For a one time communist country Russia is quick off the mark in seeing a business opportunity. Since 2008 the amount of Russian sawnwood imported through the Chinese port of Manzhouli have been on the rise. Indeed the amount of sawnwood that is landed has been steadily on the increase, to such an extent that the traditional landed timber, logs, now accounts for half the imported timber with sawnwood making the other half.
So what have caused this increase in sawnwood? The answer is simple the Russian government has dramatically reduced the amount of export tax as incentive to exporters. Why ? because the newly, in relative terms, capitalist Russian government saw that log production in Inner Mongolia and and China’s Northeast has been stopped creating a gap in the market. The result is an old fashioned demand and supply situation.
Now that really keeping one eye on the ball!