In March 2021, China's PMI index rose to 51.9%, the domestic economic recovery momentum accelerated, domestic and foreign demand picked up, driving the corresponding growth of production. With the support of the overall recovery of the macro environment, the wood production and manufacturing industry has a strong recovery momentum this month, with the rapid growth of domestic and foreign orders, active production and operation, leading to the recovery of employment, and the price of raw materials continues to rise. The GGSC-CN comprehensive index for March registered 71.9% (70.7% for last March and 63.7% for March 2019), an increase of 34.4 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 Apr 2020 to March 2021

Challenges

Ø The roads around the factory are uneven, muddy and rotten, and the delivery customers ask for higher delivery fees.

Ø The price of raw materials generally increased by 20%.

Ø Due to the impact of COVID-19, raw materials rose too much and some materials could not be supplied in time

Products in short supply

Ø Birch, Black Walnut Board, Teak Board, Ebony, Pine Core Board, Dough, Okan

Commodity of which the price has been increased

Ø Tang, Okan, Oak, Birch, Red Oak, Locust, Teak, Black Walnut, Ebony, Pine Core Board, Oak, Longan, Dough, Glue, Paint, PE Film, Carton, EPE Decorative,Base Paper, Melamine, Formaldehyde, Methanol

Commodity of which the price has been decreased

NONE

As for the GGSC-CN index, in March2021, four out of five sub-indexes of GGSC-CN index rose and one fall.

The production index registered 81.3%, an increase of 47.9 percentage points from the previous month. It shows that the production of superior forest products enterprises represented by GGSC CN is better than that of last month.

The new order index registered 87.5%, an increase of 62.5 percentage points from the previous month, reflecting the ability of enterprises to obtain orders is much better than that of last month. Among them, the new export order index reflecting international trade registered 68.8%, an increase of 20.8 percentage points from the previous month,, showing that orders from abroad this monthis increased inMarchfrom last month.

The main raw material inventory index registered 62.5%, an increase of 20.8 percentage points from the previous month. It shows that the raw material inventory of the superior forest products enterprisesis increased inMarchfrom last month.

The employment index registered 62.5%, an increase of 20.8 percentage points from the previous month. It shows that the employment of the superior forest products enterprises is increased inMarchfrom last month.

The supplier delivery time index was 43.8%, a decrease of 6.3 percentage points from the previous month. It indicates that the supply time of raw material suppliers of the superior forest product enterprises is slower than that of last month.