Munich Personal RePEc Archive

The new kid in the forest: the impact of China's resource demand on Gabon's tropical timber value chain

Terheggen, Anne (2010): The new kid in the forest: the impact of China's resource demand on Gabon's tropical timber value chain.

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Abstract

This dissertation is anchored in the disruptive impact of China’s resource-based economic expansion over the last two decades. Whilst the country’s economic growth follows traditional patterns of development, the size of China’s population challenges the small-country assumption inherent in many macroeconomic trade models. The recent commodity boom and the seeming reversal of commodity exporting countries’ terms of trade are a result of China’s non-marginal impact of consumption. This thesis uses examples from the tropical timber industry in general and primary data from Gabon in particular to examine the impact of Chinese consumption of tropical timber forest products on a producer industry in the South. The global value chain framework is used as a method to study the likely changes in the organisation of production and trade. The research examines the possible re-direction of tropical timber trade flows away from the OECD towards China. It can be expected that the access to the Chinese market is defined over different standards, as buying decisions in traditional consumer countries vary from Chinese ones based on their stages of industrialisation and per capita incomes. The analysis also investigates whether the shift in markets leads to changes in the division of labour, the income distribution and the usage of domestic factors of production in Gabon. Additionally, the growing presence of Chinese producers in Southern resource industries has the potential to accentuate structural changes in the organisation of production, because Chinese actors’ activities are said to be concentrated in the extractive rather than the processing stages of production, often in disregard of socio-environmental consequences. Research results obtained in this dissertation, with respect to possible changes in the organisation of production and trade, plus knowledge about the impact of China’s significant consumption of natural resources on global commodity prices and the terms of trade movement, enable us to draw conclusions with respect to theoretical discussions about the role of natural resources in economic development, the implications for industrial and economic policy formulation, and the global value chain framework as a research method.

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