Why Chinese Tire Firms Protect themselves

Serious threat to Chinese companies

If the special security case passes, it will bring a fatal blow to the Chinese tire industry.

China is a big country for tire production and export. In 2008, the tire production reached 350 million, of which 40% were exported, and about 1/3 were exported to the United States, amounting to 46 million, and the amount was 1.7 billion US dollars. The case involved more than 20 companies and more than 100,000 workers.

When the Chinese Ministry of Commerce delegation lobbyed in the United States, if the 55% tariff imposed on China in the first year would completely exclude China’s tires from the US market, instead of reducing it to the 2005 level, it would drop to zero.

The products of Beijing First Tire Co., Ltd. (formerly Beijing Tire Factory) have a place in the international market and are exported to the Americas, Europe, Australia, Africa, the Middle East, Southeast Asia and Other parts of the world. The director of the company’s office, Jiang Fei, told the “China Sankei Shimbun” reporter that although the company is not a complete export-oriented company, if the special security case is passed, the impact on the company is not small.

According to Jiang Fei, the company exports 50% to 60% of its products, of which about half are exported to the United States. The monthly export volume is between 50 million and 70 million yuan.

There are many companies like this.

According to our reporter, nearly 80% of Shandong Yellow Sea rubber products are exported abroad, and a large number of semi-steel tires are sold to the US market. If the “special security case” is established, it will undoubtedly have a great impact on the export of Yellow Sea rubber to the United States.

Businesses actively respond

Industry sources pointed out that regardless of the outcome of the special safeguard case, Chinese tire companies must be prepared.

Jiang Fei, director of the office of Beijing Capital Tire Co., Ltd., told the "China Sankei Shimbun" reporter that although the judgement of the situation is relatively optimistic, the company must make good preparations and transfer overseas markets.

Huanghai Rubber's strategy is to increase the development of emerging markets such as India, and has achieved remarkable results.

Zhejiang is a major province of tire production. A few days ago, people from Zhejiang Provincial Department of Commerce stated that the two investigations currently involve more than 240 enterprises in the province, and the amount involved has reached more than 300 million U.S. dollars. “Current companies are preparing to respond to the case.”

After the investigation by the US, two local leading companies, Zhongce Rubber and Hankook Tire, actively participated in the collective response organized by the industry association.

This special case of tire protection is not the first case of anti-dumping in China, including auto parts such as fasteners, aluminum wheels, and brake pads. They have also been subject to trade sanctions in the EU, North America and other regions.

Chen Wenkai, president of Gasgoo.com, pointed out that while taking anti-sanctions to resolve trade disputes, China should also consider changing its pure export trade methods, such as considering the establishment of factories in the local area, brand promotion, and access to the local passenger vehicle market.

However, Jiang Fei also pointed out that there are still limitations in the development of the domestic market, driven by policies, the domestic automobile market has increased, but the impact on tire companies is not obvious. In addition to the new car package, a considerable proportion of the replacement tire market has a fixed period. Therefore, the increase in the direct consumer market is limited.

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