Africa’s Largest Investor
An African commodities boom is in full swing, stimulated greatly by Chinese market demand and growing Chinese investment in Africa’s forests and timber. Africans want to be better informed about Chinese investments in their forests, and how stronger China-Africa dialogue could help ensure good management of forests and wildlife management.
China’s relationship with Africa is deepening. It has become Africa’s biggest trading partner – over the past decade African trade with China has risen from (US) $11 billion to $166 billion. Investments by Chinese state-owned and private enterprise, mostly in natural resource sectors, are increasing year on year.
Many of these investments are in forested or woodland areas, some are directly in forest management and logging enterprises, and many others use timber and other forest products. Logs and lumber from Africa don’t yet make up a large proportion of China’s forest product imports – currently about 4% with a value of US$1.3 billion, according to Chinese government statistics. But this Chinese market is huge and set to grow. In 2011, China imported 145 million cubic meters of wood, worth around US$33 billion. So, for countries like Mozambique, Republic of Congo and Cameroon, which have large tracts of forests and for whom China is their largest market, this is very significant.
But compared to the investments sourced from other countries, many Africans feel they lack information about Chinese investments in their countries. In a survey carried out by African partners working with IIED, due to be published in June, a majority of African forest sector researchers and policy opinion formers in eight countries said that they were much less well informed about Chinese forest-linked investments than about those of other countries.
One reason for this limited understanding is that there are only a small number of large Chinese forestry concessions and investments and these are confined to only a few countries (Gabon, Ghana, Republic of Congo and Cameroon). A much larger number of smaller Chinese-backed independent enterprises operate informally and generally invisibly as loggers, lumber producers or timber buyers.
In Mozambique, for example, it is estimated that some 90% of timber exported is destined for China, and all of this is produced and bought by small enterprises. In the Democratic Republic of Congo (DRC), there are no official Chinese-owned forestry concessions but an apparently increasing share of the 4 million cubic metres of timber currently produced each year under artisanal permits is being bought by informal Chinese timber traders.
Improved understanding of the China-Africa relationship and its potential impacts is clearly needed.
Some good connections do already exist:
- the Chinese State Forestry Administration (SFA) has had a number of useful exchanges with African government agencies on forestry and on desertification summarised here
- the World Wide Fund for Nature (WWF) and the International Union for the Conservation of Nature (IUCN) have also facilitated exchanges involving Chinese companies and investors.
Several organizations have published useful research on forest-based trade and investment between Africa and China, including IUCN’s scoping study of the China-Africa timber trade, Forest Trends’ report on the trade in forest products, the Center for International Forest Research (CIFOR)’s research on trade and investment in China in collaboration with the World Agroforestry Center (ICRAF), which also suggests that most timber imports to China from Africa are done by a relatively small number of geographically clustered firms.
But more research and dialogue is needed to develop a shared understanding of how investments can support good forest management and a sustainable forest product trade between Africa and China.
Building greater understanding among forest governance researchers and opinion formers on both sides of the Africa-China relationship was the aim of an early-March meeting held in China and facilitated by IIED’s Forest Governance Learning Group to initiate a China-Africa Forest Governance Learning Platform. Some 15 African forest governance players – from Cameroon, Uganda, DRC, Republic of Congo, Tanzania, Malawi, Mozambique and South Africa – travelled to Beijing to join representatives from the Chinese Academy of Forestry, the Global Environmental Institute, IIED and some other international organisations, with support from the European Commission and the UK Department for International Development.
Chinese colleagues were keen to explore how progress made in Chinese forestry in areas such as tenure reform for household and community-managed forestry and industrial forestry and timber processing methods, might be brought to bear in Africa.
Chinese forest officials, researchers and civil society were also eager to test out ways to improve the environmental and social responsibility of Chinese companies. The application of official Guidelines on Sustainable Overseas Forests Management and Utilization by Chinese Enterprises jointly issued by the Chinese State Forestry Administration (SFA) and the Chinese Ministry of Commerce was identified as one way to do this.
The Platform event concluded that there is huge potential – through research, dialogue and joint action – to contribute to improving forest governance in China and Africa. There is clearly work to be done to improve compliance with African laws protecting forests and local benefits, and there is great potential to contribute to efforts in developing a timber legality verification programme.
Efforts are underway to raise people’s awareness of the Guidelines and to have them implemented effectively in Africa. Before convening again in Africa later this year, participants in the Platform will support this work and explore how it can stimulate stronger monitoring and regulatory frameworks.
It might seem like a small step, but when small changes are made in big systems, or big markets, they can have great effects.