Study On The Industrial Chain Optimization Of Chinese Wood Processing Industry

The advantageous initial endowments and export-oriented industrialization strategy create the rapid development of China's wood processing industry and China'has become a large forest products processing country in the past short time. However, China is still not a real Forestry Power. There exist many problems in China's wood processing industry. We lag a large gap behind compared with developed countries. Meanwhile, China's wood processing industry which relies on the comparative advantage is facing such a predicament:On one hand, we face competition from Brazil, Chile, Southeast Asia, Indonesia and other countries which are more competitive in labor-intensive economies with their cheaper labor and other primary elements (such as rent, forest resources, etc.). As Chinese labor costs are rising constantly, and China's industrial upgrading snails ahead, not only it is difficult for it to achieve sustainable export earnings, but also it will fall into the "Immiserizing Growth" if we continue to lay our competitive advantage on the primary factors. The other hand, if we continue to pose China's wood processing industry in specialized production of labor-intensive products, it is easy for us to be captured in the global value chain by the advanced forestry enterprise from developed countries which take the "high-end" road, and we will be locked at the low end of the industrial chain, only maintaining the extensive growth mode for long.In the present western mainstream economics, there is no specific theory to explore how the less developed countries like ours learn the technology and create their own brand and carry out the industrial upgrading. Development economics from the macro points out the possibility of less developed countries catching up with developed countries through learning mechanism, however, it cannot specifically explain how the individual industries or individual enterprises develop in the micro-level. We need to present a new theory, specifying the path of further development of China's wood processing industry. This paper attempts to seek survival and development space for Chinese wood-proccessing enterprises and the wood processing industry, through the theoretical study of and industrial chain and the optimization of the the industrial chain of Chinese wood processing industry.Through the analysis of the industrial chain, we find that our local wood processing enterprises are at the low end of the global industrial chain. "No-profit-busyness" is a vivid portrayal of this situation. Under the multinational corporations'horizontal and vertical exploitation, the living space of local enterprises becomes increasingly smaller, and the key technologies and core brand are still firmly grasped in multinational hands. In this context, the optimization of the wood processing industry is required in order to seek survival and development space for the local enterprises. In analyzing the optimization of the industrial chain of the wood processing industry, we must first probe into enterprise's independent innovation in micro-enterprise level, shifting from the lower value-added production processes to the higher value-added links of R&D and brand marketing. However, the discussion on the enterprise level only can not fully make us grasp the optimization mechanism of the industrial chain of wood processing industry, because the industrial chain optimization requires not only the efforts of individual enterprises, but also needs the co-ordination and support of industrial policy and national departments, as well as other industrial chain organizations and individuals, so as to restructure the whole industry and the whole industrial chain. Therefore, according to the principle of industrial chain optimization, vertical optimization, horizontal optimization and hybrid optimization of the industrial chain of China's wood processing industry are to be accomplished. The vertical optimization includes:the optimization of industrial chain between Chinese enterprises and the exporting country of raw materials; the optimization of industrial chain between corporate and forest-farmers; the self-optimization of enterprises (whether to raise the technical level or to create brand); the optimization of production enterprises and sales enterprises. Horizontal optimization include:coordinating the relationship between business and government, and the optimization of forestry service system. The hybrid optimization of the industrial chain mainly refers to the optimization of wood processing industry cluster. Based on the optimization content above, a game model for Chinese enterprises and raw materials exporters, a game model for forest farmers and enterprises, the industrial chain optimization model based on brand innovation, a balance model for sales channels control, a distribution model of entrepreneurship, a model for the development of service industries and efficiency of manufacturing, as well a model of industrial chain effect, are established in this paper to obtain seven main conclusions and recommendations, namely, (1) Chinese enterprises should be encouraged to go abroad to compete for resources control. (2) The forestry enterprise brand building and the brand awareness should be enhanced. (3) The downstream of the industrial chain of wood processing industry should be actively developed and broadened. (4) The government functions should be transformed to reduce unnecessary intervention in the economy. (5) The construction of forestry service system should be strengthened. (6) The industrial chain controlled by the core corporate in the forestry industry cluster should be built.