China's timber market system has undertaken reforms as China adopts market liberalisation. Timber production and distribution were monopolised by the government prior to the 1980s but a gradual transition from state allocation to market liberalisation occurred during the late 1980s and early 1990s. Currently timber producers are allowed to market their timber directly to different buyers, although timber harvest and transport remain under state supervision.

Both China's primary wood processing industry and wood consuming sectors have experienced rapid growth. Meanwhile, China's imports of forest products has been growing, driven by the combined forces of a strong demand for timber products by domestic industries (including construction, furniture and panel) together with limited domestic productive forest resources. The government's efforts in establishment of commercial timber resources by fast growing plantations aim to reduce the imports. However, the gap between domestic supply and demand will continue to be filled by imports in the near future.