Exporting Rubber Products to China

The manufacture of pencil eraser ground products such(prenominal)(prenominal)(prenominal) as industrial tyres, tubes, auto helpings and components has been a severalise of Sri Lankas economy since the early 1930s. As one of the largest safetyize producing countries, Sri Lanka produces unalike types, forms and grades of hawkshaw as well as safety ground products for merchandise grocery stores. china accounted 0. 45% of total pecks from Sri Lanka to the serviceman, but on the authoritative course of action its optimistic that chinaware will make up the capability items of exports from Sri Lanka such as arctic products, tea, spices and confectioneries and seafood.mainland chinas demand for safety was expect to rise 8. % tonnes in 2010 to reflect strong conditioning in the outlandishs auto vault of heaven. The exploitation of the auto industry is the briny number one wood for the development of market for condom products in mainland China. The development of highway wind and transportation industry will drive the demand for tyres, engineering rubber products and other rubber products. China consumes 16% of the worlds essential rubber. China has already become the worlds largest rubber aspiration than any other country, estimated statistics illustrate Chinas top rubber consumers position will not be shaken in the period ahead.In recent years, the worlds major rubber companies such as Goodyear, Bridgestone, Michelin and other tire companies subscribe entered China, mass end product of export products. As the emerging economic super power, China take solid foundation for the exporters of rubber products by creating potential market opportunities call up to(p)(p) to its sustained high proceeds in exports of rubber. Many opportunities are on tap(predicate) on improving mete out with China considering the strength of the cordial consanguinity maintained between the dickens countries by continuous dialogue and shell out agreem ents on mutual understanding.It is reasonably appropriate to commend the trade blood between the two countries considering the fact its historical relationship and the monumental development in China who will indisputably become the giant in trade & industry during this century. Chinas membership of Asia Pacific backup discernment (APTA) would provide Sri Lanka access to one of the largest markets in the world. It was becoming more principal(prenominal) as it gave Sri Lankan exporters access to the emerging giant economies in the world such as China, India and South Korea.Rates of utilization of key trade deals such as the Asia Pacific mete out Agreement (APTA) and South Asia shrive Trade Agreement (SAFTA) were low by Sri Lankan rubber exporters. It might be due to exporters are not obtaining certificates of origin from the department of commerce, exporters are not assured of the Free Trade Agreements (FTA) or the importer is not presenting it and getting duty concessions. I ts important to improve exports to China beca intention the potential market for the rubber ground products is enormous.Sri Lankan exporters should make aware of the preferential trade terms between China and Sri Lanka and utilize them in the best possible way to develop the export of rubber products. Recently, Sri Lankan regime has employ trade policies which would further their foreign insurance objectives such as building strong relations with China. Despite Sri Lanka rubber industry being adversely affected by this world crisis, Sri Lanka was able to recover the lost market share and offer its instinctive rubber at a highly competitive rate under these trade agreements.China commenced import of rubber from Sri Lanka in 1951 even before agreements became effective. China extended a remarkable sense of generosity to the people of Sri Lanka in becoming the principal importer of rubber from Sri Lanka. Although exports under APTA have grown, it was still altogether about 50 mill ion dollars worth of goods to China, Korea, India and Bangladesh with about 1,800 certificates of origin issued by the commerce department. Natural rubber and rubber products are one of the main products exported under South Asia Preferential Trading Agreement (SAPTA) and Asia Pacific Trade Agreement (APTA).Under SAPTA also total Sri Lankan exports remains modest. While the Free Trade Agreements do not eliminate import tariffs on rubber, it would hurry to ensure stable cost and supply for China suppliers. The agreement notify encourage Sri Lankan exporters to set up distribution offices in China and fail directly to downstream makers in the country. Southeast Asia is the largest source of rubber in the world, particularly Indonesia, Thailand, Vietnam and Malaysia.All of these countries are huge competitors from the Sri Lankan perspective. The feeling of output from the area is good and stable as well. China, on the other hand, is the largest global manufacturer of tires and Ch ina requires at least 60% of natural rubber used for the industry is currently sourced overseas. There would be a potential market not only for rubber products but also for natural rubber for the exporters of Sri Lanka. Chinas rubber market has maintained rapid consumption growth and well-off growth patterns remains unchanged.If Sri Lankan rubber producers seek the markets available in the world such as China and build international competitiveness in the industrial rubber products, it would help Sri Lanka to raise national income and create jobs in the particular sector. Rubber industry helps to utilize underemployed labour resources because it inescapably intensive labour resource and it is also kind of forest rehabilitation. Sri Lanka could skunk from exporting of long lived forest products to relatively short lived forest products such as rubber.Sri Lankan rubber products manufacturing industry could achieve remarkable progress with the use of novel technology and sophisticat ed production facilities. In tandem with the increase in rubber consumption in China, the corresponding increase in the volume and quantify of exported rubber products has grown significantly. Factors of rapid growth of Chinas rubber consumption * Rapid economic intricacy As China is at present stage of heavy industrialization at that places a vast need of rubber based products for the thingumabob manufacturers, automobile companies and various other industries.Major economic indicators such as Gross Domestic Product (GDP), Industrial Production annual growth rate, Fixed Asset Investment Growth Rate and annual growth rate of China demonstrate the potential opportunities available in China. * Automakers have been strong. Theres a rapid growth in vehicle production with the improvement of peoples income levels, middle class expansion of automobile consumption. * Dramatic increase in the road traffic magnification of the economic output, the acceleration of urbanization, domestic and foreign trade and enhanced received of living has increased the road traffic significantly in China. tidy increase in road traffic is a direct remark to the major rubber product, industrial tyres. RECOMMENDATIONS AND CONCLUTION 1. It s necessary for private sector to develop and add more value on their rubber based products so as to improve their competitiveness in the Chinese markets as well as to make the best use from the abundant natural rubber in Sri Lanka. * In position to improve their competitiveness, producers of rubber products should develop and enhance their human resources skills, improve their production process to be more efficient and produce higher quality rubber products. In addition, Sri Lankan firms should boil down more attention on inquiry and development (R&D) to enhance and climbing their products to be a higher quality in order to control product standards and requirements in China. * The most important fact is that producers, suppliers and relat ed institutes (Research Institutes, examen laboratories and so on) should hold hands to form a cluster in order to help and support each other in the incorporated supply chain.2. To improve the quality of rubber products to export to China, the producers should study and give birth good understanding on Chinas compulsory standards and recommended standards. 3. forwards exporting to China, the exporters should study and have a good understanding of the current situation in the Chinese rubber markets, the transportation and logistics system in China, regulations and other related policies of the Chinese Government and Chinas committedness in the WTO as well as Chinas FTA agreements with Sri Lanka.4. Be cautious of selecting business organisation or trade partners, and select one with potential and credibility. The exporters should emphasize on building close relationships with their Chinese partner to earmark for smooth business operations. Connections are one of the most import ant business customs in China and other social and cultural aspects allow joining a meal together and gift giving using two hands as it demonstrates sincerity and intention between two parties. The system of Chinese networking is heavily focused on personal relationships. . The Government of Sri Lanka should encourage public and private sector to add more value on natural rubber, which are abundant in Sri Lanka in order to produce processed rubber products by financially supporting the rubber industry, providing technical and other assistance, developing the human resources, conducting more researches on rubber products as well as encouraging rubber producers to improve the quality of Sri Lankan rubber products to meet the required standards in oreign markets, particularly in China and other foreign countries.6. The Sri Lankan Government should financially support and establish the research and testing laboratories as well as Sri Lankan researchers and specialists to improve the p roduction processes and conjure higher standards of Sri Lankan products, including the equipment, machinery and innovation to produce new hi end products. . When taking into consideration fundamental factors such as size of economy, size of race and size of domestic market, it seems that Sri Lanka is not in a position to deal with China. Therefore, its necessary to adapt strategic approaches to co exist with China, particularly to be part of Chinas economic growth rather than to explicitly compete with China.Therefore, we suggest the Sri Lankan Government to implement the Rise with the Dragon strategy, in terms of trade and investment in order to be part of Chinas production and consumption processes. The export of rubber products to China would be economic growth driven international business to Sri Lanka. As Rubber fall under the main export categories of Sri Lanka, we have a potential of developing the quality of rubber products and theres a vast opportunity exists in China f or Sri Lankan Rubber Products.