QINGDAO, China—China exported 3.4-percent fewer tires in 2009 than 2008 as a result of the global economic recession and the implementation of higher U.S. tariffs on tires imported from that country, according to Fan Rende, president of the China Rubber Industry Association.
And while he thinks the tariff—which amounts to 39 percent until Sept. 11, after which it will drop to 35 percent—will have greater influence on Chinese tire makers this year, he said the overall rubber industry in China should grow steadily and in a sustainable fashion in the years to come.
Fan made those remarks in a speech and interview at the Fifth China Rubber Conference & World Rubber Summit 2010 in Qingdao in March.
Looking at 2010 and beyond, Fan said the Chinese government will continue to stimulate the automotive industry to help it grow in China. It also will continue to invest in the development of high-speed railways, high-speed highways and its airports.
“These basic infrastructure programs will go on,” he said, “so that means they will have more demand for the tire, for the rubber pipe and also the engineering products.”
The Chinese government also will continue to support the agricultural industry in China and maintain efforts to encourage the growth of automobile and motorcycle usage in rural areas. “So the demand for the rubber industry also will be very strong,” he said.
But while these incentives should boost China's tire and rubber business, the industry will face some unfavorable factors going forward, Fan said.
“First of all, the U.S. tire dispute will impair the rubber industry,” he said. “I think there will be a long-term impairment to China.”
Environmental barriers put in place by the European Union also will have a huge impact on China's exports to Europe, Fan said.
Likewise, the weak global economy and the run-up in raw material prices, particularly natural rubber, will impact the industry. “We are not witnessing a full recovery of the rubber industry in the world,” he said.
Finally, while ongoing, the Chinese government's efforts to stimulate the domestic economy will not be as big as last year, he said.
Considering these factors, Fan said China's output of vehicle, bicycle and motorcycle tires, as well as conveyor and V-belts, should increase by about 5 to 8 percent in 2010.
Overall, he said consumption of rubber is expected to grow to 6.3 million tons in 2010, a 7.1-percent increase over 2009. China, he added, has ranked as the world's largest consumer of rubber for the past eight years.
Reviewing the performance of the tire and rubber industry in China in 2009, Fan said—citing data from CRIA member companies—that overall output was up slightly while exports were lower. Companies also were more profitable, he said, thanks primarily to lower raw material prices in 2009.
China's tire output, he said, rose to about 380 million units during the year, up 8.6 percent from 350 million units in 2008. But the rate of growth fluctuated during the year as a result of the weak economy and President Obama's decision to impose a three-year tariff on Chinese-made consumer tires exported to the U.S.
In the first 10 months of 2009, growth in output was “very slow” because of the economy and, after September, because of the tire dispute. But output began to recover in December, he said.
Fan said a strong domestic market, buoyed by the growing automobile industry in China, which now may be the world's largest, is a key reason why the country's tire and rubber industry continues to expand.
The Chinese automobile industry grew 40 percent in 2009 compared with 2008, “which means the tire industry and the rubber industry has also grown, has also very good demand from the rubber product and accessories,” Fan said.
Another factor benefiting the industry, he said, is that the tire and rubber industry has restructured with upgraded manufacturing technology that allows for a more diversified portfolio of products.
Addressing the tire and rubber industry overall, Fan called for worldwide cooperation to stimulate demand and overcome the global economic crisis.
“In the post-crisis era, the sustainable development of the world rubber industry needs the communications and the cooperation between different governments as well as the downstreams and the upstreams of the rubber industry,” he said.
Fan urged the rubber industry to contribute to the development of a low-carbon economy. “We should steadily increase the plantation area of natural rubber and to increase the quality and output,” he said.