In December 2020, with the epidemic situation continuing, the domestic market demand rose steadily, and the production and operation activities of manufacturing enterprises kept growing. The purchasing manager index (PMI) of China's manufacturing industry is 51.9%, which is 0.2 percentage point lower than that of the previous month, and have run at 51% or above for six consecutive months. The economic recovery momentum is steady and progressive.In December, the wood production and manufacturing industry continued to expand, domestic demand continued to recover, and production maintained a relatively positive growth. However, the price of raw materials rose, the inventory of raw materials decreased, and the export remained weak. The GGSC-CN comprehensive index for December registered 52.0%(55.6% for last December and 55.2% for December 2018), an decrease of 1.3 percentage points from the previous month. It shows that the operation of the superior forest products enterprises represented by GGSC-CN index expand from last month. See Figure 1 for more details.

                                             Figure 1 GGSC-CN index trend from January 2020 to  December 2020

 Challenges

Ø Affected by the epidemic situation and environmental protection management, the profit margin of raw material processing plant is reduced and the output is reduced

Ø Imported containers are in short supply and difficult to obtain.

Ø The prices of raw materials generally rise.

 Products in short supply

 Thermo Wood,Black locust, Teak, Oak bark,

 Commodity of which the price has been increased

Oak veneer,Teak, Formaldehyde, Urea, Taun, Dahoma,

 Commodity of which the price has been decreased

None

As for the GGSC-CN index, in December 2020, one out of five sub-indexes of GGSC-CN index rose, two flat and two fall.

The production index registered 50.0%, same as the previous month. It shows that the production of superior forest products enterprises represented by GGSC CN has been almost same as last month.

The new order index registered 60.0%, an increase of 1.67 percentage points from the previous month, reflecting the ability of enterprises to obtain orders is better than that of last month. Among them, the new export order index reflecting international trade registered 40.0%, a decrease of 1.7 percentage points from the previous month,, showing that orders from abroad this monthis decreased inDecemberfrom last month.

The main raw material inventory index registered 40.0%, a decrease of 1.67 percentage points from the previous month. It shows that the raw material inventory of the superior forest products enterprisesis decreased inDecemberfrom last month.

The employment index registered 50.0%, an decrease of 8.3 percentage points from the previous month. It shows that the employment of the superior forest products enterprises is almost same as last month.

The supplier delivery time index was 50.0%, same as the previous month. It indicates that the supply time of raw material suppliers of the superior forest product enterprises is almost same as last month.