With the rapid development of the rubber industry and its downstream sectors in China, the resulting sharp increase in the number of scrap tires is creating great environmental pressure. By considering the tire production, consumption, collection, and reuse processes as a whole system of tire material flows, and based on physical input–output analysis (IOA), this article analyzes the status quo of China's tire industry and performs a comparative study between China and Europe. The study shows that the tire industry of China in 2005 and that of Europe in 1996 are similar in material‐flow characteristics. To make the best use of materials, it is necessary to strengthen the reuse of scrap tires in China. A scenario analysis is presented to show the effects of improving the reuse process from the viewpoint of IOA.