Fred Spoke
Canada Wood China
Email: spoke@canadawood.cn
Fred has an extensive background in China including serving as Minister Counselor (Commercial) at the Canadian Embassy in Beijing. Fred was also the Executive Director of the Canada China Business Council based in Toronto and served on CCBC's Board in Shanghai. He has also filled other overseas roles at the Department of Foreign Affairs and International Trade. In the private sector he has guided international clients in the development of their China strategies and was the General Manager for Victorinox China Ltd. (Swiss Army brand). Fred speaks mandarin Chinese and holds an MBA degree.
- Mar 15-26
Canada Wood College Designer Training Level I, Shanghai Urban Management College - Mar 15-26
Canada Wood College Designer Training Level I, Shanghai Urban Management College - Mar 29-31
The Fifth International Conference on Intelligent, Green and Energy-Efficient Building & New Technology, Beijing International Conference Center - May 1
The opening of the Vancouver Pavilion at Shanghai EXPO, Urban Best Practice Area, Puxi
China Market Update
by Fred Spoke
1. Economy
The Recovering Economy
The Chinese economy year-end numbers are in and Q4 GDP growth was 10.7%, the highest since Q1-09. 2009 GDP growth reached 8.7%, higher than most economists had predicted. 2010 growth is projected at 10.0%. With the economy recovering strongly, over-heating & inflation are becoming a concern. After being in negative territory for much of 2009, CPI inflation rose to 1.9% in December. CPI for 2010 is projected at 3-4%.
Also key to China’s rapid growth in the face of the massive global recession was its ability to mobilize investment. The investment to GDP ratio jumped to 67%, compared to 58% in 2008, as the government poured money into infrastructure. Infrastructure spending was up 44% year-over-year.
In the external market, exports after dropping sharply early in 2009 recovered to within 4% of their September’08 all-time high. Year-over-year growth reached 18% in December. Imports climbed about 1% higher than their previous peak in July’08, driven in part by higher commodity prices. It is expected that the exports/imports could accelerate sharply in the coming months. The trade balance could reach USD 234 billion in 2010, up from USD 196 billion in 2009 but still below the USD 296 billion recorded in 2008.
Exchange Rates
Housing Market
Investment in real estate increased by 16% in 2009, its slowest rate since 1999. However, in the face of low interest rates & pent-up demand, it is expected that this market will be buoyant in 2010 & housing construction to make a larger contribution to GDP growth. There is concern about a looming housing bubble and the government is considering measures for a soft landing that will dampen speculation and to make more affordable housing available as the bulk of urban citizens cannot afford housing. In Beijing, for example, a 100 square meter apartment costs close to 80 times the average annual income of its residents. The recently launched affordable housing program will rectify some of this concern.
SPF Exports to China
SPF Exports to China (MFBM) – period to –end-November inclusive
SPF Shipments (MFBM) – period to November’10 inclusive
SPF shipments to China remain strong and volume-wise exports to China significantly exceed those to Japan. Although the bulk of these shipments to China re economy and utility grade, the ration of Grade 2 or better is steadily increasing partly because of favourable pricing..
Paul Newman
Executive Director - Market Access and Trade, COFI Vancouver
Email: newman@cofi.org
Paul Newman joined Canada Wood in 2003 and prior to that worked for COFI for 12 years. He also has experience working for a forest products firm and with the Canadian banking sector. Paul is a graduate of the University of British Columbia in wood science and SFU in Business Administration. Paul is responsible for Canada Woods Asian programs. He enjoys gardening, outdoor pursuits and reading.
Giving Wood Its Due
by Paul Newman
Education and presentation of the facts about building with wood is key to changing Chinese perspectives.
Despite enormous sales potential, Chinese attitudes to wood are frequently at odds to those expressed in western countries or even other Asian markets. Elsewhere, wood is broadly accepted as a partial solution to green building challenges and carbon sequestration; however entrenched prejudices favouring other materials and institutional biases often lead Chinese to discount the potential for wood.
Objections range from standard ‘old chestnuts’ – it burns / it rots/ termites etc. to trade concerns such as ‘China itself doesn’t produce much wood therefore it is not a good option since we have to import everything’ to environmental – ‘using wood will lead to destruction of our forests’.
Recognizing that education and presentation of the facts is key to changing Chinese perspectives, Canada Wood has partnered with its counterpart European Wood to identify attitudes prevalent amongst key influencer groups and subsequent messaging that aims to demonstrate that wood is a good choice for China, both commercially and environmentally.
The project commenced with targeted focus group assessment which categorized public and private sector attitudes. Arguments based on fact were then crafted to counter key objections. The package is being rolled up in a to-be-released ‘Building with Wood’ booklet to be co-published by Canada Wood and European Wood. Available in mid-2010, ‘Building with Wood’ will provide core messaging for a hearts and minds campaign to be launched later this year.
Kevin Kostersky
Construction Specialist
Email: kostersky@canadawood.cn
Kevin has been working for Canada Wood in China as a construction specialist for the past year. He has spent a large part of the year doing training and quality control on re-roofing projects throughout Shanghai.
• Shanghai government have invested over CAD 24 billion in its urban infrastructure construction and upgrades. Before EXPO opening, Shanghai will boast a total of 420 km of metro track with 280 metro stations.
Pavilions using wood in construction at the Shanghai Expo 2010
by Kevin Kostersky
Canada Wood recently hosted a meeting for the Builders and Suppliers Club where the keynote speaker was Robert Smith, Project Manager for the Vancouver Pavilion. Robert shared many details about the design and wood components used in the pavilion
The Canadian Pavilion for the upcoming Shanghai 2010 World Expo will feature 3800m² of clear, Canadian Western Red Cedar installed in large diamond shaped panels for the exterior façade.
It is certain that an event as high profile as The World Expo will raise awareness of how wood can be used in construction to innovate architecture and urban construction. Along with our Shanghai-based business network (primarily real estate developers, building materials suppliers, architects and construction companies) we invited the building contractors for the Canada, British, Norway, Sweden and the Vancouver Pavilions. All of these pavilions use wood prominently in the construction of their spectacular structures.
The keynote speaker was Robert Smith, Project Manager for the Vancouver Pavilion. Robert shared many details about the design and wood components used in the pavilion. A short presentation was also made by Mr. Allan Yuan of Shanghai Handa Decoration Co., LTd. subcontractor in charge of the wood construction, (glue-lam structure) for the Sweden Pavilion. It was interesting to hear the Project Managers for the Vancouver, Sweden and Canada Pavilions exchange stories of the various challenges they have faced. It was also very encouraging to see that many of our regular attendees have been busily involved with the construction and supply of materials for the various pavilions being built.
Robert Burrows
Construction Specialist
Email: burrows@canadawood.cn
Robert Burrows left his home in Nanaimo to join Canada Wood China in July 2009. Rob was hired as a Construction Specialist for the Sichuan earthquake re-construction projects, and is now supporting the Quality Services team in Beijing. Rob holds a Carpentry Apprentice Certificate and has training in project management and in green building systems. Included in his thirteen-year construction career was one memorable project in Tianjin, China in 2004. Rob has since been very interested in working to develop the wood frame construction sector in China.
Inspector Training for Developers
by Robert Burrows
"Wendo Warm Wood Villas" The CW team is currently working on a site that is located approximately 95 km North East of Beijing, in Pinggu County.
Working with the developers and builders directly allows us to train the people that can affect the quality of the building and all of its components in a direct and positive way.
The goal is the establishment of an inspection/QC team that will be qualified to perform the critical inspections necessary for WFC to perform to its full capacity. We feel this is a good opportunity for Canada Wood to put this inspection system in place, until such a time that there is a fully trained and competent national inspection system developed. By working with the developer directly, as well as the builders, we will be able to train the people that can affect the quality of the building and all of its components in a direct and positive way.
The project, called Wendo Warm Wood Villas, is meant to be a weekend getaway and summer resort site. To date, there are over 30 Canadian WFC houses being built at various stages of completion, as well as 3 hybrid villas (concrete first floor, wood second floor and roof), with a total of 300 units planned to be built in the coming years. Construction of the houses is being performed by 4 different wood frame builders, giving extended reach to the program.
The training curriculum includes documentation necessary for the inspectors to perform site inspections, as well as specific training on how to perform daily inspections of the various stages of WFC. In addition, a multitude of scaled mock-ups were built to show the various details of WFC including proper window installation, flashing detail and deck sealing. The idea being to create a standardize system of construction techniques that can be applied specifically to this project. The results that we have seen so far are very encouraging and the 100% commitment of the developer and his team have made our job all the more enjoyable.
We can’t say the same for the weather though; between December and February the temperature barely rose above -5 C, while -10 to -15 was more the norm. To make matters worse, we had a record breaking snow fall that has not been seen in this part of the world for almost fifty years. It actually has become such an issue that the four building companies asked to suspend construction until after Chinese New Year, in the hopes that temperatures and conditions will become a little more tolerable. On the other hand, this lull in construction has presented Canada Wood an opportunity to affect even more concentrated training for the developers’ inspection team, while the builders are on holidays.
To bring this all together, we have a dedicated team of Canada Wood employees; both Canadian and Chinese, working alongside the developers and builders to produce the best possible wood frame buildings. Our hope is that this project will become the model for all WFC in China and that the momentum will be carried over to projects yet to come.
Brad Spencer
Construction Specialist
Canada Wood Shanghai
Email: spencer@canadawood.cn
Brad is a graduate of Simon Fraser University with a Bachelor Degree in Economics. He also obtained the McRae Institute Graduate Diploma for International Management.
Prior to joining Canada Wood, Brad spent 5 years as a Program Manager for Hockey Canada and one year as Business Development Manager for Malaysia's largest property developer (Renong).
Brad has 5 years experience as a wood frame builder in BC and Japan, with time spent working in BC's coastal forests as both a logger and a forest fire fighter.
The Next Big Opportunity in China
by Brad Spencer
The official slogan is “Better City Better Life”, and on the surface this Expo looks like the worlds largest architecture competition. Beyond the unique buildings, there is consistent messaging coming out of every pavilion about ‘sustainability’.
Consider the impact of every Chinese and international exhibit at Expo preaching the virtues of sustainability to 70 million Chinese visitors. Beyond the millions who attend the fair, sustainability messages will be repeated to hundreds of millions of Chinese television viewers on a daily basis from now until the end of October. Shanghai’s Expo is going to change the priority Chinese people place on the natural environment.
How will Expo assist our efforts to grow the market for structural lumber? Green building concepts are not new to China, but their impact to date has been marginal. Expo will be a turning point for a new generation of Chinese urban planners. In the post-Expo era, government officials and real estate developers will support more green building projects.
To take advantage of this opportunity, we need to teach urban planners that wood is in fact a green building material; an idea that is not universally accepted. People in China associate wood construction with de-forestation. The exhibits at the Vancouver pavilion, supported by public relations and promotional programs, are designed to emphasize the environmental credentials of Canadian lumber. People in China know their country’s development is damaging the environment. Expo is our opening to persuade the right people that Canadian lumber should be part of the coming movement to improve sustainable development.
In the Spotlight—New Staff Claire Sun
Anyone who’s made a phone call to Dream Home Canada (DHC) in Shanghai over the past year was most likely greeted by the welcoming voice of Receptionist Sun Zheng Ya, also known as Claire. A recent Business Administration graduate, Claire considers herself lucky to have secured her first job with FII and Canada Wood. She has excellent language skills in both English and Chinese, and she is using this opportunity to improve her business English. Claire enjoys sharing her knowledge of Chinese culture with the Canadian staff and she has some interesting insights on Chinese New Year traditions.
This is a significant year for Claire because she was born in the year of the tiger. Having the same symbol as the year’s “holy spirit guard” makes one vulnerable to misfortune. Most Chinese people who were born in the year of the tiger will take precautions. The most common defence is to wear “lucky” red items such as underwear or other accessories. Claire plans to wear a red scarf and a small red bracelet.
Claire says tigers are “generally optimisic, valiant, and aggressive” and she is not too worried about misfortune. She subscribes to the proverb顺其自然, (Shun Qi Zi Ran) which means “let it be”.
According to Claire, the most important Chinese New Year custom is not the special food, or the fire crackers, or even the red envelopes - the most important custom is quality time with family.
The next time you stop by the DHC, be sure to say hello to the girl in the red scarf.
Patrick Cooper
Canada Wood UK
Email: cooper@canadawood.cn
As a professional forester, Patrick has accumulated broad and international experience working for government, NGO and industry bodies, involved with forest management, certification and the timber trade.
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UK Market Update
by Patrick Cooper
1. Britain's economy finally clawed its way out of recession in the fourth quarter of 2009. Office for National Statistics figures show that gross domestic product expanded by 0.1% between October and December 2009, well below analysts' forecasts for growth of 0.4% after an 18-month recession that wiped out 6.0% of output. The lower-than-expected UK growth-reading added to the market's risk-averse sentiment and the pound tumbled almost a full cent against the US dollar. IHS Global Insight now expects that the UK will struggle to grow by more than 1% in 2010; though risk remains that the economy could still sink back into recession further to withdrawal of government fiscal stimulus in its need to control the nation’s debt burden.
Construction has been one of the sectors of the economy worst hit by the economic downturn, and whilst it is widely believed that the wider economy is now out of recession, the construction industry is going to have to wait for at least another 12 months. However, the construction industry is sectoral. Output of office, retail and other commercial projects has been particularly badly hit, and last year's fall of more than 26% in this sector appears likely to be followed by a further fall of 15% in 2010. At the same time, output on industrial projects, which has already fallen by more than 50% from its 2007 peak, is expected to fall still further during the next 12 months. Meanwhile, there are some positive signs. New private housebuilding, which recently fell to levels not experienced since the 1920s, has started to recover, with starts this year expected to be 15% higher than in 2009, and with similar levels of growth in each of the next three years. Though even with this growth, the number of starts in 2013 will still be only 75% of the number achieved in 2007, and only just over half the number recommended to meet housing demand.
2. UK softwood imports for the period January-October 2009 amounted to 4,128,000m³, and 16.7% below figures recorded for the same period in 2008. However, softwood import volumes during the three consecutive months August-October 2009 were equal to or greater than comparable volumes recorded for 2008. This improvement was driven by a further increase in Swedish imports to the UK, which year-on-year to October were over 4% higher than in 2008.
Current UK market prices are said not to reflect replacement costs from Baltic and other north European producers, mainly because importers are basing current selling prices on landed stocks bought in the third quarter of 2009, and also because some traders have cut their margins in the wake of fierce competition. Adverse exchange rates and the general downturn in demand have prevented UK buyers making significant commitments so-far in the first quarter of 2009.
3. BS 5268: Part 2 (the UK structural timber design code), together with all associated parts, was officially formally withdrawn by BSI in December 2009 this well ahead of the official adoption in March 2010, throughout the EU, of EN 1995-1-1 (Eurocode 5) the new Europe-wide structural timber design code. Currently the repository for official design values for Canadian structural lumber and plywood in the UK the withdrawal of BS 5268: Part 2 has necessitated the production of new technical data sheets for both; the plywood document having been in place for a number of years already. The lumber document, which incorporates the new EN strength class allocations for Canadian MSR lumber and provides information on CE-marking and associated requirements, is currently undergoing a final edit and will be ‘going live’ during February.
4. Canada Wood UK will be representing the Forest Products Association of Canada (FPAC), Quebec Wood Export Bureau (QWEB) and Western Red Cedar Export Association (WRCEA) within the embrace of the Canada Pavilion at the Ecobuild trade fair being held at Earl's Court in London during period 2-4 March 2010.
The Canada Wood office thrives on collaboration, and with FPAC, QWEB and WRCEA at the same stand there promises to be three times the attraction and three times the interest from visitors enquiring about Canadian construction and speciality softwoods, temperate hardwoods, wood flooring, energy efficient timber frame houses and paper products.
John Park
Canada Wood Director of the UK Office and Market Access Coordinator
Email: john.park@canadawooduk.org
Results of Timber Trade Federation’s ‘UK Timber Industry Certification Report
by John Park
The Timber Trade Federation’s ‘UK Timber Industry Certification Report’ revealed that certified timber made up 83.6% of all domestically produced and imported wood in 2008, a growth of 16.9% since 2005.
All wood supplied to London 2012 Olympic projects must be certified under the CSA, FSC, PEFC or SFI schemes, with full chain of custody.
Britain's economy finally clawed its way out of recession in the fourth quarter of 2009. Some experts now expect that the UK will struggle to grow by more than 1% in 2010.
New private housebuilding in Britain, which recently fell to levels not experienced since the 1920s, has started to recover, with starts this year expected to be 15% higher than in 2009, and with similar levels of growth in each of the next three years.
Timber frame construction now accounts for over 25% of all new housing in the UK.
By October 2009, softwood import volumes had been equal to or greater than 2008 volumes for the third consecutive month.
In the year January to October 2009, Sweden supplied 55% of the UK’s total softwood import requirements, up from 44% in 2008.
