It found about 70 percent of all timber imported into China, now the largest consumer of wood from tropical developing countries, is converted into furniture, plywood and other processed products for export.

China has captured about a third of global furniture trade over the past eight years, and the booming business, coupled with China's domestic demand for paper and wood products, is devastating forests and forest communities elsewhere, the report says.

"Few consumers realise that the cheap prices they pay are directly linked to the exploitation of some of the poorest people on earth," said lead author Andy White in a media statement.

The report urges the Chinese government to act domestically to strengthen tenure and reform policies related to timber, improve productivity and focus more on ecosystem protection.

Such steps would enable China's government and industry to reduce the reliance on imports which helps drive illegal logging in other countries.

China accounts for over half the log exports from Papua New Guinea, Myanmar and Indonesia, the report says.

In Indonesia alone 80 percent of the timber harvest is estimated to be illegal, with poor forest management and murky laws adding to wood industry problems in a country where deforestation threatens the environment of indigenous tribes and many rare species.

At present cutting rates, natural forests in Indonesia will be logged out in 10 years, Papua New Guinea in 13 to 16 years, and the "situation in Myanmar is no better, and may be even worse", the report says.

The Indonesian government has been trying since early 2005 to crack down on illegal exports of wood from its remote Papua province to China, estimated to be worth over $1 billion a year.

Environmental campaigners say politicians in Jakarta and Papua have cooperated with criminal networks in the illegal trade.