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Chinese Tyre Factories Reduce Production Due to Power Shortage


For the first time, China's Reform and Opening Up policy, introduced in 1978, permitted private power generation companies and foreign investment. In the past three decades, China's economy has responded with sustained economic growth of more than 10 percent, which has increased China's gross domestic product 15-fold. Today, the global community is leading China's economic growth.

The white-hot economy in China requires ever-increasing quantities of reliable electricity. (See "China: A World Powerhouse," July 2010, for an overview of China's growth in demand and power generating resources.) For the past decade, the central government's focus has been on building all-technology new plants and improving the infrastructure of power distribution. In response, over the past five years, China's installed power generation has almost doubled, aided by significant private investment (see "China's 12th Five-Year Plan Pushes Power Industry in New Directions," January 2012). In response, China's installed power generation has almost doubled. Further reforms have been proposed in the power sector that will encourage continued private investment (see "China's Power Generators Face Many Business Barriers," October 2012).

China has suffered three periods of nationwide power shortages since 1978, which have severely limited its economic and social development. Due to two very disruptive national shortages experienced during 1978-1996 and 2003-2006, lagging generating capacity development was the cause. China has experienced a period of inefficient overcapacity with many redundant plants after large-scale investment in new generating capacity. The oversupply period was unfortunately short-lived, as national power shortages resumed in 2008 and continue today, although for institutional reasons this time. In China, "hard shortages" are called the first two power shortages; the current shortage is known as a "soft shortage."


In 2018, the Chinese tire industry, the global powerhouse in tire manufacturing and consumption, had one of the most difficult years in recent history.

In 2018, the Chinese tire industry, the global powerhouse in tire manufacturing and consumption, had one of the most difficult years in recent history. The industry was very hard hit by slumping domestic demand and U.S. sanctions.

In 2018, the Chinese tire industry had to undergo a slowing economy, more stringent inspections of safety and environmental protection carried out across the country's tire factories, and fluctuations in the price of major raw materials, as well as uncertainties in the world's geopolitical and economic situation.

Over the past few years, a number of mid-sized and smaller tire producers in China have been squeezed by rapidly changing domestic market demand dynamics, tariff barriers in export markets, and rising raw materials and labor costs. On the other hand, government-driven supply-side reform requirements, environmental legislation, and supply-side and industrial reforms are making it harder to survive for these smaller businesses.

In China, Shandong Province is home to more than 300 producers of small and medium-sized tires. Thirty-five tiremakers in the province were shut down from 2017 to August 2018 and declared bankruptcy.

Dubbed as the tire capital of China, Dawang Town in Shandong Province, home to a large number of tire manufacturers, is in very bad shape. A number of mid-and small-scale tire manufacturers were forced out of business in the city. In addition to a number of mid-and small-scale tire producers, the town is home to forth major tire makers, namely Shandong Hengyu Rubber Co, Shandong Hengfeng Rubber & Plastic Co.,Ltd., Shandong Jinyu Tire Co., and Shandong Yongtai Group.

Over the past couple of years, a number of mid-sized and smaller tire manufacturers in China have been squeezed by changing domestic demand dynamics, tariff barriers in export markets, and rising raw materials and labor costs.

In addition to being the major driver of the Chinese tire industry, China's automotive market has been one of the most reliable drivers of global growth for decades. That might all be coming to an end, however. In 2018, the largest vehicle market in the world saw its first annual drop in automotive manufacturing and sales. This was the first fall in the last 20 years in Chinese automotive production. In 2018, sales in the country fell 6 percent to 22.7 million units, according to data from the China Passenger Car Association (CPCA).

In recent years, a number of Chinese tire manufacturers have opted to set up manufacturing plants abroad, with the number of overseas plants increasing steadily. Meanwhile, most of China's overseas investment in the tire industry flowed to other Asian countries a few years ago. But, in the last three years, the U.S. and Europe have become Chinese tire producers' favorite manufacturing destinations.


As we know, there are over a hundred tire factories in China, and in Dongying City, Shandong Province, China, 50 percent of the tire factories are located. So people always say the home of Chinese tire factories in Dongying City.

During the last two years, Chinese tire factories have experienced high-speed growth, China has become the world's big tire manufacturer, besides, tire factories are more important taxes for local government, and banks have already provided many loans to local tire factories before, which is why the local government pays more attention to tire factories that are in bad circumstances.

The following are important in the manufacture of tires:

Electrically conductive: The graphitized CB is ideal for the manufacture of conductive fillers added to plastic elastomers, paints, adhesives, films, and pastes, as well as to electroconductive inks and slurries. Antistatic rubbers are essential for automotive applications.

Applications of power source: As the cathode mix, AB is an important constituent for zinc-carbon batteries. It works not only to give the cathode mix electroconductivity but also to reserve electrolyte liquid. It is also used for some secondary batteries, including Li-ion batteries, as the conductive additive for the cathode mix.

In the absence of this, tire processing or multiplication will be on the low side.


A massive amount of engineering goes into making a tyre, much of which is invisible; with any random tread pattern slapped on, they are far more than just rubber doughnuts.

The compound is the 'Black Magic,' as it is called.

This influences everything from how a tire works under varying situations to how long a tire lasts and in whatever way it’s been looked at, electricity is a major part of the manufacturing.

In its absence, manufacturing would be at a low rate.