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New rules for regulation of markets and processing in China

2002.08.06


Regulation of Markets and Processing

A notice on "Rectifying and Regulating the Enterprises of Timber Trade and Processing" was jointly issued by the State Forestry Administration, the State Economic and Trade Commission, the Ministry of Agriculture and the State Administration of Industry and Commerce. This new regulation is aimed at cracking down on illegal activities in the timber processing and harvesting sector to halt the destruction of forest resources and to bring consumption of forest resources under control. It is also aimed at trying to make the distribution of productive capacity more evenly distributed. The " Notice" stipulates that all enterprises and individuals engaged in the timber trade or in processing are required to cooperate regardless of whether they are located in cities, villages, and regardless of the nature of the industry, the production scale or ownership.

The Chinese Government will focus on checking the legality of production and trade and will supervise enterprises to stamp out any malpractice.

Specifically mentioned is the intention to close down any industry dealing in illegal timber.

In addition the Government will standardize the process for examination and approval of timber trade and processing unit licenses. During the initial period implementation of the new regulation, new or expanded timber enterprises which annually consume more than 50,000 cubic metres of logs per year should get approval from the department of forestry at provincial level.

The department will not approve the establishment of any timber trade or processing enterprise which does not show evidence of an adequate supply of raw material to match the scale of processing. For those enterprises under currently under construction the problem of raw material availability must be solved or the raw material base, matching the processing scale, must be confirmed and approved before start up.

If timber enterprises are set up to use key state-owned forests identified by the State Council, then they should report to the forestry administration department of the State Council to get approval.



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