CHINA Rubber Industry Association (CRIA) has urged government authorities to abolish the 20% customs duties for imported rubber to protect domestic tyre makers.
Currently, Chinese rubber importers need to pay 20% import duty , four times higher than the 5% tyre customs duty being paid by other countries belonging to the ASEAN
China’s tyre producers might not effectively control production cost and face a grave situation now with spot natural rubber prices surging to nearly 30,000 yuan/tonne from 26,000 to 27,000 yuan/tonne in early 2012.
Among 45 tyre makers in China, 11 players suffered losses in 2011 with value of losses growing 92.25% year on year, according to CRIA.
It says that Chinese tyre producers don’t have a level playing field in international trade due to high customs duties and are forced to rely on the business of processing trade.
CRIA also suggested the government to expand the capacity of national natural rubber reserve facilities and encourage domestic player to go global with tax incentives. China imported 2.1 million tonnes of natural rubber in 2011 at an average price of US$4,467 per tonne.
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