Chinese government cancelled the export tax rebates of gum turpentine on April 1, 2007. The negative effect haunts the Chinese GT export-oriented manufacturers since then.
According to CCM's report Export and Import of Turpentine in China, "Chinese export volume of turpentine has dropped sharply from the year 2007 to 2009". Turpentine refers to gum turpentine (GT) and crude sulphate turpentine (CST) but the output of CST is so small that it can be neglected. In other words, GT is greatly influenced by the elimination of tax rebates.
China enjoys rich resources of gum rosin, the raw material of GT, which granted natural advantage of GT production. Faced with cost increase pressure like the human cost, the Chinese GT manufacturers lost the advantage over their biggest competitor in Brazil. Chinese manufacturers could not take the dramatical shrink in profit and turn to domestic market instead. The massive funds run in Chinese market set a trap for manufacturers and shutdown occurred in succession. The existing companies either lower the output or turn to domestic market instead, leave low exportation rate of GT.
CCM's report analyzed the reasons with more factors from more angles. For more information, please visit http://www.cnchemicals.com
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