China-Thai relations have been good for decades in various aspects: trade, investment, and tourism. Especially, the natural rubber exports from Thailand to China continually expand. China is by far the largest consumer of natural rubber worldwide and most world tire production, so China's market is an important market to show a market sign of natural rubber demand each year. China’s economic direction is one of the factors which directly affect natural rubber demand and prices. Therefore, it is significant to monitor China’s economy. In 2019, China’s economic expansion is the lowest over 30 years because of the prolonged US-China trade war as well as the stagnant demand of the world. However, China government has rolled out stimulus measures continuously. In October 2019, China government had reduced banks’ reserve requirement ratio (RRR) to promote lending to small and medium enterprises. They also cut various tariffs for the business sector, and reduced VAT, resulting in China’s economic growth over 0.8%.
In December 2019, China’s Consumer Price Index (CPI) increased by 4.5% compared with the previous year; however, it still lowered than the projection at 4.7%. Meanwhile, in 2020, China will make further efforts in additional tax cuts to improve its tax administration efficiency. Furthermore, China and the US have signed a phase 1 trade deal on January 16, 2020, affecting positive ways to the economy of China, the US, as well as the world’s economy. However, International Monetary Fund (IMF) has reduced the prediction of China’s economic expansion as 5.8% in 2020, which lower than the economic growth rate as 6.1% in the previous year. Nowadays, China’s economy is in the stage of structural reforms to be sustainable economic growth. They try to reduce the country's reliance on debt to stimulate their economy and urge domestic consumption. Although during the reforms China’s Gross Domestic Product (GDP) slowly expands, it is the effective growth.
According to the Association of Natural Rubber Producing Countries (ANRPC), in 2019, China produced 836,300 tons of natural rubber; meanwhile, the natural rubber demand was 5.48 million tons (39% of the world’s natural rubber demand), down 3% compared to the previous year. Furthermore, China imported 5.11 million tons of natural rubber, 50% were mixtures and compound rubber. In the rubber-based product sector, in 2019, China produced 611 million units of all tyres (511 million units were radial tyres), up 1% YoY, and China’s car sales were 26.2 million units (28% of world’s sales), down 8.3% YoY (LMC International Ltd., 2020). It can be inferred that China’s natural rubber consumption is slow down. One of the factors is that China pays attention to environmental policy and has rolled out a pollution control policy to save the environment. Because of the policy, some of China’s rubber manufacturers close down and relocate their production base to ASEAN countries such as Vietnam and Thailand, resulting in an increase in Thailand's natural rubber consumption. To support the increasing of natural rubber domestic consumption, Thai government has rolled out the policy in establishing the Eastern Economic Corridor (EEC), especially in Chonburi and Rayong, in which recently 4-5 China’s tyre entrepreneurs have already established factories and proceeded the production.
The above data suggests that China’s potential and growth has a positive impact on the economy of ASEAN, especially on the rubber industry. Therefore, Thai government and the private sector should promote trade and investment and international relations with China. In this regard, China Rubber Industry Association (CRIA), one of the leading rubber organizations of China, is to organize China Rubber Conference 2020 under the theme “Ahead by Pooling our Wisdom, Embracing a Splendid Future in the New Era” during 17-20 March 2020 at Shangri-La Hotel, Qingdao, China. It is projected that more than 1,000 people from both government and private sectors will attend the conference. The Thai Rubber Association is pleased to cooperate with China Rubber Industry Association for the mutual sustainable development of the rubber industry of Thailand and China. I take this opportunity to invite interested parties to attend China Rubber Conference 2020. Details can be fetched at www.criaevents.com
On the occasion of Chinese Lunar New Year 2020, I extend to you and your family our warmest greetings, wishing you a happy Chinese Lunar New Year, your career greater success, your family happiness, and your perfect health and lasting prosperity. Xin jia yu ei Xin ni huad chai!
Mr.Chaiyos Sincharoenkul
President
The Thai Rubber Association
