In 2006, the national economy still maintained rapid and sustainable development in China, and the GDP amounted to RMB 20.9407 trillion, up 10.7% year-on-year. The rubber industry is the key part in the industry economy in China, the industrial output value of which accounted for 1.31% in GDP in 2006.
The total industrial output value of rubber industry amounted to RMB 273.286 billion in 2006, up 24.08% year-on-year; the sales revenue reached RMB 269.842 billion, rising 26.85% from a year earlier.
The economy operation of the rubber industry was not good in 2006, the whole industry profitability dropped and, the development pace slowed down, but the operation capability was strengthened gradually. The main reason of the profitability drop is the rapid growth of the natural rubber and synthetic rubber price, which led to the cost increase, while the increase space for the price of the rubber products was limited. The automobile industry entered the adjustment period, and the rubber product demand growth tended to slow down, so the profit space of the rubber industry was decreased, in addition, the export became worse as well, which lead to the rubber products sales growth rate tended to be slow.
The macro economy increased steadily in 2007, the Rubber Industry Association made its own development plan, the industry strengthened the self-discipline, and the government also reduced the tax of some rubber products, all of the favorable factors will decrease the rubber industry risks. In addition, the cost increased, competition became fiercer, and the export environment became worse, all of the negative factors will increase the risks of the rubber industry. In all, the risks of the rubber industry are increasing.
The economy operation of the rubber manufacturers in 2006 showed that the profit of the small-size enterprises was good, while it was relatively poor for the large-size enterprises. In addition, the profitability of the private companies was good, and it was not good for the foreign-funded, and Hong Kong, Taiwan and Macau-invested companies; and the profitability of the non-rubber tyre manufacturers was good, while it was a bit poor for the rubber tyre manufacturers.