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Synthetic rubber, which is derived from the internet, is a highly elastic polymer synthesized artificially. It is made from coal, petroleum, and natural gas – materials that are inexpensive and readily available. There are many types of synthetic rubber, and it is possible to produce variants with specific properties such as heat resistance, cold resistance, wear resistance, oil resistance, and corrosion resistance, to meet the needs of industry and public transportation. As a result, the total global production of synthetic rubber has now far exceeded that of natural rubber. Synthetic rubbers mainly include cis-butadiene rubber, styrene-butadiene rubber, neoprene, nitrile rubber, etc. Based on the manufacturing process, rubber products can be divided into thermoplastic rubbers and vulcanized rubbers ； Based on their finished state, they can be classified into liquid rubber, solid rubber, powdered rubber, and latex. The synthetic raw rubber possesses good elasticity, but its strength is insufficient; it must be processed before it can be used. The processing steps include plasticization, mixing, molding, and vulcanization. China’s rubber industry started late; in 1949, the country’s total rubber consumption was only 13,000 tons, with only 200 tons of natural rubber produced domestically. The development of synthetic rubber began in the early 1950s. In 1958, the first industrial production facility for neoprene was established in Sichuan; in 1959, a production plant capable of producing 10,000 tons of styrene-butadiene rubber was set up in Lanzhou. After 1960, plants for producing butadiene rubber were built, and after 1971, large-scale and specialized rubber production facilities were established in Beijing, Shanghai, and other places. In 1984, China’s rubber consumption reached 610,000 tons, ranking it fourth in the world, of which 34.4% was synthetic rubber. Rubber is an essential material for manufacturing airplanes, warships, cars, tractors, harvesters, irrigation machinery, medical devices, and more. Depending on the source, rubber can be divided into natural rubber and synthetic rubber. Synthetic rubber is a polymer synthesized from petroleum and natural gas using dienes and olefins as monomers; its production began in the early 20th century, and it experienced rapid development starting from the 1940s. Synthetic rubber generally does not have as comprehensive performance as natural rubber, but it possesses properties such as high elasticity, insulation, airtightness, oil resistance, and resistance to high or low temperatures; as a result, it is widely used in industry, agriculture, national defense, transportation, and daily life. Characteristics of China’s synthetic rubber market: 1. The consumption ratio of synthetic rubber is low, offering significant room for growth. Compared to the global average consumption rate of 61% for synthetic rubber, China’s consumption rate is much lower, at around 45%. A survey conducted in 1998 among 16 major domestic tire manufacturers showed that the average usage rate of synthetic rubber was only 40%. In the industries producing cloth-covered shoes and rubber-soled shoes, the consumption rate of synthetic rubber is even lower, at 20–40% and less than 20% respectively (compared to 70–100% and 30–40% abroad). 2. Imported synthetic rubber accounts for a large share of the domestic market, leading to a decline in the self-sufficiency rate of domestically produced synthetic rubber. China has always been a net importer of rubber; since the 1980s, imports have shifted from natural rubber to synthetic rubber as the main type imported. In the 1990s, China’s imports of synthetic rubber surged sharply, rising from less than 50,000 tons in 1989 to 740,000 tons in 1998. The share of synthetic rubber in total imports and in foreign exchange expenditure increased to 49% and 43% respectively, and rose to 50% and 51% in 1997. In 1998, imported synthetic rubber accounted for 52% of total imports. Import volumes of natural rubber reached a record high of 420,000 tons in 1988, accounting for 90% of total imports that year; thereafter, import volumes declined. In 1995, they rose again to 550,000 tons, but the proportion dropped to 60%. After that, imports of synthetic rubber surpassed those of natural rubber. China’s synthetic rubber production has increased by over 90% in the past 7 years, yet its self-sufficiency rate in this area has declined, dropping from 91.6% in 1990 to 58.9% in 1997. Statistical data show that China’s synthetic rubber production was 604,000 tons, with imports amounting to 453,000 tons and exports at 31,000 tons; the apparent consumption level was 1,026,000 tons. 3 Rubber products see rapid export growth: Along with the increase in rubber imports, China’s import and export trade in rubber products has also grown significantly. According to statistics, China’s exports of rubber products (excluding footwear) increased from 150 million US dollars in 1989 to 880 million US dollars in 1997, while imports rose from 50 million US dollars to 330 million US dollars. The trade surplus increased by $450 million. Additionally, as the shoe-making industries in Taiwan, **, and South Korea shifted to the coastal areas of our country, the export volume of various types of shoes exceeded 3 billion pairs in 1997. The value of shoe exports rose from $1.1 billion in 1989 to $8.5 billion in 1997. During the same period, imports related to the shoe industry increased by $360 million, resulting in a net increase in the trade surplus of $7 billion. Imports of tires related to vehicles increased from $1.44 billion in 1989 to $1.9 billion in 1997, while exports rose from $300 million to $2.16 billion. As a result, the trade deficit decreased from $1.14 billion to a surplus of $214 million. In our country, there is still a shortage of natural rubber and synthetic rubber domestically, with very little being exported. Since 1997, of the 900,000 tons of rubber imported nationwide, 570,000 tons were imported under the guise of processing with imported materials – accounting for over 63% of the total; 450,000 tons were imported as synthetic rubber. Only 50,000 tons were imported through regular trade for domestic consumption, representing 14% of the total. As for rubber products intended for export (excluding those made from domestic rubber), the estimated amount of raw rubber required, based on consumption standards, is only 300,000 tons. Therefore, in 1997, at least 300,000 tons of rubber imported under the guise of processing with imported materials were converted into rubber products and put directly into the domestic rubber products market. The self-sufficiency rate for 4 types of general-purpose rubbers is high, while non-general-purpose rubbers rely entirely on imports to meet demand. 40% of China’s synthetic rubber market is occupied by imported products; among the synthetic rubber imports in recent years, non-general-purpose synthetics such as SBS account for only half of the total, while the two major general-purpose rubbers (styrene-butadiene and butadiene rubber) account for about 1/4 of the total. Other types of rubber with special properties and uses account for 1/4, and there are significant differences in the level of self-sufficiency among these various types of rubber. The self-sufficiency rates for the two most commonly used types of rubber are relatively high: the self-sufficiency rate for styrene-butadiene rubber is over 90%, while that for butadiene rubber is around 70%. The self-sufficiency rates for the other types of rubber are much lower. At present, EPDM and butyl rubber are entirely dependent on imports. 5 The rubber consumption market is mainly concentrated in the southeastern part of China. At present, China’s rubber processing plants are primarily located in the economically rapidly developing regions of East China and Central-South China. Together with the shoe manufacturing industry, which uses a large amount of glue and has its rubber products sector concentrated in coastal areas as well, it is estimated that the consumption of raw rubber in the East China and Central-South China regions accounts for over 70% of the total. 6 Changes in the rubber consumer base: The situation in which state-owned enterprises dominated rubber processing has changed. With the establishment of market mechanisms, enterprises funded by foreign capital, groups, and individual businesses have seen significant growth. In the domestic tire manufacturing industry, which consumes the most rubber, joint-venture and wholly-owned enterprises have developed greatly. In 1998, 20 million agricultural tires were sold nationwide; the 61 designated manufacturers produced only 5 million tires to supply China’s large agricultural machinery factories, accounting for just 1/4 of the total volume. Three-quarters of them (15 million units) were primarily produced by township enterprises. There are over a hundred agricultural tire manufacturers alone in Shandong Province. The annual global production of shoes has reached 10 billion pairs, of which about 40% is sold in international markets. Shoe products have become a strong international commodity, with over 80% of China’s shoe production and foreign exchange earnings coming from wholly-owned, joint-venture, or individual enterprises. International shoe materials are evolving rapidly, with the overall trend being an increasing use of synthetic materials. In the case of sole materials, which are used in the largest quantities, there is now a situation where five different types coexist: leather, rubber, rubber-plastic blends, thermoplastic elastomers, and plastics. In our country’s rubber footwear market, the usage rate of synthetic rubber is relatively low, being less than half that of foreign countries. In recent years, a large number of joint ventures have also emerged in the industry of rubber products for automobiles and other rubber products.