Asymmetric Responses of China’s Wood-Based Forest Product Imports to RMB Real Exchange Rate Volatility

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Abstract

China’s wood-based forest product industry relies heavily on imported raw materials, making exchange rate volatility relevant to procurement planning and risk management. This study uses quarterly data from 2008Q1 to 2025Q4 and ARDL/NARDL models to examine whether increases and decreases in renminbi (RMB) real effective exchange rate (REER) volatility are associated differently with China’s imports of logs, sawn timber, and wood pulp. The NARDL bounds tests provide evidence of a long-run level relationship in all three product-specific models. A 1% decline in the constructed RMB REER volatility is associated with increases of 0.835%, 1.670%, and 0.357% in imports of logs, sawn timber, and wood pulp, respectively, while A 1% rise in volatility is significantly associated only with a 0.901% decline in sawn timber imports. The response of wood pulp to declining volatility is smaller than those for logs and sawn timber. Comparison with the linear ARDL results suggests that symmetric specifications may conceal directional and product-specific differences. These findings highlight the importance of accounting for asymmetry when evaluating how exchange rate uncertainty is related to wood-based forest product imports.

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