Page 218 - 2017 White Paper
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7 White Paper on the Business Environment in China
whose second-quarter profit skidded 28 percent, are of only 2.3 million tons, with Thailand ranking as the top
still down more than 20 percent this year despite [the 10 exporter to China (People’s Daily 2006).
percent surge following the stimulus announcement]”
(Sweeney and Chiang 2012). Cement Production
In the words of GK Dragonomics managing director Through the global economic slowdown, domestic
Arthur Kroeber, “people had underestimated the consumption (and production) of cement remained
impact of the slowdown on certain sectors, particularly mostly insulated from global trends due to continuing
construction machinery [and that] if you are investing demand for construction in China.
there it has been really painful, the bottom has fallen out”
(Sweeney and Chiang 2012). In the coming years, the best use of resources for
cement production will likely be achieved by continuing
Supplementing domestic stimulus as an engine for efficiency-related reforms; it is estimated that in
machinery production and imports, Chinese investment 2006 cement production accounted for total energy
promotion authorities are also actively courting foreign consumption equaling 131 million tons of coal (Wan
investment that carries with it technological capabilities; 2007)—approximately 6.6 percent of an estimated 2.1
MOFCOM statistics indicated that there were 1675 new billion tons consumed in total (Xinhua 2005). Historically,
foreign investment projects established over 2009 (Invest inefficient operations, small-scale production and
in China 2010). procedural issues have led to low energy efficiency in
domestic production, although new guidelines and
Mergers and Acquisitions are another potential regulations such as those promulgated in 2007 (Wan
source of technology that can be used to cut national 2007) detailing new, higher standards for technology-
reliance on imports for critical machinery, and the and process-related energy efficiency will improve
Central Government is said to be “pushing forward” such the yield of cement produced per energy unit. These
activities, presumably by making the approval process adjustments, detailed as far back as 2002, indicate that
or other regulatory requirements more streamlined the replacement of plants producing cement with more
(Yu 2010). efficient varieties would alone save approximately 15
million tons of coal per year (Soule, Logan, and Stewart
Machinery manufacturing, and especially heavy- and 2002).
construction-related machinery manufacturing, appears
to be more geographically diversified in China than many Despite cement exports from China declining by
other industries, with major players in inland provinces, nearly 13 percent in 2008 (Tong 2009), actual output
and as far north as Harbin—compared with the east-and- reportedly grew by 5.2 percent to top 1.38 billion tons
southern-coast-first development model that has guided in 2008 and consumption was forecasted to grow by 6.3
the growth of many other sectors. percent in 2009 (Zheng 2009). Later reports indicated
that production had surpassed 1.65 billion tons that year
Products Classified by Materials the largest volume of any nation in the world (Cement
Tech 2010).
China’s rapid, continuing growth has indisputably
fueled domestic demand for both raw and processed In 2010, the PRC government’s “[accelerated] phasing
materials. While relative domestic scarcity of some out of energy-wasting and outdated production capacity”
materials has led to import-driven markets, China (including the mandated closure of “700 polluting and
continues to be self-sufficient in many categories. For energy-intensive” plants) was reported to lower overall
example, in 2007 China produced an estimated 1.3 billion production by some 107 million tons; nevertheless,
tons of cement domestically (U.S. Geological Survey 2008) research cited by China Daily suggested that overall
—approximately half of the world’s total production— volume would reach 1.85 billion4 tons by 2011 (Liu 2010).
and has been the world’s largest producer of cement
since 1985. In contrast, China has been a net-importer 4 The original China Daily article which reads “The country’s cement
of rubber products, with the total consumption of 5.5 production was 163 million tons in 2009 and will stand at 185 million
million tons in 2006 outstripping domestic production tons this year...” has strikingly small figures compared to other reports
of PRC cement production, for example, 1.38 billion tons produced
in 2008. Considering the fact that this sort of translation error is not
uncommon, we decide the number of 1.85 billion is most likely correct.
218
whose second-quarter profit skidded 28 percent, are of only 2.3 million tons, with Thailand ranking as the top
still down more than 20 percent this year despite [the 10 exporter to China (People’s Daily 2006).
percent surge following the stimulus announcement]”
(Sweeney and Chiang 2012). Cement Production
In the words of GK Dragonomics managing director Through the global economic slowdown, domestic
Arthur Kroeber, “people had underestimated the consumption (and production) of cement remained
impact of the slowdown on certain sectors, particularly mostly insulated from global trends due to continuing
construction machinery [and that] if you are investing demand for construction in China.
there it has been really painful, the bottom has fallen out”
(Sweeney and Chiang 2012). In the coming years, the best use of resources for
cement production will likely be achieved by continuing
Supplementing domestic stimulus as an engine for efficiency-related reforms; it is estimated that in
machinery production and imports, Chinese investment 2006 cement production accounted for total energy
promotion authorities are also actively courting foreign consumption equaling 131 million tons of coal (Wan
investment that carries with it technological capabilities; 2007)—approximately 6.6 percent of an estimated 2.1
MOFCOM statistics indicated that there were 1675 new billion tons consumed in total (Xinhua 2005). Historically,
foreign investment projects established over 2009 (Invest inefficient operations, small-scale production and
in China 2010). procedural issues have led to low energy efficiency in
domestic production, although new guidelines and
Mergers and Acquisitions are another potential regulations such as those promulgated in 2007 (Wan
source of technology that can be used to cut national 2007) detailing new, higher standards for technology-
reliance on imports for critical machinery, and the and process-related energy efficiency will improve
Central Government is said to be “pushing forward” such the yield of cement produced per energy unit. These
activities, presumably by making the approval process adjustments, detailed as far back as 2002, indicate that
or other regulatory requirements more streamlined the replacement of plants producing cement with more
(Yu 2010). efficient varieties would alone save approximately 15
million tons of coal per year (Soule, Logan, and Stewart
Machinery manufacturing, and especially heavy- and 2002).
construction-related machinery manufacturing, appears
to be more geographically diversified in China than many Despite cement exports from China declining by
other industries, with major players in inland provinces, nearly 13 percent in 2008 (Tong 2009), actual output
and as far north as Harbin—compared with the east-and- reportedly grew by 5.2 percent to top 1.38 billion tons
southern-coast-first development model that has guided in 2008 and consumption was forecasted to grow by 6.3
the growth of many other sectors. percent in 2009 (Zheng 2009). Later reports indicated
that production had surpassed 1.65 billion tons that year
Products Classified by Materials the largest volume of any nation in the world (Cement
Tech 2010).
China’s rapid, continuing growth has indisputably
fueled domestic demand for both raw and processed In 2010, the PRC government’s “[accelerated] phasing
materials. While relative domestic scarcity of some out of energy-wasting and outdated production capacity”
materials has led to import-driven markets, China (including the mandated closure of “700 polluting and
continues to be self-sufficient in many categories. For energy-intensive” plants) was reported to lower overall
example, in 2007 China produced an estimated 1.3 billion production by some 107 million tons; nevertheless,
tons of cement domestically (U.S. Geological Survey 2008) research cited by China Daily suggested that overall
—approximately half of the world’s total production— volume would reach 1.85 billion4 tons by 2011 (Liu 2010).
and has been the world’s largest producer of cement
since 1985. In contrast, China has been a net-importer 4 The original China Daily article which reads “The country’s cement
of rubber products, with the total consumption of 5.5 production was 163 million tons in 2009 and will stand at 185 million
million tons in 2006 outstripping domestic production tons this year...” has strikingly small figures compared to other reports
of PRC cement production, for example, 1.38 billion tons produced
in 2008. Considering the fact that this sort of translation error is not
uncommon, we decide the number of 1.85 billion is most likely correct.
218
