When the import of natural rubber resources is limited
At the 2008 China Rubber Market Development Forum and the recent "Two Conferences," the future of the rubber industry has been a central topic of discussion among industry leaders. A growing concern is the increasing scarcity of natural rubber in China, which has sparked a sense of urgency across the sector. In this year’s proposals, there was renewed criticism over the unreasonable classification of natural rubber as an import commodity under processing trade, highlighting the long-standing issue of high tariffs on its imports.
China consumes over 2 million tons of natural rubber annually, but domestic production only meets around 600,000 tons, leaving a self-sufficiency rate below 30%, well below the safety threshold. Since joining the WTO, the country's reliance on imported natural rubber has consistently hovered around 70%, rising from 75.6% in 2007. According to estimates and the “Eleventh Five-Year Plan,†annual imports are expected to increase by about 100,000 tons over the next five to ten years, maintaining the same high dependency level. The International Rubber Research Organization predicts a gap of 2 to 3 million tons by 2020, which could threaten the stability of the entire rubber industry.
As tire manufacturing—especially radial tires—relies heavily on natural rubber, the industry is under pressure to grow while dealing with resource shortages and rising costs. Despite the limited domestic supply, natural rubber remains a strategic material for the country. Although selective tariffs were introduced in 2007, the rates of 10–20% have not significantly eased the burden on companies. This situation has led to increased calls for tariff reductions.
With domestic supply constrained and imports facing restrictions, the tire industry faces a critical challenge. Imported natural rubber, despite its high tariff, remains a crucial resource. If the 20% tariff persists, the shortage will continue to drive up costs and hinder growth. Meanwhile, compound rubber has emerged as a viable alternative, especially given its lower import tariff from ASEAN (only 5%). Its share in natural rubber imports has risen rapidly, offering a temporary solution.
However, compound rubber still lacks clear definitions, standards, and testing procedures. In 2006, the China Rubber Industry Association introduced self-regulatory guidelines, and the Ministry of Commerce later recommended these to national standards, helping establish a legal framework for the industry. While compound rubber has eased some pressure, it is not a permanent fix.
In addition, concerns over processing trade and export policies have added to the industry’s challenges. Export tax rebates have been reduced, and restrictions on re-exporting rubber products have created uncertainty. These measures have already impacted companies, with one major tire manufacturer reporting a 100 million yuan loss in 2007 due to rising costs and currency appreciation.
To cope, many companies have raised prices, but market demand remains limited. Export restrictions have also increased pressure on the domestic market, leading to tighter liquidity and reduced investment in innovation. The natural rubber supply chain is at the heart of the industry, and addressing these issues requires coordinated efforts between policymakers, industry associations, and businesses to ensure sustainable development.
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