Zhu Hong, the deputy secretary-general of the China Rubber Industry Association, suggested that the rubber industry should address the weak links and eliminate the bottlenecks.
The "14-15" planning proposal suggests that "we must resolutely remove the obstacles and bottlenecks that hinder the construction of a unified national market". "We should enhance the internal driving force and reliability of the domestic large-scale circulation." As a fundamental industry of the national economy, how can the rubber industry remove the obstacles and bottlenecks in the domestic large-scale circulation? Recently, the reporter conducted an exclusive interview with Zhu Hong, the deputy secretary-general and director of the Technical and Economic Committee of the China Rubber Industry Association, to offer suggestions for the high-quality development of the industry.
The bottlenecks and obstacles run through the entire industrial chain.
"Significant bottlenecks and obstacles exist at each stage - the upstream, midstream and downstream - of our country's rubber industry chain," Zhu Hong said frankly.
From the perspective of the upstream raw material supply chain, the high degree of dependence on foreign sources and the insufficient self-supply capacity are prominent issues. China's natural rubber supply mainly relies on the Southeast Asian market, and the supply chain is vulnerable to impacts from abnormal climate conditions, policy changes, and geopolitical risks. The dependence on key synthetic rubber raw materials such as butadiene and isoprene exceeds 60%, and the self-sufficiency rate of high-end product grades is less than 60%. The self-sufficiency rate of high-end products such as special fluorine rubber and silicone rubber is even lower than 40%. Core preparation technologies are monopolized by overseas enterprises for a long time, and a large amount of imports is needed to make up for the supply-demand gap every year.
From the perspective of midstream processing and manufacturing, there is a structural imbalance in China's rubber processing capacity, with 70% of the capacity concentrated in the eastern region. At the same time, the structural contradictions in the industrial chain are prominent, and technical bottlenecks and green transformation are also major challenges that need to be overcome in the rubber processing and manufacturing process.
From the perspective of the downstream demand segment, in recent years, the penetration rate of new energy vehicles has rapidly increased, and the demand for high-performance rubber products such as low rolling resistance tires has soared. Meanwhile, the shrinking traditional fuel vehicle market has led to a mismatch between production capacity and demand for general rubber products. At the same time, special rubber is widely used in fields such as aerospace, petrochemicals, and military equipment. Particularly in emerging fields like healthcare, aerospace, and wind power generation, the annual growth rate of special rubber demand reaches 12% to 15%. However, domestic supply of high-end special rubber products is insufficient, making it difficult to meet the upgrading demands of these emerging industries.
Four factors jointly restrict the development of the industry.
Zhu Hong stated that the bottlenecks and obstacles in the rubber industry not only hinder its own development, but also have multiple impacts on the security of the domestic industrial chain and the smoothness of the large-scale circulation.
First, it raises the operating costs of enterprises and narrows the profit margins of the industry. The reliance on imported raw materials from the upstream sector leads to domestic enterprises being subject to fluctuations in international prices. The poor transmission of terminal product prices, combined with the structural contradictions within the industry, causes internal competition and further squeezes the profit margins of the industry.
Second, it affects the security of the industrial chain and supply chain, and hinders the upgrading of the midstream industry. The geopolitical and natural risks in the supply of natural rubber, as well as the challenges in the production of key technologies for synthetic rubber, have led to unstable supply of the global rubber industry chain, posing risks for the domestic rubber industry chain. At the same time, the insufficient supply of high-performance and special rubber directly restricts the self-control and upgrading and iteration process of emerging industries such as new energy vehicles and aerospace.
Thirdly, it hinders the smooth operation of the domestic circular economy and reduces the efficiency of resource allocation. The unbalanced layout of midstream production capacity leads to an inefficient logistics model of "long-distance transportation of raw materials + cross-regional distribution of products", which increases the logistics costs and energy consumption of the domestic circulation. Insufficient industry collaboration results in information asymmetry, where there is a coexistence of overstocked raw materials in the upstream and insufficient demand in the downstream, leading to low efficiency in resource allocation. Moreover, the lag in industry green transformation causes some products to be blocked from export, making it impossible to effectively connect the domestic and international dual circulations.
Fourth, it weakens the international competitiveness of the industry and misses out on opportunities in emerging markets. The technical barriers to key technologies in high-end materials have led to a lack of bargaining power for domestic rubber product enterprises in high value-added fields. At the same time, the response speed of the industry's supply chain lags behind market changes. For instance, the layout in emerging application markets such as new energy vehicles and wind power generation is delayed, resulting in enterprises missing out on the growth dividends of demand.
Five paths to build a domestic circulation system
The core of strengthening the domestic circular economy in the rubber industry lies in addressing weaknesses, optimizing the structure, enhancing collaboration, and improving resilience. Zhu Hong stated that the industry can build a domestic circular economy system featuring "raw material autonomy - efficient processing - demand adaptation - smooth logistics" through self-control of upstream raw materials, technological breakthroughs and capacity optimization in the midstream, exploration and adaptation of downstream demands, and upgrading of the entire supply chain collaboration. Five specific implementation paths have also been proposed.
First, we will tackle the bottleneck in upstream raw materials and enhance our ability to independently supply these materials. We will expand the scale of domestic natural rubber cultivation, deepen production capacity cooperation with major Southeast Asian producers, and promote the domestication of key raw materials, thereby establishing a diversified raw material supply system. We will accelerate the research and industrialization process of sustainable and renewable materials, support the technological breakthroughs in using renewable resources such as corn starch to produce bio-based rubber, and reduce reliance on petroleum-based rubber materials. We will also build strategic reserve bases for key raw materials for natural rubber and synthetic rubber to ensure supply security.
Second, break through the technical bottlenecks in the midstream, optimize production capacity and industrial layout. Promote intelligent transformation of processing enterprises to enhance production efficiency, reduce unit energy consumption, and guide production capacity to concentrate in high value-added fields; establish collaborative centers in industrial clusters such as East China, South China, and Northeast China, and build a short supply chain model of "direct procurement from the source - local processing - regional distribution" to reduce logistics costs; formulate industry clean production evaluation standards, promote low-pollution and low-energy consumption production processes, and accelerate the green transformation of the industry.
Thirdly, we will deeply explore the potential of downstream demand to achieve precise matching of supply and demand. We will focus on upgrading the demand in emerging fields and conduct integrated research and development of "materials - components - terminals". By using tools such as the Internet, big data platforms and AI technologies, we will shorten the development cycle of new products and achieve precise matching of supply and demand. We will also provide customized services and develop specialized products such as materials for low rolling resistance tires, high-temperature-resistant aerospace materials, and medical rubber materials. We will actively expand the rural market and the demand for rubber products in county economies, and fully tap the potential of domestic circulation.
Fourth, establish a full-chain collaborative system to enhance circulation efficiency and resilience. Integrate upstream and downstream resources, build a digital platform covering the entire process of "raw materials - processing - logistics - demand", achieve real-time visualization management of inventory, production progress and logistics status, and improve resource allocation efficiency; improve the domestic logistics network layout to reduce logistics resistance in the domestic circulation; establish an industrial chain collaboration mechanism to promote direct supply of raw materials, shared production capacity, and technical collaboration; formulate unified product standards and quality systems to regulate market competition order.
The fifth point is to strengthen the policy support and guarantee system. Improve the industrial policies for the rubber industry, set up special research funds, and support the research on high-end technologies and alternative materials; implement tax incentives, credit support and other policies to encourage enterprises to carry out intelligent transformation and green development; improve the industry standard system, align with international advanced standards, and enhance the quality level of domestic products; strengthen the construction of talent teams to provide technical and talent support for the domestic large-scale circulation.
