China is the world’s largest consumer of rubber, and growth in the use of compound rubber – a substance containing 99% natural rubber but attracting 15% less tax than its pure 100% counterpart – is colossal, Tyres & Accessories reported.

This year the country is expected to import 950,000 tons of compound rubber, a leap of almost 71% from last year. Many rubber exporters in Thailand, Indonesia and Malaysia are now focusing on producing compound rubber more to take advantage of China’s import duty structure. "Compound rubber import volume was increasing in recent years because the customs tax was lower than [for] natural rubber," the China Rubber Research Institute said in a report prepared for an international conference in Vietnam.

China now consumes 16% of the world’s natural rubber. The country is expected to import 6.4 million tons of rubber in total next year, an increase of 8.5%. Some 2.8 million tons of this total will be natural rubber, the remainder synthetic, the China Rubber Industry Association reports. An increase in rubber imports is needed to feed strong growth in China’s automotive sector. The CRIA added that Chinese vehicle production was projected to rise to 12.5 million units this year from 9.1 million in 2008.