On August 4, China Natural Rubber Association and China Synthetic Rubber Industry Association jointly released Self-discipline Regulations on General Technologies of Mixed Rubber (hereinafter referred to as Regulations), which would be implemented from August 18.

The definition of mixed rubber in the Regulations is somewhat different from what is described by the General Administration of Customs. At present, the General Administration of Customs describes mixed rubber with Tax No. 40028000 as “something mixed by the product numbered 4001 with that numbered 4002”, i.e. a compound of natural rubber and synthetic rubber. Whereas the definition of mixed rubber in the Regulations is “a compound that is mixed by synthetic rubber with its mass fraction no lower than 50% and natural rubber with its mass fraction no higher than 50% while the nitrogen content is between 0.30% and 0.15%”.

It is believed that the Regulations was formulated against the background of a surge in import of mixed rubber (tax: 40028000) under the item of synthetic rub- ber after the new standard for compounded rubber had been carried out.

Since the implementation of the new standard for compounded rubber in July 2015, the import volume has substantially dropped from the previous 200,000 to 300,000 tons per month to the current 10,000 to 20,000 tons per month. But at the same time, a phenomenon of mass import of mixed rubber appeared. According to statistics from the Customs, during the period from January 2015 to June 2016, the import volume of mixed rubber was 1.327 million tons, among which 789,000 tons were imported from January to June this year, with a year-on-year increase of 1152.38%. Whereas the import volume of synthetic rubber during the same period was 1.524 million tons, among which mixed rubber accounts for 52% of the total import volume of synthetic rubber.

Based on an analysis of the source countries of import, from January 2015 to June 2016, mixed rubber primarily came from main producing countries of natural rubber, such as Thailand, Vietnam, Malaysia and Indonesia, which account for 46.88%, 24.94%, 23.70% and 4.09% respectively of the total import volume of mixed rubber.

This standard is merely a self-discipline standard within the industry and has no compulsory execution effect at present, but once being adopted by the customs in the future, it will have a significant influence on both upstream and downstream rubber enterprises. Industry insiders believe that the mass import of compounded rubber and mixed rubber is fundamentally determined by the extremely high import tariff on natural rubber. We are a country that has limited natural rubber resources and thus has an import dependency of over 80%. The government’s efforts to regulate the order of rubber raw materials import should be focused on dealing with the fundamental issue.

As the interests of upstream and downstream rubber enterprises are closely tied to each other, industry insiders appealed to the government to lower the tariff on natural rubber and to formulate policy standards that accord with the sound development shared by upstream and downstream industries, thus providing a platform where upstream and downstream Chinese enterprises in the rubber industry can have a fair competition with the foreign ones.