Booming Chinese tire exports signal resilience in foreign trade recovery

2023-08-15 08:56:32Global Times Editor : Li Yan ECNS App Download

Chinese tire exports maintained strong momentum in the first half of this year, forecasting a promising outlook for China's export sector, official data showed.

Despite the prevailing global economic uncertainties and trade tensions, Chinese tire manufacturers have managed to stay competitive and demonstrate their unwavering determination in the international market.

This sustained growth in tire exports not only reflects the confidence of Chinese exporters but also underscores the effective support and measures implemented by the Chinese government to bolster the country's export industries.

In the first half of 2023, China's cumulative tire exports increased by 13.7 percent year-on-year in terms of quantity and 19.9 percent year-on-year in terms of export value, offering a bright spot of China's overall export performance.

Exports star

Multiple tire companies interviewed by the Global Times said their foreign trade orders are "in high demand" as the export market remains buoyant. Factors such as global demand recovery, lower shipping prices, and decreased raw material costs have driven the robust performance of tire exports this year.

Li Xiaohui, a sales representative from GoodRun Tire in North China's Tianjin Municipality, told the Global Times on Monday that GoodRun's overall sales performance this year has been quite good, with a sales increase of around 30 percent compared to the same period last year.

"The market outlook is expected to be favorable. Many of the orders in the first half of this year were compensating for the previous year's shortfall due to the pandemic," Li said.

Sentury Tires, a tire manufacturing company headquartered in Qingdao, East China's Shandong Province, also said that the tire export situation this year was ahead of expectations.

"Since the beginning of this year, the demand for orders has far exceeded our production capacity. We are racing to increase our production capacity to meet the demand," Jin Shengyong, Sentury Tires' company director, told the Global Times on Monday.

It is expected that the export orders will remain robust in the second half of this year after some unfavorable factors that affected exports in the past have been eliminated, Jin said.

Raw material prices stabilizing at a relatively low level, an overseas destocking period drawing to a close, and shipping returning to more functional levels have all contributed to China's tire industry entering an upward cycle, and the entire industry is optimistic about this year's sales prospects, Jin noted.

In the first half of the year, China's tire-making hub, Dongying city in East China's Shandong Province, exported rubber tires worth 11.22 billion yuan ($1.54 billion), a year-on-year increase of 21.6 percent.

Among them, trade with countries and regions along the routes of China-proposed Belt and Road Initiative (BRI) reached 6.78 billion yuan, a year-on-year increase of 49.9 percent, according to Dongying customs data.

Jin said that Chinese tires have been selling very well overseas and remained competitive, mainly because the Chinese products are priced lower than world's top-tier brands while still offering good value for money and quality.

China's foreign trade grew by 0.4 percent year-on-year in the first seven months of 2023 to 23.55 trillion yuan, according to data from the General Administration of Customs.

In July alone, China's foreign trade reached 3.46 trillion yuan, down 8.3 percent year-on-year. Exports dropped 9.2 percent year-on-year to 2.02 trillion yuan due to declining overseas demand.

Resilience in export recovery

Experts believe that the pressure from external demand on China's exports may gradually be eased in the second half of the year.

The advantages of the entire industrial chain, diversified trading partners, and continuous optimization of export structure will provide certain support for China's export market share, Wu Chaoming, deputy head of the Hunan-based Chasing Research Institute, told the Global Times on Monday.

Wu said China's industrial and cost advantages provide support for domestic export market share.

Additionally, China has continuously diversified its trading partners and optimized its trade structure, effectively enhancing its ability to cope with global supply chain and market fluctuations, which may also support its export market share, Wu said.

According to Jin, the export of tires accounts for approximately 85 percent of his company's total sales, with the Europe and US being its major overseas export markets.

Due to the downward pressure on the European and American economies, consumers have downgraded their consumption and are more inclined to choose high-quality Chinese tire products with better cost performance, Jin said.

Chinese authorities have ramped up government support to boost foreign trade, including strengthened support to reduce the burden for private companies and improving import and export clearance efficiency, which experts said would further accelerate the recovery of China's export in the second half.

Many localities have issued measures aimed at stabilizing foreign trade in the third quarter.

For example, South China's Guangdong Province on Thursday introduced 20 measures to support foreign trade, focusing on improving import and export clearance efficiency. Central China's Hubei Province also issued 17 measures to boost foreign trade and vowed to reduce the customs clearance cost by more than 10 percent.

The latest research data from China Council for the Promotion of International Trade showed that 75.1 percent of Chinese foreign trade enterprises have "stable" or "relatively confident" expectations for development in the third quarter of this year.

"The accelerated recovery trend of overseas demand is already reflected in our monthly orders, which are in high demand and exceed our supply capacity," Jin said. "We are confident in the export market for this year and the next."

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