China tyre makers should consider Malaysia as production avenue

Published: 2009/09/28

CHINA-based tyre manufacturers should consider setting up operations in Malaysia. This is to avert the recent punitive tariff of 35 per cent imposed on Chinese-made tyre imports by the US.

"China buys a lot of rubber from Malaysia as raw material to produce tyres there. If manufacturers set up factories and export from Malaysia, they will avoid the impact of the increased tax," the deputy chairman of the Malaysia-China Chamber of Commerce, Liew Choon Kong said in Kuala Lumpur on Saturday.

The decision by the US to impose extra duties on Chinese-made tyres has triggered strong complaints from local tyre companies in the country.

It has also led to China strongly opposing the act of trade protectionism by the US.



According to Liew, if tyres are produced in Malaysia by China-based manufacturers, the specifications would not be categorised as being "Chinese", which would enable the product to enter the US market.

"In this way, it would be cost effective as well, while steering away from the impact of the new US tariffs on Chinese tyres," he said.

Liew said the move will also indirectly open up more business opportunities for Malaysian and Chinese companies to work hand in hand, in view of the current economic environment.

He also urged local food and beverage producers to penetrate the Chinese market as there was more untapped opportunities due to the growing population.

"The Chinese have difficulty getting coffee supplies. So, this is an example of a market Malaysian producers can look at," he said. - Bernama