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Trade - Editor, 12 November 2007

Profitable China Business Tears (Part 1)



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It may seem incredible, but tears can mean profitable China business! The tears should not be from human eyes, but from the supple stems of rubber trees. The latter can yield valuable rubber from the age of 6 to well over 60. Modern technology can develop vegetative matter with superior sap properties, and regular re-planting is integral to high yielding rubber plantations in any case.

Though some countries have focused on synthetic rubber because they lack the right land and climate resources, Brazil has set an example by taking both synthetic and natural rubber production forward. The South American giant has set a worthy example for anyone with an interest in China business to follow. Huinan, with its extensive area under rubber plantations, and a free trade zone as well, is a top prospect for China business projects based on rubber.

Condoms and automobiles may seem to be as similar as the proverbial chalk and cheese, but they share a strategic dependence on rubber, as far as China business is concerned. The demand from the automobile industry is largely for tires, but there are significant quantities used in linings and a number of parts. Concerns over the spread of sexually transmitted viral diseases, and the imperative to control global population growth, provide durable supports for rubber demand. Besides, automobile sales in India and China grow rapidly, apart from the distinct trend in the first world towards new models with hybrid engines. Rubber is also used for footwear, which provides a large consumption base for new and modern plantations. Overall, rubber production has a number of applications. It presents an excellent China business opportunity, whether limited to the raw sap, or forward integrated in to finished products.

Unique Risks and Opportunities of China Business in Rubber

China is not new to rubber plantations and use. Yet, new China business opportunities in this sector abound. One major reason is the vast consumption levels of rubber products, not just in China, but in neighboring Japan as well. Japan has turned largely to synthetic rubber, but there is always scope to develop stable demand for natural rubber as well. There are also many countries in the Asian and African regions where potential demand levels for rubber footwear are high. Though new plantations will not yield sap for the first 5 years, few commodities have such assured outlets for manufactured products as natural rubber. The demand covers all countries and a number of diverse sectors as well.

Profitable China Business Tears (Part 2)

Trade

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