The forest industry in China is continuing its expansion, and with limited domestic timber resources, importation of logs and wood chips are at an all-time high, especially as tight supply of domestic logs has increased local log prices to new highs in the second quarter of 2010, according to the Wood Resource Quarterly.The tight log supply has resulted in higher prices for domestically sourced logs this year. Chinese fir sawlogs prices were almost 17 percent higher in the 2Q/10 as compared to the same quarter in 2009, according to the Wood Resource Quarterly. Eucalyptus logs, mainly used by the pulp industry, have also become more expensive the past twelve months, reaching new record-highs.The continued high costs of locally sourced logs has resulted in higher volumes being imported so far this year. During the first eight months of 2010, the total imports of softwood and hardwood logs were up 23 percent compared to the same period in 2009. After Russia introduced its log export tax of 25 percent of the log value in 2008, shipments to China fell from a record 25 million cubic meters in 2007 to less than 15 million this year.During the first eight months of this year, imports of wood chips to China have more than doubled, compared to last year, as reported in the Wood Resource Quarterly. Pulp mills in China have increased their consumption of imported wood fiber dramatically in just two years. The total chip imports for 2010 are likely to be close to five times as much as in 2008. Vietnam is by far the largest supplier of chips, followed by Indonesia and Thailand. The three countries together currently supply about 90 percent of all imported chips.