China's accession to the World Trade Organization (WTO) will protect the country's forest reserve but it will also deal a blow to the domestic manufacturer of artificial boards, industry experts say.

According to the country's agreement with other WTO members, import tariffs on wood products will be cut from the original 15 to 20 per cent to an average of 2 to 3 per cent by 2004.

"Timber imports will continue to rise after China entered the WTO," said Jia Qian, an official with the State Forestry Administration.

It is necessary for China, a country short on forests, to import a large amount of timber and wood products in the next 10 years or even longer, Jia said.

The government has been working to protect natural forests since 1998, causing timber volume to drop to 40 million cubic metres per year from 70 million. This leaves a shortage in the domestic market of about 60 million cubic metres every year.

Increasing timber imports will help ease the shortage and stabilize timber prices on the domestic market, Jia said.

It will also help prevent exploitation of the country's natural forests and improve the environment.

Tariffs on log and processed timber have already been eliminated since last year to encourage timber imports. The country imported a total 1.85 million cubic metres of log and processed timber in the first 11 months of last year, according to Customs statistics.

The tariff rate on artificial boards including fiberboard and scaleboard remained relatively high before China's entry into the WTO, in a bid to protect domestic manufacturers.

But the country has promised that import tariffs on fiberboard will be cut from 12 per cent to 18 per cent to 8 per cent to 13.8 per cent this year and even further to 4 per cent to 7.5 per cent by 2004. Scaleboard tariffs will be cut from 15 per cent to 10.6 per cent to 12 per cent this year and to 4 per cent to 10 per cent by 2004.

"The increase in imports of artificial boards will bring great challenges to domestic enterprises. They are likely to go bankrupt if they fail to improve product quality and lower production costs in a short period," Jia said.

The equipment and techniques of the domestic artificial board industry is just reaching the levels that developed countries saw in the 1980s.

Small scale and duplication of similar projects also hinder the development of the industry, where enterprises have an annual output under 10,000 cubic metres each account for 80 per cent of the total artificial board companies.

Artificial board manufacturing has been developing rapidly in recent years, but a shortage of raw materials has become a big problem.

Finding timber resources in the international market will help solve the problem, experts said.