Since 2000 and the implementation of China’s ‘going abroad’ policy, mainland Chinese state-owned and private companies have significantly increased their interests in the resources and investment opportunities of the Congo Basin, bringing new opportunities as well as potential social and environmental costs. This report is a synthesis of some main findings of preliminary scoping studies conducted by CIFOR and partners in Cameroon, Democratic Republic of Congo and Gabon. It focuses on how Chinese trade and investment in the forestry, mining and agricultural sectors might relate to effects on forests and forest-dependent communities in the region. All studies were conducted under the CIFOR project ‘Chinese trade and investment in Africa: Assessing and governing trade-offs to national economies, local livelihoods and forest ecosystems’, initiated in 2010. The scoping studies yielded useful results, including an increased understanding of the main trends in natural resources trade between the target countries and China, and the major land-based productive sectors targeted by Chinese investors. The studies also considered the role of national agencies tasked with promoting investment and overseeing corporate adherence to environmental and social requirements, and provided a better understanding of the informal processes surrounding investment and acquisition of land and other resources.

China’s demand for timber has increased dramatically over the past 20 years; today more than 90% of Mozambican timber exports are destined for China. Demand for forest products present both opportunities and challenges for Mozambique. As the country’s sixth largest export, timber represents one of the most important industries and sources of income, yet the intensified search for resources puts pressure on the sustainable management of the forests. In an attempt to generate greater domestic value-added and employment through local processing of roundwood an export ban on first-class timber in the form of logs has been put in place. The effect of this ban on processing activity is however debatable. The share of illegal activity in the timber industry is estimated to be large. Integrating these illegal activities into the formal economy could generate significant revenues for the government in the form of taxation, as well as greater control and oversight of logging activities than what is currently possible. Through the research project titled “Chinese Trade and Investment in Africa: Assessing and Governing Trade-Offs to National Economies, Local Livelihoods and Forest Ecosystems” CIFOR wishes to gain a better understanding of the impact increased demand and investment from China have on the Miombo forests. This report forms part of the case study on Mozambique, and is intended to give an overview of the domestic value chain and the companies operating in the timber industry, based on data collected through field research on the timber activities in the province of Cabo Delgado in northern Mozambique.