Rubber and Tire Trade Shows New Trends

The foreign trade of Shandong province maintained stable growth in both import and export in the first half of this year and new trends had been seen in the rubber and tire industry.

Firstly, industry transition had been accelerated.

Under high operating costs, labor cost in particular, labor intensive industries, including the tire industry, had been transited to foreign countries.

At the same time, some developing countries in Southeast Asia, accepted the industries with the advantages of low labor and land costs.

As a large province of rubber and tire production and trade, Shandong's exports had been affected by such transition in terms of industry and orders.

Secondly, trade frictions surged.

In the first half of this year, U.S. launched anti-dumping and anti-subsidy probes against new inflated off-the-road tires, truck tires and bus tires from China, including four involving in companies in Shandong; and India launched anti-dumping probe against inflated radial tires from China, including one company in Shandong.

The value of the five cases was 1.96 billion U.S. dollars.

As a result, Shandong's tire exports to the U.S. and India lessened 300 million dollars in the first half and the exports was down 6.9% year on year.

As the investigations going further, exports of tire and steel and other key products from Shandong to those countries will decrease further, hence affect the province's total exports.

Thirdly, the exports of processing trade continued declining.

In the first half, the import and export, exports, and imports of processing trade in Shandong dropped 13%, 10.8%, and 17.1%, respectively.

With regard to specific industries, electrical and electronic products, rubber and tire, machinery, and textile all experienced sharp decline.

Analysts believed that the situation wouldn't reverse in the short term.

An industry insider said as global industry chain reshuffles, China's processing trade has been under downcast pressure over the past few years or even became a burden of the foreign trade.

Therefore, for traditional industries such as rubber and tire, business transformation and upgrade is necessary, and the industry should move toward the mid- and upper-end of the value chain through technical innovation, greater brand visibility and domestic market exploitation.