Introduction: In recent years, China’s imports of natural rubber from Laos, Myanmar and Cambodia have exceeded 600kt, with Yunnan Province being the main importing province. From December 1, 2024, China implemented zero tariff for 100% of tariff items originating from the least developed countries that have established diplomatic relations with China. The main producing countries of natural rubber involved included Laos, Myanmar, Cambodia. The zero tariff policy will directly reduce the import costs of standard rubber and smoked sheet rubber. With the smooth issuance of online certificates of origin in the future, the declaration procedures will be further simplified, and China’s import volume of natural rubber from Laos, Myanmar and Cambodia is expected to increase gradually.

Myanmar and Laos were the main importers of China’s natural rubber, with imports exceeding 600kt.

Since 2022, the volume of natural rubber imported from Myanmar has exceeded 300kt, and that from Laos is between 250kt and 300kt. The import volume from Cambodia is between 10kt and 20kt.

On the one hand, due to geographical limitations, China’s natural rubber output is insufficient and it relies heavily on imports. Laos and Myanmar are close to China, with short transportation distances and low transportation costs. In addition, with the opening of the China-Laos Railway, transportation efficiency has been greatly improved, allowing natural rubber to quickly enter the Chinese market. On the other hand, the Golden Triangle region has implemented alternative planting projects, and planting crops include fruits, vegetables, tea, rubber, etc. Chinese enterprises are actively developing rubber planting and processing industries in Laos and Myanmar, and have ensured a stable supply of natural rubber by cooperating with local enterprises or directly investing in plant construction. The quota for alternative plantations in China from Laos and Cambodia is 300-340kt each year, and the alternative plantations are exempt from both VAT and tariffs, which has greatly solved the problem of insufficient feedstock supply in Yunnan Province and also reduced import costs.

In the first 11 months of 2024, the import volume of natural rubber from Laos and Myanmar increased by more than 20% YoY, with Yunnan being the main importing province.

From January to November 2024, China imported 344.5kt of natural rubber from Myanmar, an increase of 61.2kt or 21.6% YoY, the highest level in the same period in history. From January to November 2024, 287.4kt of natural rubber was imported from Laos, up 71kt or 32.81% YoY. During the same period, 14.6kt of natural rubber was imported from Cambodia, a slight increase of 0.3kt or 2.1% YoY.

Among the places where natural rubber was imported from Laos in the first 11 months, Yunnan Province imported 218.8kt of natural rubber, accounting for 76% of the total and ranking first. Shandong Province imported 28.8kt of natural rubber, accounting for 10% of the total and ranking second. Zhejiang Province and Hunan Province imported 15.2kt and 9.8kt of natural rubber, ranking third and fourth respectively. Among the places where natural rubber was imported from Myanmar in the first 11 months, the import volume in Yunnan Province was 208.2kt, accounting for 60% and ranking first, and that in Shandong Province was 104kt, accounting for 30% and ranking second. The import volume in Hunan Province and Zhejiang Province was 9.9kt and 6.6kt, ranking third and fourth respectively.

Standard rubber and mixed rubber were the main types of imported natural rubber, and the zero tariff policy directly reduced the import cost of standard rubber and smoked sheet rubber.

China mainly imported standard rubber and mixed rubber from Laos. By November 2024, China imported 179.8kt of standard rubber from Laos, accounting for 63%, and 107.7kt of mixed rubber was imported, accounting for 37%. China’s main imports of natural rubber from Myanmar were mixed rubber, standard rubber and smoked sheet rubber, with the import volume of 140.4kt, 133.2kt and 70kt, accounting for 41%, 39% and 20% respectively.

The Tariff Commission of the State Council announced that in order to expand unilateral opening to the least developed countries and achieve common development, starting from December 1, 2024, a preferential tariff of zero would be applied to 100% of the tariff items originating from the least developed countries that have established diplomatic relations with China. Among them, the tariff quota products would only enjoy the zero tariff within the quota, and the tariff rate outside the quota would not change. The least developed countries included 33 countries in Africa, 8 countries in Asia, and 2 countries in Oceania. The main producing countries of natural rubber involved included Laos, Myanmar, and Cambodia. According to the China-ASEAN Free Trade Agreement and the RCEP Agreement, the import of natural rubber from the least developed countries was originally subject to an import tariff of 20% at the most-favored-nation rate. After the implementation of the zero tariff policy, the import of natural rubber produced in Laos, Myanmar and Cambodia will be tariff-free, which can directly reduce import costs.

The quota for alternative plantations (annual quota of 300-340kt) of natural rubber imported from Laos and Myanmar was exempt from both tariffs and VAT, and a tariff-free policy was implemented on imported mixed rubber. Therefore, the zero tariff policy will have a more direct impact on reducing the import cost of standard rubber and smoked sheet rubber.

From December 2024, tariff-free natural rubber was gradually cleared and entered the Chinese market.

According to SCI, from mid-to-early December 2024, there were sporadic one or two batches of zero-tariff natural rubber imported from Myanmar that were cleared through Qingdao Customs and entered the Chinese market. The rubber type was mainly smoked sheet rubber. As of December 30, the intended sales price of Myanmar’s smoked sheet in the Shandong market was RMB 18,500-18,800/mt. In late December, it was heard that a small amount of natural rubber produced in Laos was successfully cleared through the Mohan Port under the supervision of Mengla Customs under Kunming Customs, and the smoked sheet rubber produced in Myanmar was also successfully cleared from Haikou Port.

With the smooth issuance of online certificates of origin and further simplification of declaration procedures, the import volume of natural rubber in China is expected to increase gradually. With the increase of imports in the future, the supply in Yunnan will be supplemented, which may cause fluctuations in local market prices in the short term. At the same time, natural rubber producers in Yunnan will face new opportunities and challenges. In addition, for China’s domestic downstream enterprises, the zero tariff policy is conducive to reducing import costs and increasing the diversity of rubber types used by downstream enterprises.