Development of Non-Timber Forest Product Industry in the Context of Trade Globalization: A Case Study in Wuyishan, China

With the trend of trade globalization, developing countries have an indispensable role in the global value chain. In China, production and trade of forest products appear to be considerably sensitive in balancing industry development and ecological conservation. Simultaneously, increased trade in non-timber forest products (NTFPs) has merged as a new direction for sustainable forestry development. This study explores the effect of the NTFP trade globalization process on NTFP producer capital input using a dataset of 976 oolong tea producers in Wuyishan City, China, from 2008 to 2020. We ran pooled- ordinary least square regression and the results show that the trade globalization process of tea products is a driving force in oolong tea producer capital inputs in Wuyishan City, which increases with forest resources and producer scale. Additionally, our findings reveal that the local government implemented a fiscal policy to promote a sustainable composite model (SCM) in tea production, which includes terrace protection, organic fertilizers, tea-broadleaf symbiosis, and ecological water systems. Given structural growth in demand for tea products driven by trade globalization, the SCM promotion policy enhanced the quantity and quality of oolong tea products based on a harmonious coexistence with nature resulting in a mutually beneficial outcome for the government and producers. Study Implications: Results of our study provide evidence that NTFP trade globalization and diversification can promote the NTFP industry by increasing productive capital inputs by producers and innovatively summarize an environmentally benign solution for the adjustment of the production model of NTFPs. The scarcity of forestland and the social uses of forest resources require embedding sustainable governance into the development of the NTFP industry. With government support, the new model of sustainable NTFP production can serve the long-term planning of rational forest resource use.