China, the world's largest consumer of natural rubber, is facing serious supply risks as its self-sufficiency rate has dropped below 30%, falling well below the internationally recognized safety threshold. This critical situation puts the entire rubber industry at significant risk, as over half of the raw materials used in China’s rubber sector come from natural rubber. If global supply chains are disrupted or if foreign sources become unreliable, the domestic industry could face a major crisis.
Since 2003, China has been the top global consumer of natural rubber, yet its self-sufficiency ratio has steadily declined since 1998. In 2004 alone, China consumed 1.8 million tons, while domestic production was only 570,000 tons—less than one-third of total demand. The situation worsened last year due to typhoons that hit Hainan, the country’s main rubber-producing region, further lowering output and pushing the self-sufficiency rate below 30% for the whole year.
Natural rubber production in China is heavily constrained by land availability. Only a small portion of the country, mainly in Hainan, Guangdong, Yunnan, and Guangxi, is suitable for rubber cultivation, with a total planted area of about 10 million mu. The long growth cycle of six to seven years discourages large-scale investment, leaving most planting and harvesting to state-owned farms and small-scale farmers. However, these smallholders often lack the technical expertise needed to produce high-quality rubber, leading to low yields, poor quality, and significant waste. Their productivity is 25% to 40% lower than that of state farms.
Moreover, natural rubber is highly vulnerable to weather conditions such as typhoons and droughts. Without clear national industrial policies to support development, Chinese companies struggle to access overseas rubber resources. Meanwhile, key producers like Thailand, Indonesia, and Malaysia are tightening control over their exports and forming international alliances to stabilize prices. These countries, along with Vietnam and India, account for 90% of global natural rubber exports. Some nations, including Japan, are even offering financial incentives to companies that invest in overseas rubber production.
Given these challenges, industry leaders argue that "going out" — expanding into international markets and securing overseas resources — is not just an option but a necessity for ensuring China’s long-term rubber security.
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