Commission Implementing Regulation (EU) 2025/58 of 15 January 2025 imposing a definitive anti-dumping duty on imports of certain pneumatic tyres, new or retreaded, of rubber, of a kind used for buses or lorries, with a load index exceeding 121 originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

Image omitted; see official source	Official Journal of the European Union	EN L series
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	2025/58	16.1.2025

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union ¹, and in particular Article 11(2) thereof,

Whereas:

1. PROCEDURE

1.1.   Previous investigations and measures in force

• (1) On 4 May 2018, the European Commission (‘the Commission’) adopted Regulation (EU) 2018/683 ² imposing a provisional anti-dumping duty on imports of certain pneumatic tyres, new or retreaded, of rubber, of a kind used for buses or lorries, with a load index exceeding 121 (‘tyres’ or ‘product concerned’) originating in the People’s Republic of China (‘PRC’).

• (2) On 18 October 2018 the Commission adopted Implementing Regulation (EU) 2018/1579 ³ imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain pneumatic tyres, new or retreaded, of rubber, of a kind used for buses or lorries, with a load index exceeding 121 originating in the People’s Republic of China (‘the original anti-dumping Regulation’).

• (3) On 9 November 2018, the Commission adopted Implementing Regulation (EU) 2018/1690 ⁴ imposing definitive countervailing duties on imports of certain pneumatic tyres, new or retreaded, of rubber, of a kind used for buses or lorries and with a load index exceeding 121 originating in the People’s Republic of China and amending Implementing Regulation (EU) 2018/1579 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain pneumatic tyres, new or retreaded, of rubber, of a kind used for buses or lorries, with a load index exceeding 121 originating in the People’s Republic of China and repealing Implementing Regulation (EU) 2018/163 (‘the original anti-subsidy Regulation’).

• (4) Following a challenge lodged by China Rubber Industry Association (‘CRIA’) and China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (‘CCCMC’), the General Court of the European Union annulled on 4 May 2022, in its judgement in joined cases T-30/19 and T-72/19 ⁵ (‘the Court judgement’), the original anti-dumping and the original anti-subsidy Regulations as regards several exporting producers.

• (5) Following the Court judgment, the Commission reopened the investigations and on 4 April 2023, the Commission re-imposed a definitive anti-dumping duty by Commission Implementing Regulation (EU) 2023/737 ⁶ (‘the second anti-dumping Regulation’) and a definitive countervailing duty by Commission Implementing Regulation 2023/738 ⁷ (‘the second anti-subsidy Regulation).

• (6) On 6 September 2024, the Commission terminated two partial interim reviews of the anti-dumping and countervailing measures applicable to imports of certain pneumatic tyres, new or retreaded, of rubber, of a kind used for buses or lorries and with a load index exceeding 121 originating in the People’s Republic of China ^8 9.

• (7) The anti-dumping duties currently in force are in euros per item ranging between 0 to 35,74 euros per item.

1.2.   Request for an expiry review

• (8) Following the publication of a notice of impending expiry ¹⁰ the European Commission ('the Commission') received a request for a review pursuant to Article 11(2) of Regulation (EU) 2016/1036 ('the basic Regulation').

• (9) The request for review was submitted on 19 July 2023 by the Coalition against unfair tyres imports (‘the applicant’) on behalf of the Union industry of certain pneumatic tyres, new or retreaded, of rubber, of a kind used for buses or lorries, with a load index exceeding 121 in the sense of Article 5(4) of the basic Regulation. The request for review was based on the grounds that the expiry of the measures would be likely to result in continuation or recurrence of dumping and continuation or recurrence of injury to the Union industry.

1.3.   Initiation of an expiry review

• (10) Having determined, after consulting the Committee established by Article 15(1) of the basic Regulation, that sufficient evidence existed for the initiation of an expiry review, on 20 October 2023 the Commission initiated an expiry review with regard to imports into the Union of certain pneumatic tyres, new or retreaded, of rubber, of a kind used for buses or lorries, with a load index exceeding 121 originating in the People's Republic of China (‘the country concerned’) on the basis of Article 11(2) of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union ¹¹ (‘the Notice of Initiation’).

1.4.   Review investigation period and period considered

• (11) The investigation of continuation or recurrence of dumping covered the period from 1 July 2022 to 30 June 2023 (‘review investigation period’). The examination of trends relevant for the assessment of the likelihood of a continuation or recurrence of injury covered the period from 1 January 2020 to the end of the review investigation period (‘the period considered’).

1.5.   Interested parties

• (12) In the Notice of Initiation, interested parties were invited to contact the Commission in order to participate in the investigation. In addition, the Commission specifically informed the applicant, the known producers in the People's Republic of China and the authorities of the People's Republic of China, the known importers, as well as associations known to be concerned about the initiation of the expiry review and invited them to participate.

• (13) Interested parties had an opportunity to comment on the initiation of the expiry review and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

1.6.   Sampling

• (14) In the Notice of Initiation, the Commission stated that it might sample the interested parties in accordance with Article 17 of the basic Regulation.

Sampling of Union producers

• (15) In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of:

• — The overall representativity in terms of size of the production and sales volume of the like product during the review investigation period;

• — the representativity of tiers ¹² in terms of size of the production and sales volume of the like product during the review investigation period;

• — the geographical spread and the representativity of the Union producers in terms of category, namely between SMEs and larger companies.

• (16) This sample consisted of 6 Union producers. The sampled Union producers accounted for more than 25 % of the estimated total volume of production and sales of the like product in the Union.

• (17) In accordance with Article 17(2) of the basic Regulation, the Commission invited interested parties to comment on the provisional sample. No comments were received. The sample is representative of the Union industry.

Sampling of importers

• (18) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation.

• (19) One unrelated importer made itself known to the Commission but did not provide the requested information nor agreement to be included in the sample. No other unrelated importers came forward.

Sampling of exporting producers in the People's Republic of China

• (20) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all exporting producers in the People's Republic of China to provide the information specified in the Notice of Initiation. In addition, the Commission asked the mission of the People's Republic of China and associations of exporting producers to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

• (21) Three exporting producers or group of exporting producers in the country concerned provided the requested information and agreed to be included in the sample. Two groups of exporting producers covered around 50 % of the reported volume exported to the European Union during the period July 2022-June 2023 while the volume of exports of the third exporting producer was found not significant. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of two groups of exporting producers on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned, and the authorities of the country concerned, were consulted on the selection of the sample. No comments were made.

• (22) In the original investigation, 49 exporting producers agreed to be included in the sample. In the present review investigation while more than 140 exporting producers were listed in the complaint, only 3 exporting producers or group of exporting producers provided a sampling reply.

• (23) The cooperated exporting producers accounted for around 50 % of the total volume of imports of tyres from the PRC into the European Union and accounted for less than 2 % of the total production of tyres in the PRC. As the Union market share of imports from the PRC was around 5,4 % during the review investigation period, the Commission considered that half of these imports would provide sufficient information to assess the export price and the existence of continuation or recurrence of dumping during the review investigation period and can therefore be considered representative of the total imports from the PRC.

1.7.   Questionnaire replies and verification visits

• (24) The Commission sent a questionnaire concerning the existence of significant distortions in the PRC within the meaning of Article 2(6a)(b) of the basic Regulation to the Government of the People’s Republic of China (‘GOC’).

• (25) The Commission sent questionnaires to the two sampled groups of exporters and the six sampled Union producers. The same questionnaire had also been made available online ¹³ on the day of initiation. In addition, the Commission sent a questionnaire to the applicant.

• (26) Questionnaire replies were received from the two sampled groups of exporting producers and from 6 Union producers. The reply received from one Union producer, Recauchutagem São Mamede, Lda (‘RSM’) was deficient and the Commission requested this producer to complement its reply. No further reply was received, and the Commission informed RSM that it intends to apply Article 18 of the basic Regulation and use the facts available. No further comments were received from this Union producer.

• (27) Consequently, the data provided by the remaining 5 union producers was used by the Commission. Not obtaining data from RSM had only marginal impact on the representativity of the sample. The remaining 5 Union producers continued to account for more than 25 % of the estimated total volume of production and sales of the like product in the Union. This remaining sample of 5 Union producers was therefore considered representative of the Union industry.

• (28) No questionnaire replies were received from the GOC.

• (29) The Commission sought and verified all the information deemed necessary for the determination of likelihood of continuation or recurrence of dumping and injury and of the Union interest. Verification visits pursuant to Article 16 of the basic Regulation were carried out at the premises of the following companies:

Union producers

• — Lapin Kumi Oy, Finland

• — RuLa-BRW GmbH, Germany

• — Marangoni S.P.A, Italy

• — two Union producers which requested confidentiality

Exporting producers in the People’s Republic of China

• — Giti Tire (China) Investment Co., (Shanghai); Giti Tire (Anhui) Co., Ltd; (Hefei); Giti Tire (Hualin) Co., Ltd (Hualin);

• — Shanghai Hankook Tire Sales Co., Ltd (Shanghai); Chongqing Hankook Tire Co., (Chongqing) Ltd; Jiangsu Hankook Tire Co., Ltd (Jiangsu).

1.8.   Subsequent procedure

• (30) On 11 November 2024, the Commission disclosed the essential facts and considerations on the basis of which it intended to maintain the anti-dumping duties in force. All parties were granted a period within which they could make comments on the disclosure.

• (31) The comments made by interested parties were considered by the Commission and taken into account, where appropriate. The parties who so requested were granted a hearing. A hearing was hold at the request of Giti.

2. PRODUCT UNDER REVIEW, PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   Product under review

• (32) The product subject to this review is certain pneumatic tyres, new or retreaded, of rubber, of a kind used for buses or lorries, with a load index exceeding 121 currently falling under CN codes 4011 20 90 and ex 4012 12 00 (TARIC code 4012 12 00 10). The CN and TARIC codes are given for information only without prejudice to a subsequent change in the tariff classification (‘the product under review’).

• (33) The product under review covers both new and retreaded pneumatic tyres for buses or lorries which share the same essential physical, chemical and technical characteristics. Both types of the product concerned are made of the same input (even if the technology involved may differ) and have a similar structure. The variance in raw materials and structure impart different performance characteristics.

2.2.   Manufacturing process

2.2.1.   New tyres

• (34) Manufacturing process of the new lorry and bus tyres involves: (1) compounding and mixing rubber; (2) tyre components preparation; (3) (green) tyre building; (4) curing (vulcanisation); and (5) final inspection. All lorry and bus tyres are made from the same basic raw materials, namely natural rubber, synthetic rubber, steel, carbon black, other chemicals and oils as well as fabric and have the same components, namely tread belt, sidewall, inner casing, bead wires, steel belts, casing cords, even if a certain variance is found between the various producers of this product.

• (35) The manufacturing process of the new lorry and bus tyres was also found to involve varying technologies, which, however, did not impact on the overall findings of interchangeability.

2.2.2.   Retreaded tyres

• (36) Retreading is essentially a recycling process whereby worn tyres are refurbished through a replacement of the tread on an old casing. Casings are main elements of the retreading process, and, as such a substantial part of the retreader activity is the selection and acquisition of casings suitable for retreading. Casings are thereby the main input of the production process and constitute — depending on their quality — either a real ‘semi-finished’ product or a waste.

• (37) Again, this process can involve varying technologies without impact on the Commission's interchangeability findings.

2.3.   Uses and types of tyres

• (38) Lorry and bus tyres are produced in a large variety of types and sizes found on a wide range of commercial vehicles, from local delivery lorries and buses in urban or regional settings to the long-haul lorries and buses according to their size and load index specifications. They are neither suitable for use on passenger vehicles or on other light commercial vehicles nor for fully off-the-road vehicles such as agricultural tractors.

• (39) Tyres for lorries or buses are sold in two types and four categories. Tube type tyre is a more traditional option; it has an inner tube, which has its own valve, placed inside the tyre. In a tubeless tire, the tire and the rim of the wheel form an airtight seal, with the valve being directly mounted on the rim. An overwhelming majority of tyres for lorries or buses sold in the Union are tubeless tyres. The four categories of tyres for lorries or buses are: steer, drive, trailer and multi-position. Steer tyres are designed to be used on the front axle to aid with steering but can be used in all positions on the lorries or bus depending on the vehicle's use. Drive tyres are designed for the drive train and provide better traction. Trailer tyres are designed to be mounted on trailers, while multiposition tyres are designed to be used in all in all positions on a vehicle depending on its use.

• (40) Tyres, new or retreaded, are subject to the same safety requirements in the Union market as set out in Directive 2007/46/EC of the European Parliament and of the Council ¹⁴.

2.4.   Segmentation into three tiers of the Union market for tyres

• (41) Information collected and received by the Commission indicates that the Union market for bus and lorry tyres is segmented in three tiers or segments. While there are no clear dividing lines among tiers, there is a general agreement among interested parties and the findings of the Commission on the following categorisation.

• (42) Tier 1 tyres cover premium new tyres with the flagship brand of main manufacturers. Brand recognition is a key factor for tyres in this tier and justifies significantly higher prices for expected high performances as well particularly strong marketing investments. Original equipment for lorries or buses manufacturers (‘OE1’) tyres are primarily included in that tier. The quality of tier 1 tyres ensures a high level of retreadability of the tyres which are designed to be ‘multi-life’ tyres further increasing the significantly higher mileage of the original product (up to three retreading for a normal use). Tier 1 tyres are also associated with a higher level of safety and are often accompanied with a good level of after-sale services.

• (43) Tier 2 tyres cover most non-premium tyres, both new and retreaded tyres, with prices ranging between approximately 65 % and 80 % of the price of tier 1 tyres. Original equipment for trailers manufacturers (‘OE2’) tyres may be included in that tier. Brand recognition remains important in this tier and brands are usually well-known from purchasers which are also able to identify the tyre manufacturers. They are generally retreadable at least once and, although more limited than tier 1 tyres, deliver good performances in terms of mileage.

• (44) Tier 3 tyres cover both new and retreaded tyres with lower mileage performances and very limited retreadability, if any. They are typically priced at less than 65 % of the price and mileage performance of tier 1 tyres. In that tier, brand recognition is almost non-existent and price becomes the determining factor in the customer's decision to purchase. They are usually not provided with after-sale services.

• (45) Retreaded tyres can be classified under tier 2 or tier 3. While some Chinese tyres are retreadable, there is very little retreading performed in China. Retreading is, however, quite widespread in the Union and in other markets, for example in Brazil. The retreading activity in the Union consists of:

• — integrated retreaders acting under the name, brand or mandate of a producer of new tyres. They are seen as the continuation of the brands selling the new tyres. This corresponds to tier 2 tyres,

• — independent retreaders which usually cover much smaller geographical markets and volumes. They sell tyres under their own name or brand and rely on their own expertise. Most of them are SMEs (more than 400 producers in the Union). This corresponds to tier 3 tyres.

• (46) The Commission applied the same mapping of new and retreaded tyres by brand as in the original investigation. This information was also provided by the complainant and was made available to all the interested parties on initiation day.

2.5.   Product concerned

• (47) The product concerned by this investigation is the product under review originating in the People’s Republic of China (‘the product concerned’).

2.6.   Like product

• (48) As established in the original investigation, this expiry review investigation confirmed that the following products have the same basic physical, chemical and technical characteristics as well as the same basic uses:

• — the product concerned when exported to the Union ;

• — the product under review produced and sold on the domestic market of country concerned;

• — the product under review produced and sold by the exporting producers to the rest of the world; and

• — the product under review produced and sold in the Union by the Union industry.

• (49) These products are therefore considered to be like products within the meaning of Article 1(4) of the basic Regulation.

3. DUMPING

3.1.   Preliminary remarks

• (50) During the review investigation period, imports of product under review from the People’s Republic of China continued albeit at lower levels than in the investigation period of the original investigation (i.e. from 1 July 2016 to 30 June 2017). According to Eurostat imports of certain pneumatic tyres, new or retreaded, of rubber, of a kind used for buses or lorries, with a load index exceeding 121 from the People’s Republic of China accounted for about 5,4 % of the Union market in the review investigation period compared to 21,3 % market share during the original investigation. These figures are in absolute terms.

• (51) As mentioned in recital (22), three group of exporting producers from PRC cooperated in the investigation, accounting for around 50 % of the total volume of imports of tyres from the PRC into the European Union.

3.2.   Procedure for the determination of the normal value under Article 2(6a) of the basic Regulation for the imports of product under review originating in the PRC.

• (52) Given the sufficient evidence available at the initiation of the investigation tending to show, with regard to the PRC, the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation, the Commission initiated the investigation on the basis of Article 2(6a) of the basic Regulation.

• (53) Consequently, to collect the necessary data for the possible application of Article 2(6a) of the basic Regulation, in the Notice of Initiation the Commission invited all exporting producers in China to provide information regarding the inputs used for producing tyres. The two sampled groups of exporting producers submitted the relevant information.

• (54) In order to obtain information it deemed necessary for its investigation with regard to the alleged significant distortions, the Commission sent a questionnaire to the GOC. In addition, in point 5.3.2 of the Notice of Initiation, the Commission invited all interested parties to make their views known, submit information and provide supporting evidence regarding the application of Article 2(6a) of the basic Regulation within 37 days of the date of publication of the Notice of Initiation in the Official Journal of the European Union.

• (55) No questionnaire reply was received from the GOC and no submission on the application of Article 2(6a) of the basic Regulation was received within the deadline. Subsequently, the Commission informed the GOC that it would use facts available within the meaning of Article 18 of the basic Regulation for the determination of the existence of the significant distortions in the PRC.

• (56) In the Notice of Initiation, the Commission also specified that, in view of the evidence available, it may need to select an appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation for the purpose of determining the normal value based on undistorted prices or benchmarks.

• (57) On 23 January 2024, the Commission informed by a note (‘the First Note’) interested parties on the relevant sources it intended to use for the determination of the normal value. In that note, the Commission provided a list of all factors of production such as raw materials, labour and energy used in the production of the product under review. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified possible representative countries, namely Brazil, Indonesia, Malaysia, Thailand, Türkiye and South Africa as an appropriate representative country.

• (58) The Commission received comments on the First Note from the applicant, Giti and Hankook.

• (59) On 16 July 2024, and after having analysed the comments received and the additional information provided by Hankook, the Commission informed by a second note (‘the Second Note’) interested parties on the relevant sources it intended to use for the determination of the normal value, with Türkiye as the representative country.

• (60) It also informed interested parties that it would establish selling, general and administrative costs ('SG&A') and profits based on available information for the companies Brisa Bridgestone and Goodyear Lastikleri Turk, producers in the representative country.

• (61) The Commission received comments on the Second Note from the applicant, Giti and Hankook. All the comments are addressed in detail in Section 3.3.

• (62) The Commission therefore concluded that normal value should be constructed using the method set out in Article 2(6a) of the basic Regulation, and that costs and prices in China should be rejected.

3.3.   Normal value

• (63) According to Article 2(1) of the basic Regulation, “the normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country”.

• (64) However, according to Article 2(6a)(a) of the basic Regulation, “in case it is determined […] that it is not appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions within the meaning of point (b), the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks”, and “shall include an undistorted and reasonable amount of administrative, selling and general costs and for profits” (“administrative, selling and general costs” is refereed hereinafter as ‘SG&A’).

• (65) As further explained below, the Commission concluded in the present investigation that, based on the evidence available, and in view of the lack of cooperation of the GOC, the application of Article 2(6a) of the basic Regulation was appropriate.

3.3.1.   Existence of significant distortions

• (66) Article 2(6a)(b) of the basic Regulation states that “significant distortions are those distortions which occur when reported prices or costs, including the costs of raw materials and energy, are not the result of free market forces as they are affected by substantial government intervention. In assessing the existence of significant distortions regard shall be had, inter alia, to the potential impact of one or more of the following elements:

• — the market in question being served to a significant extent by enterprises which operate under the ownership, control or policy supervision or guidance of the authorities of the exporting country;

• — state presence in firms allowing the state to interfere with respect to prices or costs;

• — public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces;

• — the lack, discriminatory application or inadequate enforcement of bankruptcy, corporate or property laws;

• — wage costs being distorted;

• — access to finance granted by institutions which implement public policy objectives or otherwise not acting independently of the state. ”

• (67) As the list in Article 2(6a)(b) of the basic Regulation is non-cumulative, not all the elements need to be given for a finding of significant distortions. Moreover, the same factual circumstances may be used to demonstrate the existence of one or more of the elements of the list.

• (68) However, any conclusion on significant distortions within the meaning of Article 2(6a)(a) of the basic Regulation must be made on the basis of all the evidence at hand. The overall assessment on the existence of distortions may also take into account the general context and situation in the exporting country, in particular where the fundamental elements of the exporting country’s economic and administrative set-up provide the government with substantial powers to intervene in the economy in such a way that prices and costs are not the result of the free development of market forces.

• (69) Article 2(6a)(c) of the basic Regulation provides that “[w]here the Commission has well-founded indications of the possible existence of significant distortions as referred to in point (b) in a certain country or a certain sector in that country, and where appropriate for the effective application of this Regulation, the Commission shall produce, make public and regularly update a report describing the market circumstances referred to in point (b) in that country or sector”.

• (70) Pursuant to this provision, the Commission issued a country report concerning China (‘the Report’) ¹⁵, which contains evidence of the existence of substantial government intervention at many levels of the economy, including specific distortions in many key factors of production (such as land, energy, capital, raw materials and labour) as well as selected sectors (such as chemical, ….). Interested parties were invited to rebut, comment or supplement the evidence contained in the investigation file at the time of initiation. The Report concerning China was placed in the investigation file at the initiation stage. The application also contained some relevant evidence complementing the Report.

• (71) The Applicant relied on the evidence contained in the Report to argue that both the Chinese tyre industry itself, as well as other upstream sectors critical to tyre production, such as rubber, energy, steel as well as the downstream automotive industry, are all severely affected by the GOC's omnipresence, resulting in significantly distorted prices and costs. The Applicant underlines the presence and influence of the CCP over the economy relying on the 2018 "Decision by the Communist Party of China (CCP) Central Committee on deepening reform of Party and State institutions”, speech by the Chinese President at the 20th national Congress of the Communist Party, the 2020 publication by the Central Committee of the CCP of an Order expressly declaring the intention of introducing further State presence in private companies and calling for politically and ideologically educating directors of private companies. The Applicant stated that the GOC's interventionism takes several forms, which can essentially be categorised around three different axes: administrative, financial and regulatory.

• (72) The applicant pointed out that plans are issued at different governmental levels – State, provinces, municipalities – and are completed by sectoral plans. These plans are binding in law, must be implemented at all levels and, as a result, bring very direct implications with them in terms of access to financing, taxation regimes or choices adopted in the companies. It notably referred to the 14^th five years plan (‘FYP’) applicable for the years 2021-2025 on the basis of which it considered that the active role of the State in the economy is clearly apparent through the setting out, for example, of its role to "promote,”"strengthen" or "build" entire segments of the Chinese economy. The applicant concludes that the FYPs further aim to build a stronger connection between the GOC and State-owned enterprises (‘SOE’) and aim to even further increase the system of supervision over State-owned assets. This can take various forms, including the effective prevention of State-owned asset losses.

• (73) The applicant underlines that the Chinese financial system is dominated by the presence of State-owned banks (‘SOB’) which must align with the government's policies, as opposed to operating according to market principles. It also stated that the regulatory intervention of the GOC is made mainly by means of public procurement regulation and investment rules.

• (74) The applicant also referred to Commission findings in several recent investigations concerning the steel and petrochemical sectors in China, which confirmed the existence of significant distortions with regard to key inputs in the production of the product concerned, namely the investigations concerning stainless steel cold-rolled flat products ¹⁶, electrolytic chromium coated steel products ¹⁷, wire rods ¹⁸, certain graphite electrode systems ¹⁹, silicon ²⁰, and high tenacity polyester yarns ²¹.

• (75) Moreover, the application recalled the following elements resulting in significant distortions.

• (76) First, the tyre industry sector is being served to a significant extent by enterprises that operate under the ownership, control or policy supervision or guidance of state authorities.

• (77) The applicant submitted that a substantial degree of ownership by the GOC persists in the upstream industry to the product concerned, among which the following companies and group companies:

• — China Petroleum & Chemical Corporation (‘Sinopec’), one of the main Chinese producers of synthetic rubber;

• — Petro China one of the main Chinese producers of synthetic rubber;

• — Suzhou Baohua Carbon Black Co., Ltd member of the SOE Baowu Group, active in the carbon black industry;

• — Jiangxi Heimao Carbon Black Co., Ltd, active in the carbon black industry;

• — Shaanxi Provincial Natural Gas Co., Ltd active in the carbon black industry controlled by Shaanxi Gas Group Co., Ltd and whose beneficial owner is the SASAC of Shaanxi Province;

• — China Synthetic Rubber Corporation, active in the carbon black industry;

• — Hainan Natural Rubber Industry Group Co., Ltd, China's largest natural rubber manufacturer, 61 % owned by the Hainan SASAC;

• — Sinochem International, a petrochemical company which is an SOE operating in the natural rubber industry;

• — China Baowu Steel Group Co. Ltd, (‘Baowu’) active in the steel sector;

• — Shanxi Taiyuan Iron & Steel Co. Ltd (TISCO), active in the steel sector, majority-owned by Baowu;

• — Anshan Iron & Steel Group Corporation (‘Ansteel Group’), active in the steel sector;

• — HBIS Group, active in the steel sector;

• — Shandong Steel Group active in the steel sector;

• — Shandong Demian Group Co., Ltd active in the textile sector;

• — China Hi-Tech Group Corporation, active in the textile sector and owned by the SOE Sinomach.

• (78) The applicant also submitted that a substantial degree of ownership by the GOC persists in the industry of the product concerned, among which the following companies and group companies:

• — Aeolus Tyre Co. Ltd, of which the controlling shareholder is China National Chemical Corporation (‘ChemChina’), an SOE subordinated to the SASAC;

• — Qingdao Doublestar, directly held at 41,71 % by different SOEs, with the actual controller being the SASAC of Qingdao Municipal People's Government;

• — Shuangqian Tire Group Co., Ltd, held by the Shanghai Huayi Group, an SOE detained by Shanghai Huayi Holding Group Co., Ltd Shanghai Guosheng (Group) Co., Ltd and Shanghai Guosheng Group Investment Cothree which are all three SOEs under control of the Shanghai SASAC;

• — Guizhou Tyre Co., Ltd

• (79) The applicant also submitted that a substantial degree of ownership by the GOC persists in the downstream industry to the product concerned, among which the following companies and group companies:

• — China National Heavy Duty Truck Group Corp., Ltd Company, a heavy duty truck manufacturer which is an SOE;

• — FAW Jiefang which is 80 % owned by the SASAC;

• — Jiangling Motors Corporation, Ltd, partly detained by the SASAC and the Sanchong SASAC;

• — BAIC Foton Motor Co., Ltd which has the Beijing SASAC as controlling entity;

• — Dongfeng Motor Corporation which is an SOE.

• (80) Therefore, the applicant observed that the GOC directs and controls the companies of the Chinese tyre industry under non-market principles resulting in significant distortions throughout.

• (81) Second, the state presence in tyre companies also allows the authorities to interfere with prices and/or costs.

• (82) According to the application, control over the Chinese economy is exercised by means of implementing CCP cells in enterprises, both private and public, with a predominant role on the functioning of the company and its personnel. The applicant also underlined that over the last years, several regulations targeting either SOEs or private companies were adopted to ensure a stronger and more effective enforcement. This includes the 2020 Regulations on the Work of Grassroots Organizations of State-owned Enterprises of the Chinese Communist Party and notably its Article 11 which bestows significant executive powers upon the CCP cell within companies. This is reflected in the Articles of Association of companies such as Aeolus. The application also mentioned that similar requirements have been issued for private companies. Since 2016, companies have been under increasing pressure to grant the CCP a bigger role in their decision making. Notably the 2018 Code of corporate governance already called listed firms to grant the CCP a role in their internal rules. The applicant also referred to the Vice Chairman of the All-China Federation of Industry and Commerce, Ye Qing, who explained the notion of a "modern enterprise system with Chinese characteristics" to include three axes of control by the Party through (i) a human resources mechanism" (ii) a work of supervision and audit, and (iii) trade unions. It also noted that the CCP routinely uses the practice of "double-hatting," in accordance with which a single person holds several roles in different structures.

• (83) The applicant concluded that by their allegiance to the State and Party and their ensuing obligation to advance the State's and the Party's policy goals, the ability of Chinese companies to freely set their prices (in turn also affecting costs) is directly affected by non-market considerations.

• (84) In addition, the application provides that the CCP's influence over company personnel is particularly extensive and notably encompasses the nomination of key executives. It also states that there is a significant crossover between the CCP and Chinese businesses and that both the key executive and human resources positions in SOEs must be held by CCP members. As for private companies, they are also advised to establish a supervision mechanism led by the Party cell with disciplinary powers.

• (85) The applicant therefore concluded that through its presence at the various levels of management within companies, both public and private, the CCP and GOC are in a position to exert significant and direct decisions over the business life of the companies, away from free market principles and in accordance with political and industrial goals set out at State or Party levels. Such results in non-market forces significantly influencing costs and prices.

• (86) The applicant argued that the NDRC has a direct control over the development of companies in particular as it is in charge of the drafting of strategic development plans. The planning of the economy directly affects companies that are required to implement the binding guidelines set out in the different plans. Consequently, the NDRC is not only in charge of orientating companies, but straightforwardly affect their managerial decisions. The respect of the CCP ideology is enshrined in these different plans and must consequently be followed by Chinese companies. These principles are enforced through the CCP cells present within companies.

• (87) The applicant also argued that there was a state presence in the tyre industry through industry associations. In this regard, the China Rubber Industry Association (‘CRIA’) is the national association in charge of the whole Chinese rubber industry, including its downstream products such as tyres. As the CRIA is supervised by the SASAC of the State Council and welcomes the principles of the CCP in its functioning, the tyre industry is directly influenced by the CCP through its industry association which also has interlinked ties with managers of tyre producers. In addition to the CRIA, the application mentions the state influence through the CCCMC and the CAAM all which enable the State and Party control over the entire tyre production chain, dissociating prices and costs from free market principles.

• (88) The application also states that the CCP routinely appoints Party members as key executives in companies operating in the tyre industry. It notably refers to the case of SOEs and notably Aeolus, but also apparent non-SOEs as Prinx Changshan, Zhongce Rubber Group Co., Ltd and Sailun Group Co., which also include CCP members at the management board or supervisory board.

• (89) Third, the GOC pursues public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces.

• (90) The applicant notably mentioned that the tyre industry is targeted by favourable policies through the allocations made to petrochemicals, rubber, as well as through policies favouring important costs components, such as steel, energy or textile. In this regard, it refers to the fact that the production and sales of natural rubber are done under guidelines of the CRIA. It also mentioned the Yunnan government three-year action plan for agricultural modernisation which qualifies natural rubber as a "key industry" and mentions it as an area of development. The plan it aims at "expand[ing] the production of special rubber for tyres". The Sanmen County’s Long-Range Goals for 2035, also focuses on the rubber industry and aims at constructing a national rubber inspection and testing centre.

• (91) Regarding steel, the applicant notes that the 14th FYP also addresses the promotion and upgrading of the steel industry and refers to the release in early 2022 of Guiding opinions on promoting the high-quality development of the Iron and Steel Industry, to implement the 14th FYP and the 14th Five-Year Plan for the Development of Raw Materials Industry. The control over the steel market is implemented through the China Iron and Steel Association (‘CISA’), which is under supervision of the Party building agency, which is none other than the Party Committee of the SASAC of the State Council.

• (92) Concerning Energy and Textile, the applicant referred to a recent Commission and US anti-dumping investigations on Chinese products which illustrates the existence of price setting in the case of electricity, where the provincial NDRC sets the electricity price. The textile industry is designated in the 14th FYP. Consequently, the Department of Industry and Information Technology released a notice on Launching the 2022 Textile and Garment "Optimizing Supply and Promoting Upgrading" Activities. According to this notice, the China National Textile and Apparel Council is responsible to plan and implements tasks, and is under "business guidance, supervision and management of the State-owned Assets Supervision and Administration Commission of the State Council".

• (93) Tyres are included in the rubber industry in the Guiding Opinions on promoting the high-quality development of the petrochemical and chemical industry during the 14th Five-Year Plan which requires to "increase the proportion of green products in industries such as tyres" and promote a digital transformation around tyre products. The tyre industry is further guided through the CRIA's guidelines. A second area of development in the 14th FYP benefiting tyre producers is the support to research and development activities notably through the National Engineering Research Center for Advanced Tire Equipment and Key Materials. In addition, the applicant underlined that the Ministry of Industry and Information Technology (‘MIIT’) further also selected Sailun Group in its "first batch of ‘National Intelligent Manufacturing Pilot Demonstration Enterprise’ and ‘National Industrial Internet Pilot Demonstration Enterprise’ in the industry, and the first batch of ‘Characteristic Industrial Internet Platform for Key Industries’.

• (94) In addition to several provincial policies, the applicant relied on a number of other measures including:

• — Environmental incentives provided in accordance with the 13th FYP and 14th FYP which require economic development to be respectful of the environment.

• — The benefit of the tyre industry from other environmental policies including the Ministry of Finance’s Fiscal Support for the work of Carbon Peaking and Carbon Neutrality which aims at implementing governmental financial policies.

• — The MIIT nominated companies that local institutions are called to target for the implementation of industrial policies and lead to a green transformation. Twenty-nine tyre-related enterprises were labelled as such.

• — China Green Product Certification which would help obtaining additional financial support from the Government and was granted to several tyre producers.

• (95) Concerning the downstream industries, the application mentioned:

• — The 14th FYP which aims at promoting the consumption of consumer goods, including automobiles, and addresses the transportation industry.

• — The General Office of the State Council’s plan targeting "the new energy automobile industry," which promotes "new energy vehicles", including new energy lorries.

• — The previous green development plan based on the 13th FYP already targeted the development of the green automobile industry.

• — The 14^th FYP modern logistics development plan which promotes the development of the lorry industry and in particular the development of unmanned lorries.

• (96) Concerning financial measures, the applicant notably noted that:

• — In 2022, the General Administration of Customs of China worked with the CRIA to reduce the burden of exporting companies in the tyre industry.

• — In the Shandong province, the State also subsidised 12 tyre companies for technical transformation projects. The most significant investment was awarded to Shandong Linglong Tire Co. Ltd, though other companies, including Triangle Tire Co. Ltd, are also noted to be beneficiaries of such support.

• — Shandong Yongfeng Tyres Co., Ltd revealed on its website in 2018 that tyre producers received numerous state subsidies and favourable policies. Local governments answered Xi Jinping's call to reduce the costs of private enterprises by implementing burden-reducing policies related to electricity consumption, financing, fees and institutional transactions.

• (97) In addition, the application states that in addition to measures taking the form of widespread financial support, the GOC, through its local entities, interfered in companies’ managements by pushing for mergers and reorganizations.

• (98) Finally, the applicant referred to global expansion policies benefiting the tyre industry. Including the creation of outlets through the ‘belt and road initiative’; indirect shipping export support; the fact that the ‘belt and road initiative’ broadly discriminates and is essentially a disguised means of financing Chinese companies abroad at the expense of the participating countries.

• (99) Fourth, much like in any other sector in the Chinese economy, the tyre industry sector is subject to the distortions resulting from the discriminatory application or inadequate enforcement of Chinese bankruptcy, corporate and property rules.

• — The applicant referred to the systematic under-enforcement of bankruptcy rules results in the survival of large numbers of ‘zombie companies’ with an estimate of around 6 % of the rubber industry composed of zombie companies, and 14 % of the petroleum processing industry. Keeping companies alive artificially amounts to granting implicit State guarantees to these companies, which in turn distorts the costs of credits and access to finance.

• — Several tyre producers have been granted tax credits that helped them escaping insolvency.

• — In the steel sector, the combination of the numerous industrial policies applied over time.

• — The applicant also referred to previous Commission investigations which found that Enterprises do not have to go through a bidding process to obtain land. Land use rights are usually re-allocated to the companies free of charge or are being allocated by local authorities at negotiated prices. Tyre producers benefit from this discriminatory allocation of land.

• (100) Fifth, wage costs are distorted in the tyre industry sector as well.

• (101) According to the applicant, there is evidence that senior positions in the trade union are occupied by senior Party figures in SOEs, or by managers in non-State enterprises, thus pushing its ability to efficiently represent workers in the realm of the theoretical. It also mentions that the PRC has also still not ratified several of the most important international conventions on labour and refers to the existence of institutional constraints preventing the free setting of wages. In addition, the applicant considers that the Chinese workforce is impacted by the so-called household registration system and stated that the use of forced labour in the Xinyang Region contributes to the existence of distortion over wages, as it likely benefits tyre manufacturers with facilities in the region, such as the SOE Double Coin (Xinjiang) Kunlun Engineering Tire Co., Ltd, directly and through upstream actors.

• (102) Sixth, tyre producers have access to finance granted by institutions which implement public policy objectives or otherwise are not acting independently from the state.

• — The applicant underlines that the existence of preferential loans based on national policies is clearly revealed by the annual report of companies such as Shanghai Huayi Group. The accounting section of the report established different accounting methods depending on the situation "for policy-based preferential loan subsidies." In addition, the company certainly benefitted from such policies as its top three long-term loans were granted by the Export-Import Bank of China. One can also notice the presence among the government grants category of a "Fixed asset loans in Xinjiang financial subsidies."

• — In addition, the annual report of Prinx Chengshan Holdings displays similar findings and in particular a loan agreement with Bank of China (Hong Kong) Limited, Bank of China (Thailand) Corporation Limited and the Hongkong and Shanghai Banking Corporation Limited (HSBC), the first two of which are public banks, and the third being the first foreign lender to have its own CCP Committee in its investment banking subsidiary.

• — The applicant also pointed at the existence of biased rating of Chinese agencies concerning companies active in the tyre industry.

• (103) The applicant submitted that the above-mentioned distortions are systemic stating that the GOC intervenes at all levels of the supply chain of tyres, creating a situation where the input, the input of that input and so on, are all affected in one way or another by government distortions.

• (104) In conclusion, the applicant argued that significant distortions pursuant to Article 2(6a) of the basic Regulation are present in the tyre sector.

• (105) The Commission examined whether it was appropriate or not to use domestic prices and costs in China, due to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation. The Commission did so on the basis of the evidence available on the file. The evidence on the file included the evidence contained in the Report, as well as in its updated version (‘updated Report’) ²², which relies on publicly available sources.

• (106) That analysis covered the examination of the substantial government interventions in China’s economy in general, but also the specific market situation in the relevant sector including the product concerned. The Commission further supplemented these evidentiary elements with its own research on the various criteria relevant to confirm the existence of significant distortions in China.

3.3.2.   Significant distortions affecting the domestic prices and costs in China

• (107) The Chinese economic system is based on the concept of a “socialist market economy”. That concept is enshrined in the Chinese Constitution and determines the economic governance of China. The core principle is the “socialist public ownership of the means of production, namely, ownership by the whole people and collective ownership by the working people” ²³.

• (108) The state-owned economy is the “leading force in the national economy” and the state has the mandate to ensure its “consolidation and growth” ²⁴. Consequently, the overall setup of the Chinese economy not only allows for substantial government interventions into the economy, but such interventions are expressly mandated. The notion of supremacy of public ownership over the private one permeates the entire legal system and is emphasized as a general principle in all central pieces of legislation.

• (109) The Chinese property law is a prime example: it refers to the primary stage of socialism and entrusts the state with upholding the basic economic system under which the public ownership plays a dominant role. Other forms of ownership are tolerated, with the law permitting them to develop side by side with the state ownership ²⁵.

• (110) In addition, under Chinese law, the socialist market economy is developed under the leadership of the CCP. The structures of the Chinese state and of the CCP are intertwined at every level (legal, institutional, personal), forming a superstructure in which the roles of CCP and the state are indistinguishable.

• (111) Following an amendment of the Chinese Constitution in March 2018, the leading role of the CCP was given an even greater prominence by being reaffirmed in the text of Article 1 of the Constitution.

• (112) Following the already existing first sentence of the provision: “[t]he socialist system is the basic system of the People’s Republic of China” a new second sentence was inserted which reads: “[t]he defining feature of socialism with Chinese characteristics is the leadership of the Communist Party of China.” ²⁶ This illustrates the unquestioned and ever-growing control of the CCP over the economic system of China.

• (113) This leadership and control is inherent to the Chinese system and goes well beyond the situation customary in other countries where the governments exercise general macroeconomic control within the boundaries of which free market forces are at play.

• (114) The Chinese state engages in an interventionist economic policy in pursuance of goals, which coincide with the political agenda set by the CCP rather than reflecting the prevailing economic conditions in a free market ²⁷. The interventionist economic tools deployed by the Chinese authorities are manifold, including the system of industrial planning, the financial system, as well as the level of the regulatory environment.

• (115) First, on the level of overall administrative control, the direction of the Chinese economy is governed by a complex system of industrial planning which affects all economic activities within the country. The totality of these plans covers a comprehensive and complex matrix of sectors and crosscutting policies and is present on all levels of government.

• (116) Plans at provincial level are detailed while national plans set broader targets. Plans also specify the means in order to support the relevant industries/sectors as well as the timeframes in which the objectives need to be achieved. Some plans still contain explicit output targets.

• (117) Under the plans, individual industrial sectors and/or projects are being singled out as (positive or negative) priorities in line with the government priorities and specific development goals are attributed to them (industrial upgrade, international expansion etc.).

• (118) The economic operators, private and state-owned alike, must effectively adjust their business activities according to the realities imposed by the planning system. This is not only because of the binding nature of the plans, but also because the relevant Chinese authorities at all levels of government adhere to the system of plans and use their vested powers accordingly, thereby inducing the economic operators to comply with the priorities set out in the plans ²⁸.

• (119) Second, on the level of allocation of financial resources, the financial system of China is dominated by the state-owned commercial and policy banks. Those banks, when setting up and implementing their lending policy need to align themselves with the government’s industrial policy objectives rather than primarily assessing the economic merits of a given project ²⁹.

• (120) The same applies to the other components of the Chinese financial system, such as the stock markets, bond markets, private equity markets etc. Also, these parts of the financial sector are institutionally and operationally set up in a manner not geared towards maximizing the efficient functioning of the financial markets but towards ensuring control and allowing intervention by the state and the CCP ³⁰.

• (121) Third, on the level of regulatory environment, the interventions by the state into the economy take a number of forms. For instance, the public procurement rules are regularly used in pursuit of policy goals other than economic efficiency, thereby undermining market-based principles in the area. The applicable legislation specifically provides that public procurement shall be conducted in order to facilitate the achievement of goals designed by state policies. However, the nature of these goals remains undefined, thereby leaving broad margin of appreciation to the decision-making bodies ³¹.

• (122) Similarly, in the area of investment, the GOC maintains significant control and influence over destination and magnitude of both state and private investment. Investment screening as well as various incentives, restrictions, and prohibitions related to investment are used by authorities as an important tool for supporting industrial policy goals, such as maintaining state control over key sectors or bolstering domestic industry ³².

• (123) In sum, the Chinese economic model is based on certain basic axioms, which provide for and encourage manifold government interventions. Such substantial government interventions are at odds with the free play of market forces, resulting in distorting the effective allocation of resources in line with market principles ³³.

3.3.3.   Significant distortions according to Article 2(6a)(b), first indent of the basic Regulation: the market in question being served to a significant extent by enterprises which operate under the ownership, control or policy supervision or guidance of the authorities of the exporting country

• (124) In China, enterprises operating under the ownership, control and/or policy supervision or guidance by the state represent an essential part of the economy.

• (125) The sector of the product concerned is mainly served by SOE companies, such as: China National Tyre & Rubber Co. Ltd (CNRC) held by SINOCHEM (SOE under the control of the SASAC) ³⁴, Aeolus Tyres 57,5 % held by SOE CNRC ³⁵, and Shuangqian (Double Coin) Tire Group Co., Ltd which is 58,57 % state owned ³⁶.

• (126) In addition, other companies have a significant degree of state ownership including Qingdao Doublestar which is 42,4 % state-owned ³⁷, and Guizhou Tyre Co., Ltd which is 26,47 % state owned ³⁸.

• (127) However, CCP interventions into operational decision making have become the norm not only in State owned enterprises (‘SOEs’), but also in private companies ³⁹, with CCP claiming leadership over virtually every aspect of the country’s economy. Indeed, the State’s influence by means of CCP structures within companies effectively results in economic operators being under the government’s control and policy supervision, given how far the State and Party structures have grown together in China.

• (128) Moreover, the sector of the product concerned is subject to several government policies, such as the MIIT Guiding Opinion on promoting the high-quality development of the Chemical and Petrochemical industries during the 14^th FYP which provides in its Section II.3 for the implementation of “actions to improve the quality of chemical products supply. Focus on strategic emerging industries […] and accelerate the development of […] high-performance rubber and plastic materials, […]. Increase the proportion of green products in industries such as […] tires, […]. Encourage enterprises to improve product quality and to create and foster brands”. In addition, Section V of this Guiding Opinion provides for the building of “an internet-based industrial chain monitoring applicable to bulk products such as fertilizers and tyres”. ⁴⁰

• (129) The tyre industry is also covered by policies at provincial levels such as the Shandong Province 14^th FYP on the development of the chemical industry which provides the following specifically for the “tyre industry: Strictly implement industry policies and industry standards, integrate and withdraw enterprises with an annual production capacity of less than 1.2 million all-steel radial tires (except engineering tires, aviation tires, and wide-section tubeless tires) and less than 5 million semi-steel radial tires (except run-flat tires, high-end racing tires, and ultra-low-section tires). […]Following the course of high-end and segmented markets, develop high-end products such as ultra-low section, flattening, low rolling resistance, low noise, and run-flat, expand R&D and production of high-performance radial tires such as smart tires, safety tires, low rolling resistance tires, and super wear-resistant so as to increase the products’ added value and market shares. Strengthen the tire industry clusters in the Shandong peninsula as well as in Northern Shandong, strengthen connections with industry support facilities, develop the rubber additive industry cluster in western Shandong, and expand the rubber processing equipment industry cluster in eastern Shandong . Comprehensively improve digitalization, network development and smart development of the tire industry, promote the construction of smart factories in the tire industry across the province, and create an a tire manufacturing industry internet cloud platform. Actively promote green tire production processes such as chemical rubber refining and radiation pre-vulcanization technology, encourage the secondary use of tires, promote the green pyrolysis and carbon black regeneration technology of waste tires, and promote the green circular development of the industry. […] By 2025, the output value of the tire industry will reach RMB 200 billion; there will be 8 tire companies with sales revenue exceeding RMB 10 billion, of which more than 2 will exceed RMB 20 billion, and 1-2 companies will enter the top 10 in the global tire industry” ⁴¹.

• (130) Government control and policy supervision can be also observed at the level of the relevant industry associations ⁴².

• (131) For instance, the China Rubber Industry Association (‘CRIA’), of which the CNRC, Aeolus Tyres, Qingdao Doublestar, Shuangqian (double coin) Tire Group Co., Ltd, and Guizhou Tyre Co., Ltd are members ⁴³, states in Art. 3 of its Articles of Association that it “adheres to the overall leadership of the Communist Party of China. In accordance with the provisions of the Constitution of the Communist Party of China, the Association establishes an organization of the Communist Party of China, carries out the activities of the Party, and provides the necessary conditions for the activities of the Party organization. The authority in charge of registration and management of the Association is the Ministry of Civil Affairs, and the authority in charge of Party building is the Party Committee of the State-owned Assets Supervision and Administration Commission of the State Council. The Association accepts the business guidance, supervision and management of the authority in charge of registration and management, and of the authority in charge of Party building as well as of the relevant administration department in charge of industry management.” ⁴⁴. Art. 36 further states that the persons in charge of the Association must meet conditions such as “Adhere to the leadership of the Communist Party of China, support socialism with Chinese characteristics, resolutely implement the Party's line, principles, and policies, and have good political qualities” ⁴⁵ .

• (132) In addition, the CRIA has 15 branches and professional committees, of which the Tire Branch is its largest branch. There are more than 270 member units, mainly tire manufacturers, and the rest are research institutes, rubber machinery manufacturers, raw and auxiliary materials production and distribution companies related to tire production. The CRIA tyre branch follows the provisions of the Articles of Association of the China Rubber Industry Association, takes serving members as its purpose, plays the role of a bridge between the government and enterprises, and carries out various tasks under the leadership of the General Association. ⁴⁶

• (133) The tire production of member companies accounts for about 80 % of the Chinese domestic tire production. The Association has 62 governing units, the chairman unit is Zhongce Rubber Group Co., Ltd, and the vice chairman units are Sailun Group Co., Ltd, Linglong Tire Co., Ltd, SHUANGQIAN Tire Group Co., Ltd, Triangle Tire Co., Ltd, Michelin (China) Investment Co., Ltd and other well-known domestic and foreign tire companies. ⁴⁷

• (134) The Association itself underlines the impact of its policies on the market , stating notably that “[In 2023, ]the prices of major raw materials were in a downward trend in the first half of the year, and continued to rise in the third quarter, leading to a wave of price increases in the tire industry. Despite this, in the first 10 months, the profits of carbon black, rubber additives, and steel cord still showed a significant year-on-year decline, among which carbon black fell by 14,99 %, additives fell by 7,45 %, and skeleton materials fell by 2,90 %”. The Association also highlights the impact of policies on the export performance of the tyre industry mentioning that “the overseas export market is particularly favorable, making up for the gap in domestic consumption and becoming an important driving force to support the increase in sales. According to statistics from the China Rubber Association, from January to October, the industry's export rate was 37,5 % (in value). During this period of time, tire exports maintained a high growth trend, and the export rate (value) remained above 50 % for several consecutive months. (…). Statistical data from the General Administration of Customs show that from January to November, my country's new pneumatic rubber tire exports were about 564 million, an increase of 11,4 %; the export volume was about 7,86 million tons, an increase of 16,8 %; the export trade value was RMB 137,51 billion, an increase of 20,3 %.” ⁴⁸.