3.1 Statistical Method
3.2 Regression Method for Outlook Projection
Before 1995, China's statistics on production of wood-based panels (other forest products and even other industrial products at large) include only the enterprises at and above the township/town level, however the Third National Industrial Survey conducted in 1995 expanded the statistical scope to include village-run enterprises and private villager enterprises with its annual sales income exceeding 1 million RMB yuan. Hence, there is a great (sometimes several times) difference between the 1995 statistics and the statistics before 1994 (inclusive) for the production of forest products (including wood-based panels). This study holds that this is caused by inconsistent statistical methodologies and approaches and that the 1995 statistics best reflects China's actual production of wood-based panels. Therefore, the 1995 statistics shall be regarded as comparison and adjustment values in projection of future production, and the time span for basic data shall move one year backward during projection which means that the 1989 statistics will also be used for simulated projection. After the law of development (equation of simulated regression) between 1989 and 1994 is discovered through analysis, the projected value for 1995 shall be made available through simulation, and the difference between the projected and the actual values for 1995 shall be basis for projection and adjustment.
In order to carry out scientific and quantitative projection of the trend of development in China's wood-based panel market between 2000 and 2010, this study firstly analyses the actual values for production and consumption between 1989 and 1994 (simulation on consumption starts from 1990 or 1992 due to reasons given in 2.3.1.2) to discover the laws governing growth, then defines adjusted regression values through comparison with the actual values (the more precise values) of 1995, and eventually plots out simulation curve (or rectilinear) equation for future trend of development, from which the outlook projection values to the year 2010 and the possible actual values between 1990 and 1994 (the possible actual values in line with the scope and approaches of the Third National Industrial Survey) could be inferred. The concrete simulated projection method is to determine relevant points in the time and supply/demand coordinate system in light of basic data and computing data over the years, then to select three possible development curves (rectilinear trend, geometric average trend and exponential curve trend) according to the trend of development to simulate regression equations and calculate its extent of deviation respectively, and finally to simulate the initial regression equation in light of specific conditions (the main evidence is the least extent of deviation, i.e.: the most accurate projection equation, followed by possibilities of future development) (He Guodong et al., 1989).
This study has conducted simulated regression with all the three possible curves and eventually adopts only the rectilinear trend according to the magnitude of deviation and trend of development. The final regression equation is the adjusted regression equation after comparison with the actual accurate data of 1995. The annual projected values of production and consumption to the year 2010 inferred from this equation is in fact based on the precondition that the scale and speed of future national economic and social development is in approximation to those between 1989 and 1994, without consideration of the practical development of some wood-based panel products in China.
However, downward adjustments (excluding MDP) are necessary from the projected values for the period between 2000 and 2010 (i.e.: after the Ninth Five-Year Plan period) calculated with the equation obtained through regression of the data for the period between 1989 and 1994 (about the Eighth Five-Year Plan period) in light of the development plans over the years, in particular the Working Report of the Government and the Outline of the Ninth Five-Year Plan (1996-2000) for the National Economic and Social Development and the Long-range Target for the Year 2010 adopted at the National People's Congress, and relevant forestry sectoral development plans (for instance, the annual average growth rate of China's GNP was 12.0% during the Eighth Five-Year Plan (1990-1995) period compared to 8.0% during the Ninth Five-Year Plan period(1996-2000), 10.5% (actual) in 1995, 9.7% (actual) in 1996, 8.0% (planned) by 2000 and only 7.0% (planned) by 2005 and 2010. These are the major measures taken by the Chinese Government to mitigate inflation by slowing down the pace of economic development and the extent of decrease is far higher than the annual population growth rate (merely around 1.2%)).
Nevertheless, the projected values for MDF are adjusted upward (basically multiplies the difference) in light of the difference between the present production and the production capacity due to the fact that MDF production in previous years did not reflect the actual production capacity (nearly half of it has not been brought into play) and that MDF is a promising product in China.
It is worth mentioning that the scope of adjustment should not be too wide, otherwise it is meaningless to have the quantitative regressive simulation. In addition, another purpose of slight adjustment is to round up the project values.
