NDRC Interviews Natural Rubber Industry Calls for Cancellation of 20% Custom Duties

On October 25, the Department of Economic Affairs and Trade of the National Development and Reform Commission held an emergency meeting to study natural rubber imports, and 14 tire related units attended the meeting, including China Rubber Industry Association and three listed companies Sinochem International (Holdings) Co., Ltd. and Shuangqin Group. Corporation, Aeolus Tyre Co., Ltd.

The reporter was informed that in early October, at the symposium on the collection and storage of cotton held by the National Development and Reform Commission, relevant parties had reported the import of natural rubber and made a proposal to cancel the import tariff of natural rubber by 20%.

Tire industry has high external dependence

According to the Customs Tariff, the imported tire industry uses tobacco films and technical classification natural rubber, which imposes an import tariff of 20%.

The reporter learned from the heads of several major tire manufacturing companies that the main origins of domestic natural rubber are Hainan and Yunnan. Due to climatic reasons, domestic natural rubber cannot meet the tire industry's production needs. Currently, the rubber industry in the tire industry mainly relies on imports. Up to 90%.

According to customs statistics, in 2012, China's tire industry imported about 6 billion U.S. dollars worth of natural rubber, of which about 600 million U.S. dollars were imported for general trade and 120 million U.S. dollars for imports.

A person in charge of a tire company told the reporter that due to the high import tariffs on natural rubber in general trade, many tire companies had to import through processing trade. Processing trade is a way of trading both raw materials and the market, and tyres made from natural rubber imported in this way must be exported abroad.

The person in charge believes that this is the main reason for the high degree of foreign dependence on the domestic tire industry: “Processing trade is for people to do OEM, OEM, which is not conducive to shaping the brand in the domestic market, but also not conducive to exports, a large amount of exports Faced with international trade friction." He remembers the special protection case that the United States launched in 2009 on Chinese tires.

The processing trade earns a processing fee with a very low profit margin, while the profits of higher value-added technologies such as its own technologies and brands are exported to foreign countries. “This has hindered the development and transformation of domestic industries.” The responsible person said that the general trade import tariffs used for consumption in the domestic market are high. To avoid tax can only take the processing trade model to import natural rubber, and this trade model allows companies to Can not turn around, "When the domestic market situation is good, the price is high, the company because of the import of processing trade is natural rubber, only the product exports a road, unable to timely market conversion."

High tariffs hamper transformation and upgrading

The high import tariffs of China's natural rubber have also made other trading partners raise the tariff “threshold”.

The above-mentioned person in charge said that natural rubber imported from China is mainly from Indonesia, Malaysia, Thailand and other ASEAN countries.

According to the first phase of the China-ASEAN free trade zone construction framework (2002-2010), after the full launch of the free trade zone agreement on January 1, 2010, China imposed zero tariff on more than 90% of ASEAN's commodities. However, from the actual situation, natural rubber is obviously not included in this list. The ten ASEAN countries have also taken retaliatory measures. The average import tariff for tyres among the ten ASEAN countries is 5%, but at least 10% of high tariffs are imposed on imported Chinese tyres. All the people in the industry interviewed by the reporter believe that this is related to China's implementation of high tariffs on the import of ASEAN natural rubber.

“The enterprises most affected are the enterprises.” The person in charge of the above-mentioned enterprises lamented that “high import tariffs on natural rubber have put us under pressure and we cannot enjoy equal treatment in international trade.”

As a result, the person in charge of the company stated that they have appealed to the relevant trade association for several times and proposed to cancel the import tariff of natural rubber. “This will not only help reduce costs, but also increase the international competitiveness and domestic market share of Chinese tire companies. It will also help to completely change the production and operation methods of tires imported by natural rubber companies in the name of processing trade, and reduce international trade friction."

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