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China has become the world's largest tire producer, with its global market share steadily rising year after year. The Chinese tire market has been growing at an impressive rate of over 20% annually, prompting multinational corporations to intensify their investments in the region. These companies have poured significant capital into building factories, localizing research and development, and expanding their franchise networks, which have led to substantial profits. However, this rapid expansion has also brought about serious issues such as resource waste and environmental pollution.
The competition among multinational tire companies is becoming fiercer, especially in the retail sector, where retail sales account for two-thirds of all tire sales. A company’s market share in this segment largely depends on its network coverage, making the expansion of sales channels a key competitive strategy. As a result, many multinational firms are accelerating their growth plans.
Goodyear was one of the first international tire companies to enter China. Its current business strategy has shifted toward enhancing sales channels, refining sales models, and improving after-sales services. Within just six months of launching its initiative, Goodyear established 300 retail franchise stores, averaging two new stores per day.
Michelin, another major player, has invested over $400 million in China to capture a larger market share. It now operates factories in Shenyang and Shanghai, with more than 300 dealers, adding around 100 new dealers each year. Bridgestone, too, has significantly increased its investment in China, becoming the largest tire manufacturer in the country. The company recently invested RMB 5 billion in a factory in Huizhou, causing considerable attention within the industry. In Jiangsu, it has also developed a large testing ground covering 839,000 square meters in Yixing.
Hankook, another leading international brand, views China as its most important market and has established factories in Jiaxing and Jiangsu. It currently holds a strong position in the Chinese car tire market and aims to open 300 franchise stores within five years. Additionally, Hankook has launched a full-vehicle production line, expecting to produce 60,000 tires annually.
Despite their economic success, these multinational companies have also contributed to severe environmental pollution and resource wastage. Some enterprises failed to implement the "three simultaneous" system during initial construction, leading to uncontrolled wastewater discharge and lack of pollution control facilities. This has resulted in numerous environmental violations.
In January 2007, Michelin’s subsidiary, Michelin Warriors Limited, was penalized by the State Environmental Protection Agency for multiple environmental violations. These included improper desulfurization and dust removal systems, excessive emissions, and noise pollution. The company was ordered to rectify the issues or face shutdown and fines. However, its response was slow, leading to further penalties.
Industry experts note that tire production involves various chemical intermediates, and poor management can lead to serious environmental damage. While some companies cite cost pressures as a reason for lax environmental controls, others have managed to increase prices—such as Bridgestone, Michelin, and Goodyear—which rose by 3% to 5% in 2007. These price hikes not only offset rising costs but may also boost profits, suggesting that environmental negligence is driven more by profit motives than financial constraints.
Beyond environmental issues, the expansion of multinational tire companies in China has placed a heavy burden on natural resources, labor, and land. Despite the maturation of the Chinese tire market, many foreign firms continue to expand without proper planning.
The issue of double standards in environmental protection by multinational corporations has become increasingly evident. Over the past two years, the number of foreign companies listed for environmental violations has surged from around 80–90 to nearly 300. Many of these companies maintain good environmental reputations in their home countries but adopt lower standards in developing nations like China.
Environmental experts recommend strengthening legal frameworks, ensuring equal treatment of domestic and foreign enterprises, and increasing oversight and penalties for illegal operations. They also suggest addressing local government practices that prioritize attracting foreign investment over environmental responsibility. Only through comprehensive reforms can the negative impacts of multinational corporations be effectively mitigated.