| 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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