China Launches the Adjustment Plan for Import Tariff of Rubber in 2009

As per 2009 Plan for Execution of Customs Duty disclosed by the Customs Tariff Commission of State Council on December 15, 2008, the conventional tariff for free trade between ASEAN and China would be still adopted for part of taxable items originated from Brunei, Indonesia, Malaysia, Singapore, Thailand, Philippines, Vietnam, Myanmar, Laos and Kampuchea, so that the relevant adjustment would be made for China's Import tariff for native rubber, compounded rubber and synthetic rubber from the above countries in 2009. 
 

The adjustment of import tariff for native rubber is listed as below:

The regular level I products include balata rubber, gutta percha, guayule rubber, chicle and similar natural gum (tax regulations no. 40013000). Currently, the conventional tariff for ASEAN is 12%. In 2009, the tariff reduction would be carried out for the ASEAN member states, among which the conventional tariff is lowered from 12% to 5 % for Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Kampuchea, Laos and Myanmar, while the conventional tariff for Vietnam is lowered from 12% to 8%.
 

In 2009, the tariff is not changed for such sensitive products as Natural latex (tax regulations no.: 40011000), native rubber & rubber smoked sheet (tax regulations no.: 40012100), native rubber with technical classification (TSNR) (tax regulations no.: 40012200) and the other primary native rubber (tax regulations no.: 40012900), namely, the alternative duty shall be continuously levied for natural latex, rubber smoked sheet, native rubber with technical classification (TSNR) and other primary native rubber imported from ASEAN, among which the tariff shall be reduced for the latex as per 10% or RMB 720/ton and the tariff shall be reduced for the latex as per 20% or RMB 2600/ton for the rubber smoked sheet and native rubber with technical classification; the tariff rate of 20 % shall be adopted for other primary native rubber.
 

The adjustment of import tariff for compounded rubber is listed as below:

The regular level I products include the compounded rubber (tax regulations no.40051000, no. 40052000, no. 40059100 and no. 40059900). Currently, the conventional tariff for ASEAN is 5%. In 2009, the tariff reduction would be carried out for the compounded rubber imported from the ASEAN member states, among which the conventional tariff is lowered from 5% to 0% for Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Kampuchea, Laos and Myanmar in 2009, namely, the tariff for compounded rubber imported from above countries is reduced to zero, while the tariff for the compounded rubber imported from Vietnam is kept at 5%.
 

The adjustment of import tariff for synthetic rubber is listed as below:

Except that the other primary carboxylated styrene-butadiene rubber (tax regulations no.: 40021919) under the styrene-butadiene rubber is the sensitive products, most synthetic rubber belong to level I products. Therefore, the regular most favored nation tariff of 7.5% for the ASEAN should be continuously adopted for the styrene-butadiene rubber with the tax regulations no.:40021919 in 2009, while for the other synthetic rubber, the tariff would be reduced to zero for the existing ASEAN member states and the tariff would be reduced to 5% for the new ASEAN member states such as Myanmar and Vietnam in 2009.
 

After the above tax rate is adjusted, obvious influence will be produced for the structure of China's native rubber market. In order to lower the cost, the domestic users will import the compound rubber via various means, while, the import shares for the rubber smoked sheet and rubber with technical classification would be reduced. Meanwhile, pressure may be caused on the home native rubber producers and processing enterprises. However, the adjustment of above policy would produce relatively limited influence on the rubber market. In the short run, influence is not obvious for the structure of synthetic rubber market because most of the ASEAN member states as per stated above belong to the synthetic rubber importers except that part of the styrene-butadiene rubber is exported by Thailand and Indonesia. It shall be concerned that after the butyl rubber production plant constructed by Lanxess is put into production in Singapore, the butyl rubber market in China may be influenced to the certain extent. However, the adjustment of customs duty between ASEAN and China will also go a long way in China's export of synthetic rubber to ASEAN.