The door opens wide for Chinese furniture.

In the mid-1990s, a NAFTA-charged Canadian woodworking industry wrestled the crown from the Taiwanese to become the USA's top source of furniture imports. Now, as we brace for the first double-zero decade of a new millennium, it looks like the reigning champ will face its stiffest challenge from the ex-champ's main political nemesis - China.

Between 1989, the year of the violent crackdown on human rights demonstrators in Tiananmen square, and 1997, U.S. imports of Chinese wood and upholstered furniture, plus wood furniture parts made in China, increased by 840%. During that same nine-year period, this mind-boggling growth propelled China from eighth to second place in the U.S. furniture import standings as China's share of the U.S. furniture import market increased from 3% to 15%.

Judging from the third-quarter figures for 1998 recently released by the U.S. Department of Commerce, furniture and parts imported from the world's most populated nation were on pace to easily exceed $1 billion. Barring a reversal of U.S. policy that rewards China with Most Favored Nation trade status, furniture imports by the United States are likely to continue increasing for years to come.

As the article in this issue, "China Emerges as Major Furniture Player," page 57, tells us, China's new political regime is bent on boosting its industrial base, especially by welcoming joint ventures with foreign enterprises. The communist nation's new open-door policy has also led to the establishment of woodworking machinery shows that have attracted exhibitor participation from around the world. The increased use of global technology enhances China's furniture manufacturing prowess, already benefiting from a plentiful pool of low-wage labor.

Furniture Trade Gap Widens

According to the U.S. Department of Commerce, 150 nations combined to ship nearly $5.8 billion worth of wood furniture and parts to the United States in 1997. The top 10 import-source countries accounted for 80% of that total.

TOP 10 U.S. FURNITURE IMPORTERS
in U.S. millions

             1989          vs.              1997

1 Taiwan             $761       1 Canada             $1,460
2 Italy               424       2 China                 865
3 Canada              365       3 Italy                 677
4 Philippines         149       4 Mexico                465
5 Yugoslavia          140       5 Taiwan                455
6 Mexico              136       6 Indonesia             293
7 Denmark             129       7 Philippines           159
8 China                92       8 Thailand              158
9 West Germany         82       9 Denmark               108
10 Thailand            82      10 United Kingdom         86
Top 10 Total        2,360         Top 10 Total        4,728
World Total         2,902         World Total         5,766

Figures also include upholstered furniture and wood furniture parts.

Source: U.S. Dept. of Commerce

Fueled by record imports, the U.S. furniture trade imbalance reached a high of $4.6 billion in 1997 and was on pace to exceed $5 billion for the first time in 1998.

The biggest chunk of the furniture trade gap is with Canada, which shipped $995 million more in furniture to the United States than it received from U.S. manufacturers in 1997. But the fact that Canada exported three times more furniture and parts than it imported from the United States pales in comparison to the U.S. trade deficit with China.

In 1997 China exported $866 million in furniture and parts to the United States, while importing a paltry $9.5 million worth from U.S. manufacturers, who face hefty tariffs to sell to China.

In spite of its failure to open markets in kind to U.S. manufacturers and the continuing controversy over China's human rights record, Congress and President Clinton have continued to support the renewal of China's MFN status. The hope is that opening trade doors will help normalize relations with the world's most formidable Communist power.

Many U.S. woodworking machinery and furniture manufacturers look at China as a great market opportunity. But how soon that potential will be realized is anybody's guess.

China may have opened its doors to foreign capital investment, but it has yet to open up its markets.