maker Fudeli Flooring
“At least 70 percent of our customers buying French oak floors are millennials born in the 80s and 90s,” said Chen Deyi, a local dealer for Fudeli Flooring.

At the Louvre, a vast and lavish furniture exhibition center in Foshan, customers can find luxury brands such as Versace and Bentley Home. For many, prices are not the biggest concern.

“I don’t have a particular budget in mind but I feel prices are okay here,” said newly wed Liu Zhipeng, who works for an insurance company.

Hoping to cash in on the high demand, Hong Kong-based Four Seasons Furniture has launched a French oak furniture collection. A small side table made of French white oak costs 3,680 yuan ($576).

“We just recently started promoting French oak furniture inside China. It used to be more export-focused as appreciation for this type of wood was not as robust,” said Candy Zhu, a sales manager at the Louvre exhibition center.

French oak log exports to China rose 35 percent in the year to January 2018 and now account for 70 percent of all French oak log exports, according to FNB data.
This makes France the second largest supplier of oak logs to China, ahead of Russia and behind the United States. Business is not expected to be affected by the current trade dispute between Washington and Beijing, industry experts say.

Prices for some oak logs have doubled in France since 2009 while the prices of other species, such as beech and pine, have fallen over the same period, according to FNB data.

New Zealand to conduct own assessment of Huawei equipment risk

Updated 18 February 2019

New Zealand to conduct own assessment of Huawei equipment risk

  • Huawei faces intense scrutiny in the West over its relationship with the Chinese government
  • Several Western countries had restricted Huawei’s access to their markets

WELLINGTON: New Zealand will independently assess the risk of using China’s Huawei Technologies in 5G networks, Prime Minister Jacinda Ardern said on Monday after a report suggested that British precautions could be used by other nations.
Huawei, the world’s biggest producer of telecoms equipment, faces intense scrutiny in the West over its relationship with the Chinese government and US-led allegations that its equipment could be used by Beijing for spying.
No evidence has been produced publicly and the firm has repeatedly denied the allegations, which have led several Western countries to restrict Huawei’s access to their markets.
The Financial Times reported on Sunday that the British government had decided it can mitigate the risks arising from the use of Huawei equipment in 5G networks. It said Britain’s conclusion would “carry great weight” with European leaders and other nations could use similar precautions.
New Zealand’s intelligence agency in November rejected an initial request from telecommunications services provider Spark to use 5G equipment provided by Huawei.
At the time, the Government Communications Security Bureau (GCSB) gave Spark options to mitigate national security concerns over the use of Huawei equipment, Ardern said on Monday.
“The ball is now in their court,” she told a weekly news conference.
Ardern said New Zealand, which is a member of the Five Eyes intelligence sharing network that includes the United Kingdom and the United States, would conduct its own assessment.
“I would expect the GCSB to apply with our legislation and our own security assessments. It is fair to say Five Eyes, of course, share information but we make our own independent decisions,” she said.
Huawei New Zealand did not immediately respond to a request for comment. Spark said it was in discussions with GCSB officials.
“We are working through what possible mitigations we might be able to provide to address the concerns raised by the GCSB and have not yet made any decision on whether or when we should submit a revised proposal to GCSB,” Spark spokesman Andrew Pirie said in an emailed statement.
The Huawei decision, along with the government’s tougher stance on China’s growing influence in the Pacific, has some politicians and foreign policy analysts worried about potential strained ties with a key trading partner.
Ardern’s planned first visit to Beijing has faced scheduling issues, and China last week postponed a major tourism campaign in New Zealand days before its launch.
Ardern said her government’s relationship with China was strong despite some complex issues.
“Visits are not a measure of the health of a relationship they are only one small part of it,” she said, adding that trade and tourism ties remained strong.