The Dark Side

A major part of my job is to buy wooden products from China.   I buy all sorts of things, for both personal hygiene and outdoor use.  And as I "buy" from China,  one would naturally think the wood itself also is from China.  Alas, this is not the case.   All over the world, unless one thinks of bamboo, the wood comes from Russia.  This is an important distinction to make.

I think the process of making wooden products such as furniture is quite cool, a bit sneaky, and a great environmental risk.  And I want to talk about it because it is greatly reflective of what every other importer of product to America from China has to think about.  Oh yeah, it’s also very reflective of how other wooden products in China are made.  Because these folks probably have the same supply chain that I have.  Don't think for moment their shit doesn't stink.  It does. 

Just as bad as mine.

Why is all this a big deal?

Simple.  China, in a very well intentioned moment, banned almost all logging from within its borders overnight.  This happened a few years ago.   China's forests had become so depleted, so thoughtlessly ravaged, that there just wasn't enough wood to go around to support both one billion people AND it's foreign customers that rely upon things like furniture, wooden flooring.....or toothpicks.  

 That's where I come in.

My company is one of America's largest wooden product sellers.  That is, we sell into Wal-Mart, and into many other retailers. And we make very nice margins to boot.  If one gives it a bit of thought, on the surface it’s nearly a "win-win" for everyone.,

The Chinese get to save their local forests from destruction.
We Americans(and Europeans) get good quality stuff.
And the source of the wood from which the products are made makes out like a bandit, too.

What is there to complain about??

It seems quite a lot.  After all, how can the Russians, the Chinese, and the Americans get along within a business relationship and NOT have problems, right?

Well, it turns out most of the issues are between the Russians and Chinese themselves.   As most people that have spent any time in Russia or China know, the Russians and Chinese are not the best of friends. The Chinese think the Russians lazy, the Russians think the Chinese just want to consume.  To take.  Or to some other minds, to rape the natural resources of Mother Russia for its own personal benefit.

Need I remind you that what is current day Vladivostok once was part of China?  And in a drunken nationalistic rant or two, more than one Chinese has stated they "want it back"!

But back to Russia's natural resources.  The  Soviet Union was at one time nearly three times the area of America. With vast resources, yet when it broke up into Mother Russia itself, it still was able to maintain almost all of its vast resources of forests.

For example, Russia is full of birch.  And who has all the birch?  Siberia does.  Thus when the Heavenly Kingdom banned logging for consumer use(plantations are still allowed),  Russia was suddenly open for business.  So the Chinese went in, bought the birch, the Russians cut it down, and in turn shipped it to China.  In China it was turned into finished product, and shipped from places like Qingdao.  Itself a huge furniture export center.

So what's the rub?

The rub is now that all the news is getting out about how the Chinese are cutting down trees for everything(combs, furniture, crafts, etc), the Russians are now waxing all nationalistic and indignant.  And the easy person to blame is the guy buying all the wood, Mr. China Man himself.  Well, what about the guy who owns the damn trees?  You see, the Russians are supposed to manage their own forests.  In my view, it's the responsibility of the guy supplying the stuff to make sure he has ample supply for future needs.  Not the job of the customer.  The customer simply has to ensure he has demand.  Not supply.

And that's where the Russians drop the ball.  They simply don't replant like they should. 

And the demand is there.  We ship millions of units a year.  At least. To every major retailer out there.  But as the Russians don't take care of their forests, word is starting to get out.  As such, the American retailers are beginning to take notice, right?  Not really.   Either they don't care, or maybe they don't read the NY Times.  American's just want their needs served.  Their chair, their pencils, etc.

And if you asked the average Yank where they come from, he or she would probably say "America", "I don't know", or out of simple laziness, "China"

Probably wouldn't guess Mother Russia.

Putin meanwhile, is facing pressure to raise the tariff on wood.  And why wouldn't he?  I mean, where else will China get its wood from?   Bamboo from China is still an option.  And from Vietnam.  For instance,  the Japanese went all crazy environmental  Nazi a few years ago and now mainly import bamboo from Vietnam.  Bamboo you see, grows faster and is thus more sustainable.

However,  a good proper birch tree for example needs to grow at least 80 years in order to have strong, reliable wood.  And those days are gone.

So the pressure is on the Chinese importers to figure this out.  They need to balance inevitable Russian export tariffs, along with dwindling supply.

And this brings me to China's "import police".

Russia only has a few entry points into China for wood, via rail.  And while Russia has its own export oriented side, China has its own import customs agent.  While officially a member of Customs his uniform reads Police.  This is a well-dressed fellow, a bit dim witted, albeit ironically enough, honest looking.  He is neither cocky nor arrogant.  Quiet.  Yet when I meet him at the Russian border and I ask him where in Russia our product comes from he immediately replies,


And he continues,

"It will continue to come from there for at least the next 5 years."

Not sure how he knows this, but he does. 

Funny enough, my supplier beforehand, before I met the guy, stated "We have to work with customs to get things done."

I saw her point soon enough., 

I asked him how he winds up here, in the middle of nowhere.  And he told me matter of factly during lunch, between the steak and soup, at what looked to be the finest hotel in this small customs town.  The waitress was Russian.  A good looking but tired lady well into her thirties.  When one see's Russians all over the place, one knows it’s the Chinese doing well indeed.

The Customs Chief's story had been simple enough; he had been accepted to the police academy, and upon graduation some twenty years ago, been stationed here, in what I had hinted above was literally a God forsaken place.  Half the shop signs in Russian, and the other half in Chinese.    Turns out his job was literally a dead-end job until that is, China decided one day to just not cut any more damn trees down.  Simple as that.

Then suddenly, the Chinese had to look North, and lo and behold, trees were everywhere.  One careless Chinese trader actually bragged in the NY Times about how she could cut trees down continuously in Russia for one hundred years, there were so many.

Interesting.....and a dumb thing to say.

And now this backwater  Customs Chief was suddenly in demand, and hell bent quite frankly on not going anywhere anytime soon.  He showed up by taking me down to the actual border railyard,  unchallenged by anyone of course(they obviously knew who he was).  I saw the Chinese railyards full of Russian trains, Cyrillic everywhere.  I saw birch logs the size of a basketball hoop loaded onto car after car.

All eventually destined for America, among other places.  Global trade in real-time.  From Mother Russia, turned into products in China that any soft skinned and sallow Westerner could ever love, shipped from the Heavenly Kingdom to God only knows where.

While the Chinese habitually rotate their customs officers for obvious reasons, this fellow was still in place, I know not why.  Maybe the payoffs to his superiors were steady enough to keep him in place.  That is, assigning a newbie would simply slow down their own cash flow.  He was literally in the town everyone had forgotten.  A place those full of ambition had simply not conceptualized as the place to really be.  He is without question many times wealthier than myself.  All the while banned, along with his wife, from every traveling abroad.  Though his wife, if she used an ordinary passport, could do just that.

His wife is a fairly pretty, albeit middle aged, and very competent person in her own right.  She happens to work for my supplier.  Simply another piece of insurance. 

I mused for a bit, at the fact, should my supplier miss a pay out, how our products would suddenly not be shipping out of Russia.  Suddenly put in quarantine, or found to be "pest" ridden, or God only knows kept out of circulation for what reason....?

I mused again at a more important question;  how do I explain this to the home office?  Would they shoot the messenger?  Quite possibly, I admitted.

The problem for people like me never ends:  how to balance reporting what I "know", while maintaining the trust my organization has in me?  How can I not come away as tainted if I reveal all I really know?  Regardless of my own innocence? 

That is, by doing my job, do I not actually risk losing it?  It is an ever ending dilemma for people like me.  Frankly speaking, getting close to the Dark Side is my  job. 


  1. Makes me want to dabble in commodities futures and bet long on timber going up once the price catches up to its scarcity. Good read boyo!

  2. From reading this blog, I always thought your were tech guy, you are now branching out into raw materials? I guess in China you can do anything.....

    1. haha definitely not a tech guy, I'm afraid...I just know how to manage Chinese suppliers...

    2. Well that is a useful talent for the China market. In that case, I would like to hear more of these types of stories.


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