A report from an environmental group says China's growing demand for wood pulp is both a blessing and a curse. The group says China is saving space in foreign landfills by importing millions of tons of wastepaper a year, mainly from the United States, Japan and Europe, and recycling it into packaging and other paper products. But China's demand for virgin wood is also on the rise, and is fueling illegal logging and deforestation. Daniel Schearf reports from Beijing.

Worker clears land for replanting of forest for Jakarta-based paper and lumber company APP, in Changxian County (file photo)

An environmental group says that in 2006, China saved 54 million metric tons of trees from being chopped down for pulp, by buying used paper in the West and Japan and recycling it for domestic use and export.

Another environmental group says that in 2006, China imported thousands of cubic meters of endangered tropical hardwoods from Papua New Guinea and Indonesia to make into furniture for western markets. A recent report says Chinese importers often turn a blind eye to, or collude with, suspected illegal or unsustainable logging operations.

Little good environmental news ever comes out of China. Most of the world's most polluted cities are located here. Most of the country's waterways are fouled with human, industrial and agricultural waste.

But China, as it turns out, is both a hero and a villain when it comes to the world's trees.

The Washington-based environmental group Forest Trends said in a recent report that China's imports of wastepaper between 2002 and 2006 prevented 65 million metric tons of used paper from being dumped in western landfills.

Brian Stafford is the author of the report and a paper industry expert. He says China is the largest recycler of wastepaper in the world - and not because Chinese companies want to save trees. He says it just makes economic sense.

"As a very large and rapidly expanding light manufacturing producer, it has a great need for packaging materials with which to package that output to export it to the rest of the world," he said. "Because it doesn't have a large, wood-based forest industry itself...in order to get very rapidly into the business of manufacturing packaging, paper, and board, it has imported vast quantities."

In the last decade, China's wastepaper imports have increased five-fold, now accounting for more than a third of the country's wood fiber supply, and imports are growing by 30 percent a year.

Chinese recycling companies turn the wastepaper into corrugated and cardboard boxes for shipping Chinese-made goods back to western nations. Other recycled paper products are exported.

Stafford says since 1990, China has accounted for half the world's growth in paper and paperboard production.

"We have seen the Chinese pulp and paper industry grow from being really quite small, relatively insignificant in world terms, to being the second largest in the world, second only to the United States," he said. "So it is now an enormously significant user of forest resources. Of course, if this rapid rate of growth continues, then it is bound to exert pressure on forest resources in the region."

That is precisely what is happening. China's demand for higher quality products made from virgin wood, as opposed to wastepaper, has also been growing.

One third of China's wood pulp imports come from Indonesia and Russia, where, the Forest Trends report says, forest management is poor and illegal logging common.

The environmental group Greenpeace says Chinese companies importing endangered hardwoods from countries like Papua New Guinea and Indonesia have forged documents, and smuggled in logs whose shape has been altered to skirt laws banning their export. Greenpeace says that logs are squared off and falsely labeled as "sawed timber," which can legally be exported.

Environmental groups are calling on Chinese wood importers and manufacturers to track the origin of products through the Forest Stewardship Council, a private, Germany-based group that promotes sustainable forest management.

Tamara Stark is the forest expert for Greenpeace, China. She says there are about 200,000 Chinese importers and manufacturers of pulp and wood, but only about 300 are certified by the council.

"It's not as widespread as it needs to be. So, unless you actually are a company that (is) instituting FSC tracking of your timber supply, you couldn't guarantee that you're actually buying a product that comes from an ecologically responsible operation, or even one that comes from a legal operation," she said.

Stark says in Indonesia, where China gets much of its wood products, illegal and unsustainable logging threatens to wipe out lowland tropical rain forests within the next 10 years.

Rain forests are home to countless wildlife species, and absorb large amounts of carbon dioxide, which is suspected as a major cause of global warming.

The Forest Trend report says China has built two new large mills for producing wood pulp without arranging adequate sources of local wood, ensuring that pressure on foreign forests will continue.