In 2015, both the Chinese rubber industry and the tire industry were an important year in the history of development. This year, the Chinese rubber industry celebrated its 100th birthday - in 1915, China's first rubber products factory was founded by the Guangdong Brothers Created Gum.

In the past 100 years, China's rubber industry has grown from scratch and has grown from small to large. From the very beginning, it was only able to produce rubber-shoe products. Today, it has established a complete rubber industry system, especially as a representative product for the rubber industry, and for various types of tires . The output has reached 562 million, ranking first in the world for 10 consecutive years and playing a significant role in the global market.

However, as the saying goes, “The big tree attracts attention”, China’s tire production and export volume has also caused frequent international trade frictions. The US’s “double anti-dumping” (anti-dumping, countervailing) survey on Chinese passenger car and light truck tires is currently being investigated. .

As the world’s largest tire producer and exporter, China’s auto tires (excluding non-road tires) have exported more than 5 million pieces a year, and the export value reached 14.5 billion U.S. dollars. The United States is the largest market for Chinese tire exports. It also accounts for 30% of total exports. The amount of money involved in the US "double reverse" case was as high as 3.37 billion U.S. dollars, involving more than 200 tire companies. It is expected that the livelihood of more than one million industrial workers in the upper and lower reaches will be affected, causing an unprecedented shock in the Chinese tire industry. Recently, the reporter conducted an investigation and interview of this incident.

Negative effects have begun to appear

The impact of the “double reverse” storm in the United States on June 3, 2014, has shown its impact on the Chinese tire industry.

On January 21 this year, the U.S. Department of Commerce issued preliminary anti-dumping results and determined that there were dumping behaviors in China's tire products exported to the United States. The two companies Jiatong and Saiwan had 19.1% and 36.26% tax rates, respectively. The anti-dumping tax was levied 90 days before the cut, and the tax rate was as high as 30.46% to 100.02%. It also discriminated against state-owned enterprises and did not give them a separate tax rate, which was levied at the highest rate of 100.02%.

The preliminary ruling of the U.S. Department of Commerce in the domestic tire industry sparked an uproar, the tax rate for the preliminary ruling was significantly higher than expected, higher than the bearing capacity of Chinese tire companies. Industry insiders have criticized that this is a discriminatory action against the Chinese tire industry and is a pure trade protection act. If such a high tax rate is implemented, it will have a huge impact on the national tire and related industries.

On February 7, 2015, Shandong Deruibao Tire Co., Ltd. applied for bankruptcy and reorganization. This was the first company that fell in the domestic tire industry under the impact of the “double reverse” in the United States. The reporter learned that as a tire segment under the Shandong Xiaolong Group, Drepro Tire was established in December 2009. It is a large-scale modern tire that integrates R&D, production, sales, and international trade of all-steel radial tires and semi-steel radial tires. The enterprise has a registered capital of 210 million yuan. The current status of Drepo Tire is related to the current overcapacity environment in the industry, and the U.S. "double reverse" has become the "last straw" to suppress it. In the United States "double anti-" response to the company's preliminary tax rate table, the company's parent company - Shandong Haolong Group was impressively listed.

On April 9, 2015, the China Rubber Industry Association held a seminar on international trade friction in Guangzhou, Guangdong Province. Liu Huichun, deputy general manager of Guangzhou Wanli Group Co., Ltd., said in an interview with the reporter: Will apply for the "double reverse" of Chinese tire products, is the so-called "Dog and take mouse", the qualification of the applicant itself has problems, but the U.S. Department of Commerce still initiated the investigation and made preliminary ruling, nakedly exposed the United States violated WTO rules and trade protectionism, especially when the United States ignores relevant WTO rulings, still insists on unreasonable practices, and refuses to grant tax treatment to Chinese state-owned companies involved. The tax rate of state-owned enterprises is as high as 100.02%, which is very high for state-owned enterprises. Unfair. As a state-owned enterprise, the Wanli Group faces such a high tariff and will undoubtedly lose the US market. It is estimated that the annual loss will reach more than 1 billion yuan."

Shen Jinrong, chairman and general manager of Chinachem Rubber Group Co., Ltd., told reporters that Chinese passenger cars and light truck tires that are exported to the United States account for one-third of total exports and account for about 15% of total output. Exercising such a high tax rate will have a huge impact on Chinese tires and related industries.

At present, the negative effects of the "double reverse" in the United States have begun to appear. Affected by factors such as the strengthening of the US dollar and geopolitical conflicts, except for the United States, other countries’ willingness to import Chinese tires has declined. The United States' "double reaction" has also blocked the main export channels of domestic enterprises, resulting in a rapid decline in the rate of business utilization, which was suddenly dropped from the 90% before the case was launched to about 55%. According to statistics from members of the China Rubber Industry Association, from January to February 2015, China's production of radial tires decreased by 5% year-on-year, and export delivery values ​​fell by 9% year-on-year.

The Final Defense still has a silver lining

After the United States' "deep-anti-crime" preliminary ruling, the final decision will be made by the US Department of Commerce and the US International Trade Commission in June and July of this year. There is still a last chance for Chinese tire companies to fight for their own rights and interests.

Beijing Jincheng Tongda Law Firm is the final adjudication law firm appointed by the China Rubber Industry Association. When interviewed by the senior partner of the firm, Yang Chen, the reporter learned that in order to lay the "double anti-improvement" lawsuit, China has The parties carried out their work in the front-line. The major ones include: employing US lawyers to apply for administrative protection orders and reviewing preliminary filings; submitting comments on the finalized questionnaires, and the vast majority of opinions have been adopted by the US International Trade Commission; Chinese and American lawyers face to face to discuss and discuss suits; training Chinese companies responded to the questionnaires, reviewed and corrected the questionnaires, and contacted potential US allies, such as the US Tire Industry Association, for their assistance and to explore ways to seek greater odds of defense.

After intense preparations, Chinese lawyers have prepared sufficient counter arguments. Yang Chen lawyer disclosed one of them: Tire products can be categorized into three grades according to product specifications. Most tires produced in the United States are in the first grade and the first. In the second grade, a large part of tires from China are sold in the third grade. The competition between the third grade tires and the first and second grades is very limited, especially the sales price. Chinese tires cause US tire industry The impact is almost zero. In the preliminary ruling, China's defenses on the three levels of tires have not been adopted.

Yang Chen believes that this is because the Chinese side did not provide sufficient evidence. Now China has prepared strong evidence in this respect. In 2009, the United States imposed a special three-year limit on Chinese tire imports. Full market data shows that in the fourth quarter of 2012, following the cancellation of China’s special tire tariffs on tires, although the number of Chinese tires exported to the United States increased, the prices of US tire products did not change significantly. This shows that the tires in China and the United States have different markets and do not conflict with each other.

It is understood that there are frequent precedents for winning anti-dumping lawsuits due to different market positioning of products. For example, in 2000, the EU launched an anti-dumping investigation against graphite electrode products in China. Chinese lawyers defended this: The graphite electrodes sold in the EU market are of three types: ultra-high power, high power, and low power. The market positioning of the three types of products varies in price and price. There is no competitive relationship. The plaintiffs only produce ultra-high-power graphite electrodes, and most of the graphite electrodes exported to the EU by China are high-power, low-power products. The EU's anti-dumping measures on products that it does not produce are not in conformity with WTO rules. Finally, the EU company had to revoke the lawsuit.

It is understood that in the next step, the Chinese lawyers will form a delegation with companies and associations, go to the United States to participate in the hearing of the US International Trade Commission, arrange for witnesses to attend the hearing and testify, and at the same time, they will also carry out various work in the United States to strive for final arbitration. Get the desired result.

When asked by reporters what kind of results the final ruling may win, Yang Chen believes that it would be too difficult to completely eliminate the "double counter" tariff and it is still possible to fight for a lower tax rate.

Optimize the structure without delay

At present, in addition to this “double reverse” friction, the Chinese tire industry also involved seven anti-dumping cases. The countries that initiated the issue include the United States, Russia, Belarus, Argentina, Turkey, and Brazil. The products involved include tires for cars, tires for construction machinery, and motorcycles. Car tires, bicycle tires, etc. According to statistics, since 2001, the Chinese tire industry has experienced 19 anti-dumping and anti-subsidy cases initiated by nearly 20 countries.

Why did China's tire industry become a hard-hit area for anti-dumping abroad? When the reporter interviewed Deng Yachen, president of the China Rubber Industry Association, he learned that one of the important reasons is that the import tariff of natural rubber, the main raw material of the Chinese rubber industry, is too high, while domestic rubber produced in China is only Can meet 20% of domestic demand. Faced with this dilemma of “no-wholesale”, domestic tire and rubber companies have to go through some major advances such as processing of incoming materials. However, the large number of tire exports will naturally trigger anti-dumping and other international trade frictions.

The reporter learned that recently the domestic import tariffs for natural rubber have been raised, and the import tariff for natural rubber classified for technical classification has been adjusted from 1200 yuan/tonne to 1,500 yuan/tonne, and a new compounding rubber standard that restricts the processing of natural rubber materials has been adopted. Undoubtedly making the tire industry in trouble worse. The China Rubber Industry Association put forward its opinions on tariff adjustment at the first time and carried out a series of complaints.

In this regard, Shi Yifeng, secretary general of the tire division of the China Rubber Industry Association, stated that as the main raw material for tire manufacturing, it is inappropriate to apply high tariffs to natural rubber, a domestic strategic material that is in short supply. First, high tariffs increase the production costs of tire companies and can easily trigger international trade frictions, which seriously restricts the development of upstream and downstream industries. Second, high tariffs also restrict Chinese tire companies from exporting to ASEAN countries. According to the principle of reciprocity, ASEAN countries impose a high tariff of 10%-40% on tires imported from China, while the import tariffs on tires among 10 ASEAN countries are only about 5%. Thirdly, high tariffs have also hindered the development strategy of “going out” in the domestic natural rubber industry represented by the Guangdong agricultural reclamation. For a long time, the domestic natural rubber industry has been developing slowly, and its annual output has hovered around 800,000 tons, which is far from meeting the needs of the domestic market. However, the “going out” rubber products sold back to China also need to impose import tariffs, which in effect plays a role of protection from backwardness and seriously affects the overall interests of the industry. Fourth, the increase in tariffs and the closure of imported plastic adhesive doors will not help the rebound in natural rubber prices, but only to the already difficult domestic rubber tire industry hit again.

This reporter learned that, in order to fundamentally defuse the pressure of trade protectionism, many domestic tire companies have accelerated the pace of “going out”: after the Phase 1 project of the Race Wheels tire factory in Vietnam was completed and put into production, the second phase of the project followed. Launched, it is expected to form an annual production capacity of 7.8 million semi-steel radial tires and 15,000 all-steel radial tires. The first phase project of Linglong International Tire (Thailand) Co., Ltd. started in February 2014, and the second phase of the project also began. Has been put into operation, will form an annual output of 13.2 million high-performance radial tire production capacity; China Cease Rubber Group's investment in Thailand to build an annual output of 5 million passenger tires project is accelerating the start, is expected to be put into operation in October this year across the board; Qingdao Sen Yulin Tire Co., Ltd. also established 10 million passenger tire plant projects in Thailand. In addition to the aforementioned projects, large-scale tire companies such as Delta, Double Money, and Double Star are also actively seeking to establish multinational plants in the world and promote market sales and diversification of raw material supply.

“Frequent international trade frictions have sounded alarm for the industry. Domestic tire companies should get rid of speed complexes as quickly as possible, speed up product structure adjustments, increase brand competitiveness, improve product quality, increase product added value, and earnestly maintain good order in the export market. It is very important for the industry to get out of the predicament of foreign trade friction." Shi Yifeng finally stressed.

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