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A Case Study of Small and Medium Forest Enterprise Development in Zhejiang Province

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A Case Study of Small and Medium Forest Enterprise Development in Zhejiang Province FOREST CONNECT CHINA A case study of small and medium forest enterprise development in Zhejiang Province A9RC17A.pdf 1 20/09/2010 14.22.52 FOREST CONNECT CHINA A case study of small and medium forest enterprise development in Zhejiang Province Xinjian Luo Xuan Liu C Lanying Lin M Zhang Xiaoli Y CM Li Yu MY CY CMY K FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS Rome, 2010 A9RC17C.pdf 1 20/09/2010 14.23.52 For further information, please contact: Ms Sophie Grouwels Forestry Department, Food and Agriculture Organization of the United Nations (FAO) Telephone: (39) 06 570 55299 E-mail: [email protected] Ms Qiang Ma Forestry Department, Food and Agriculture Organization of the United Nations (FAO) Telephone: (39) 06 570 55011 E-mail: [email protected] FAO Forest Connect website: http://www.fao.org/forestry/enterprises/forestconnect/en/ C M Y CM MY CY CMY The designations employed and the presentation of material in this information product do not imply the K expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO in preference to others of a similar nature that are not mentioned. The views expressed in this information product are those of the author(s) and do not necessarily reflect the views of FAO. All rights reserved. FAO encourages the reproduction and dissemination of material in this information product. Non-commercial uses will be authorized free of charge, upon request. Reproduction for resale or other commercial purposes, including educational purposes, may incur fees. Applications for permission to reproduce or disseminate FAO copyright materials, and all queries concerning rights and licences, should be addressed by e-mail to [email protected] or to the Chief, Publishing Policy and Support Branch, Office of Knowledge Exchange, Research and Extension, FAO, Viale delle Terme di Caracalla, 00153 Rome, Italy or by e-mail to [email protected]. © FAO 2010 Acknowledgments The authors wish to thank the Department for Planning and Development of the State Forestry Administration, Zhejiang Forestry Department, Zhejiang Forestry Association, the Forestry Bureau of Huzhou City, the Forestry Bureau of Anji County, the Forestry Bureau of DeQing County and the Forestry Office of Nanxun District for their collaboration during the ten-day survey mission in Zhejiang Province. Special thanks also go to the district staff and collectors who shared their valuable time and information. The team received excellent support and assistance from Dr He of Zhejiang Academy of Forestry, Mr Dong of the Anji Bamboo Association, Ms Zhang of the HuZhou City Forestry Bureau, Ms Liu of the DeQing County Forestry Bureau, Mr Zhang of the Jiashan Plywood Association and Mr Gao of the Jiashan Agriculture and Forestry Bureau. Thanks additionally go to Ms Qiang Ma and Ms Sophie Grouwels from FAO, for providing the opportunity to more deeply research small and medium forest enterprises in Zhejiang Province. iii Table of Contents Acknowledgments ...................................................................................................................................................iii Acronyms.................................................................................................................................................................. v 1. Background .......................................................................................................................................................... 1 Forest industry in Zhejiang ................................................................................................................................ 2 Conditions for the development of the forest industry in Zhejiang ................................................................... 5 Small and medium forest enterprises in Zhejiang.............................................................................................. 6 2. Objective and method.......................................................................................................................................... 8 Objective............................................................................................................................................................ 8 Method............................................................................................................................................................... 8 3. Survey results and analysis ................................................................................................................................. 9 Survey sites........................................................................................................................................................ 9 Results.............................................................................................................................................................. 12 4. Conclusions and recommendations .................................................................................................................. 20 Challenges and major problems facing SMEs ................................................................................................. 20 Recommendations for the development of SMFEs ......................................................................................... 23 Annex ...................................................................................................................................................................... 25 References............................................................................................................................................................... 26 iv Acronyms GDP Gross domestic product ISO International Organization for Standardization OEM Original Equipment/Entrusted Manufacture R&D Research and development SME Small and medium enterprise SMFE Small and medium forest enterprise v 1. Background Zhejiang Province is located in the south wing of Yangtze Delta, on China’s southeast coast, with the East China Sea to its east, Fujian Province to the south, Jiangxi and Anhui provinces to the west, and Shanghai and Jiangsu Province to the north. It is one of China’s smallest provinces, with a land area of 101 800 km2 accounting for 1.06 percent of the country’s total area. The three provinces of Zhejiang, Shanghai and Jiangsu form the Yangtze Delta Economic Circle (Figure 1), China’s most economically developed region, where the potential for additional development is greatest. This region has been a leader in the fostering of a private economy since the outset of China’s economic reform, and is highly competitive in the domestic processing and manufacturing market. Figure 1. Provinces of the Yangtze Delta Economic Circle Jiangsu Shanghai Zhejiang As shown in Table 1, in 2008 the gross domestic product (GDP) of Jiangsu Province was 3 trillion yuan, the third highest amongst China’s provinces; Zhejiang Province came in fourth with 2.1 trillion yuan; and Shanghai seventh with 1.3 trillion yuan. The Yangtze Delta Economic Circle covers a total area of nearly 205 800 km2, or 2 percent of the whole country. The region’s 136 million people accounts for 10 percent of China’s total population. Its total output value of 6.5 trillion yuan contributes 20 percent of GDP; and its exports in 2006 accounted for 40 percent of the country’s total GDP. The high degree of economic development in the Yangtze Delta has provided a driving force and space for Zhejiang’s economic development. 1 Table 1. Economic performance of the Yangtze Delta Economic Circle GDP Ranking among Area Population Province (trillion China’s (km2) yuan) provinces Jiangsu 300.24 3 100 000 73 810 000 Zhejiang 211.07 4 100 000 46 470 000 Shanghai 130.80 7 5 800 16 250 000 Owing to its resources and environment, Zhejiang is known as “seven mountain, one water and two land”. Mountains and hills account for 70.4 percent of its total area, plains and basins for 23.2 percent, and rivers and lakes for 6.4 percent. The cultivated area is only 2.0817 million ha. Forest land covers 6 688 600 ha, accounting for one-thirtieth of China’s total, while wood storage of 205 million m3 accounts for only one-sixtieth of the national total. Zhejiang is therefore regarded as having few resource endowments. However, its development of a functioning forest ecosystem, comparatively robust and advanced forest industry and forest cover of 60.5 percent make it a good province in which to study the development of forest industries. Forest industry in Zhejiang Zhejiang’s socio-economic, environmental and geographic situation has allowed it to achieve rapid growth in the forest industry. In 2008, the output value of forestry was 145.622 billion yuan, with an annual growth rate of 6.06 percent. Of this total, primary industry accounted for 41.183 billion yuan, or 28.28 percent, having increased by 5.6 percent; secondary industry for 74.303 billion yuan, or 51.02 percent, having increased by 4.6 percent; and tertiary industry for 30.135 billion yuan, or 20.70 percent, having increased by 11 percent. Figure 2 shows the output values of forestry in recent years, and the
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