The half-finished apartment complex off a leafy boulevard in Shanghai’s Jinqiao district looks like any other construction site in China, except for one thing – signs proclaiming the site as a fire hazard. The warnings are the only outward indication that, unlike the vast majority of buildings in China, these apartments are being built almost entirely of wood.
Chinese builders typically eschew wood for other materials. Concrete and steel have ruled the Chinese building market since 1949, when the Communist Party began throwing up Soviet-style buildings. Building materials remained largely unchanged over the decades, despite architectural upgrades.
Canada – a growing source for wood imports to China – is hoping to change the practices of Chinese builders. But first, Canadian wood boosters, such as industry association Canada Wood, must overcome the misgivings that Chinese have about building wood-frame homes.
Chinese typically think of concrete as a sturdier and therefore better material than wood, said Derek Tang, Shanghai-based general manager of JL Genesis, a wood importer. Concrete and steel also allow for larger buildings than wood, important in a densely populated country. Changing Chinese views will have to be a gradual process, Tang said.
The lobby’s main goal is to convince Chinese builders to use wood for making the underlying frame of the house, which requires more expensive, high-grade wood. The Chinese already use low-grade wood for ancillary purposes, such as molds for concrete foundations. “Sometimes, people ask us why we focus on the wood-frame houses when most of our wood is going into building concrete houses, and that’s simply because it doesn’t need to be promoted,” said Brad Spencer of Canada Wood. “We sell pretty much all the low-grade that we can get here without promoting it.”
Even if the Chinese begin integrating just some lumber into their structures, that could have a huge impact on demand. “You’ve just scratched the surface of China in terms of wood use demand,” said Paul Quinn, a Canada-based paper and forest products analyst at RBC Capital Markets. “Even in their six-story walkups, if you could get a couple of floors out of wood instead of concrete that would be a huge incremental demand change that will have a big impact on consumption and price.”
Lifestyles of the rich
So far, progress toward cracking the China housing market has been slow. Some exporters thought they could “just turn on the switch” and Chinese would begin building with wood, but it has been far more difficult than that, said Russ Taylor, President of International Wood Markets Group.
Wood-frame houses are becoming more common in China, but they still account for only a tiny proportion of housing. Roughly 20,000 new wood-frame houses are built each year, up from 1,000-2,000 five years ago, Spencer said. But that’s miniscule compared to the roughly 4-6 million new homes built each year in China since 2006.
To convince more builders to use wood, Canada Wood touts the material as more energy efficient, environmentally friendly (trees store carbon in the process of creating lumber, while concrete and steel production only create emissions) and more stable in the event of an earthquake. Wood buildings also stand out among China’s concrete and steel developments, and that could attract potential buyers looking for something different, Spencer said. Most wood is currently used to build higher-end homes and villas for rich Chinese, often in suburban areas or at resorts.
In this respect, Chinese history works in favor of attracting buyers. In the dynastic era, only the rich could afford to live in wood homes, said Lance Tao, marketing director at Canada Wood.
Wood will likely remain a niche building material in China. If wood-frame houses capture the imagination of China’s rich, however, that could translate to broader adoption, as has been the case with high-end cars and luxury goods. In a country growing more bourgeois by the minute, wood housing could be the next coveted item for aspirational middle-class Chinese.