中咨：中国建材行业展望报告(英文).doc

Outlook on Chinas Building Materials IndustryChina International Economic Consultants (CIEC)April 15, 2002Development and Prospect of Chinas Building Materials Industry in 2001Building materials industry is closely related to the development cycle of the national economy. In recent years, China has implemented a series of policies such as the pro-active fiscal policy and the expansive monetary policy. Accordingly, the national economic growth has rallied. While the world economy generally slid by a wide margin, China still managed to achieve a relatively high GDP growth rate of 7.3% in 2001. Underpinned by the fast national economic growth, the economic operation quality of Chinas building materials industry continued to improve steadily in 2001 on the basis of a substantial rebound in 2000. According to latest monthly statistics, the basic economic operation situation of the building materials industry in 2001 were as follows: the yearly industrial added value hit 102.3 billion yuan (referring to state-owned industrial enterprises and non-state owned industrial enterprises with annual sales of over 5 million yuan, and the same below), up 11.65% over the previous year, which was slightly higher than the goal of 9-10% set at the end of 2000; the yearly sales revenue amounted to 314.6 billion yuan, up 11.07% over the previous year; the yearly profits totaled 11.891 billion yuan, up 26.81% over the previous year, which was slightly more than the goal of about 11 billion yuan set at the end of 2000; the annual import and export value of building materials and non-metallic mineral commodities stood at 5.672 billion US dollars, up 12.12% over the previous year, of which export accounted for 3.3 billion US dollars, up 15.11%; the output of cement reached 621 million tons, up 6.5% year on year; the production of plate glass hit 204 million weight crates, up 14.48% year on year.For 2002, the entire building materials industry will maintain steady growth supported by steady national economic growth. Numerous favorable factors will prop up overall growth of the building materials industry, although some unfavorable factors will restrain its further development. Structural adjustment amid control over aggregate output will still be the main tone for development of the countrys building materials industry in 2002. As China has entered the WTO, the domestic building materials industry will face fiercer competition and some sub-sectors will be affected to some extents.This Report will summarize the operating conditions of Chinas building materials industry in 2001, analyze and forecast its industrial developments in 2002, and specify the advantages and disadvantages of Chinas WTO membership on the building materials industry by employing authoritative data and materials.Content1.Development of Chinas Building Materials Industry in 200111.1 Aggregate Control Targets for the Building Materials Industry in 200111.2Overview of Industrial Operation21.2.1Aggregate Control Targets for the Building Materials Industry in First Half Year21.2.2 Annual Accomplishment of Main Economic Indicators of the Industry41.3Operations of 26 Key Building Materials Enterprises62.Operations of Sub-sectors in Building Materials Industry in 200182.1Glass and Glass Products Industry82.2Construction and Sanitary Ceramics Industry112.3Glass Fiber and Products Industry112.4Cement Industry133.Influences of WTO Entry on Chinas Building Materials Industry and Analysis of Countermeasures173.1General Influences on the Building Materials Industry173.1.1Analysis of Advantages and Disadvantages of Chinas Building Materials Industry173.1.2Influences of WTO Entry on Building Materials Industry Analysis of Opportunities and Challenges183.2 Influences on Main Sub-industries/Associated Industries193.2.1Main Sub-industries193.2.2Associated Industries Ceramic Machine-building Industry213.3Analysis of Countermeasures234.Analysis and Forecast of the Developments of Building Materials Industry in 2002264.1Targets and Main Work of the Building Materials Industry in 2002264.1.1Targets264.1.2Main Work264.2Favorable Factors for the Building Materials Industry in 2002284.3Unfavorable Factors for the Building Materials Industry in 2002295.Development Plans for Building Materials Industry305.1Tenth Five-Year Plan (2001-2005) for the Industry305.2 Tenth Five-year Plan for Main Sub-sectors305.2.1Construction and Sanitary Ceramics Industry305.2.2Cement Industry315.2.3Glass Industry336.Analysis of Listed Companies in Building Materials Industry356.1New Building Materials Block356.2Cement Block366.3Glass Block376.4Construction and Sanitary Ceramics Block387.Appendixes397.1 Tenth Five-Year Plan for the Building Materials Industry397.3 18 Standards for Building Materials Industry547.4 Output of 106 Cement Enterprises in 2001558.Reference Materials581. Development of Chinas Building Materials Industry in 20011.1 Aggregate Control Targets for the Building Materials Industry in 2001On February 2, 2001, the State Economic and Trade Commission issued the Opinions on Implementing Aggregate Control in the Building Materials Industry in 2001 (SETC No. 99 2001). According to the document, the control targets for the building materials industry in 2001 are as follows: A total of 1,900 small cement kilns will be closed to reduce backward production capacity by 50 million tons, of which 35 million tons are involved in uncompleted overhaul drive of the industry and 15-20 million tons concern additional closures of small kilns to make room for big projects. The national cement output will be controlled within 570 million tons. Meanwhile, 100 small glass production lines will be closed down to reduce the glass production capacity by 10 million weight crates and control the national plate glass output at 170 million weight crates. The profit of the whole industry after offsetting losses will not be less than 8.5 billion yuan.For details, please see the following table with regard to the aggregate cement control targets and the catalogue of capacities to be eliminated in 2001:Table 1-1: Aggregate cement control targets and catalogue of capacities to be eliminated in 2001 (unit: 10,000 tons):ProvinceActual output in 2000Aggregate control target in 2001Capacity to be eliminated according to Document No. 49 1999 issued by General Office of the State CouncilCapacity already eliminated by 2000Capacity to be eliminated in first half of 2001Total58319570001000065003500Beijing 827800961800Tianjin 26827024*35 0Hebei46954600773*635 138Shanxi119312005445880Inner Mongolia630630171*53 118Liaoning19541950361247114Jilin759800149*44 105Heilongjiang9049501506783Shanghai3123103*3 0Jiangsu45994600509*580 0Zhejiang425742007097090Anhui19062000810666144Fujia171 441Jiangxi1463140016811256Shandong654762001134884250Henan37233500611*225 386Hubei246124007397600Hunan23962200994*400 594Guangdong587256001283*265 1018Guangxi2198200041823395Hainan31530025*22 3Sichuan27662600752288464Guizhou784750567*91 476Yunna41 335Chongqin108 207Shaanxi989970350*332 18Gansu724720151*118 33Qinghai12412032*16 16Ningxia28026033*21 12Xinjiang8959001586098Note: 1) * the figures are up to October 2000.2) The catalogue is sourced from the No. 99 2001 document issued by the State Economic and Trade Commission on February 2, 2001.1.2Overview of Industrial Operation1.2.1Aggregate Control Targets for the Building Materials Industry in First Half YearChinas cement output amounted to 287 million tons in the first half of 2001, up 9% year on year. The figure represented 50.3% of the annual target, indicating that the production was basically within the scope of control.A total of 15 provinces, municipalities and autonomous regions posted better control than the national average level in cement output in the first half of 2001. They are: Inner Mongolia (44.0%), Heilongjiang (45.0%), Liaoning (45.8%), Xinjiang (46.1%), Fujian (46.3%), Hebei (46.9%), Guangxi (47.0%), Beijing (47.6%), Guangdong (47.7%), Jilin (48.4%), Anhui (48.5%), Hubei (48.9%), Hunan (49.1%), Shanxi (49.3%), and Shanghai (49.7%).The regions whose output exceeded the target also numbered 15. They are: Qinghai (62.8%), Henan (56.6%), Shaanxi (55.3%), Chongqing (55.1%), Guizhou (54.7%), Sichuan (54.0%), Gansu (53.8%), Shandong (53.5%), Jiangsu (53.3%), Ningxia (53.3%), Yunnan (52.8%), Hainan (52.4%), Tianjin (52.3%), Zhejiang (51.4%), and Jiangxi (51.1%).Of special note, the production in the nine regions in western China exceeded the national average by 3.5 percentage points, and the growth rate was also higher than that in the same period of 2000, such as Guizhou (40.3%), Qinghai (34.8%), Yunnan (32.4%) and Sichuan (24.8%). This was due mainly to the implementation of the Western China Development Drive, which caused greater demand for cement. Anyway, this also has brought about pressures to the cement industrial restructuring in the western regions. The regions should seize the opportunities to develop new-type dry-method cement and discard backward production capacities.See Table 1-2 on fulfillment of cement output control targets by region in the first half of 2001.Table 1-2: Fulfillment of cement output control targets by region in the first half of 2001RegionCement output control target for 2001 (10,000t)First half year aggregateAggregate output (10,000t)y-o-y increase (%)Percentage of annual target（%）Total 57000286639.050.3Central China1508076059.050.4Eastern China32430161659.149.8Western China9120487620.853.5Regions with better output control than national average1Qinghai 1207534.862.82Henan 350019829.356.63Shaanxi 9705369.955.34Chongqing 13007168.955.15Guizhou 75041040.354.76Sichuan 2600140424.854.07Gansu 72038814.253.98Shandong 620033148.653.59Jiangsu 4600245121.553.310Ningxia 26013914.753.311Yunnan 150079232.452.812Hainan 3001570.152.413Tianjin 27014129.452.314Zhejiang 4200219516.251.415Jiangxi 140071618.051.1Regions with output higher than national average level1Shanghai 31015414.649.72Shanxi 12005928.549.33Hunan 220010804.449.14Hubei 2400117311.948.95Anhui 20009704.648.56Jilin 8003878.048.47Guangdong 560026730.947.78Beijing 8003815.047.69Guangxi 2000941-7.547.010Hebei 4600215910.446.911Fujian 160074112.646.312Xinjiang 90041515.446.113Liaoning 19508946.245.814Heilongjiang 9504276.745.015Inner Mongolia 63027916.044.2(Source: Economic Operation Bureau of State Economic and Trade Commission)1.2.2 Annual Accomplishment of Main Economic Indicators of the Industry According to the latest monthly report, the building materials industry realized its anticipated targets for 2001. Various economic indicators of the industry were as follows (Source: from Yu Xiaolan, Information Department of China Association of Building Materials Industry, No. 2, 2002 of China Building Materials Journal): (1) Industrial Added ValueThe building materials industry accomplished an industrial added value of 102.3 billion yuan in 2001 (covering state-owned industrial enterprises and non-state-owned industrial enterprises with annual sales of over 5 million yuan, and the same below), up 11.65% over the previous year. The growth rate was higher than the 9-10% forecast at the end of 2000.(2) Sales RevenueThe sales revenue of the building materials industry in 2001 amounted to 314.6 billion yuan, up 11.07% over the previous year. Of this, the five provinces of Guangdong, Shandong, Jiangsu, Zhejiang and Henan each posted sales of over 20 billion yuan, and their combined sales accounted for 52% of the industrys total.(3) ProfitThe profit of the building materials industry totaled 11.891 billion yuan in 2001, up 26.81% over the previous year. It was slightly higher than the 11 billion yuan predicted at the end of 2000. Of this, the five provinces of Shandong, Zhejiang, Jiangsu, Hebei and Henan each generated profit of over 900 million yuan, and their combined profit accounted for 60% of the industrys total. The five provinces of Shanxi, Hainan, Yunnan, Liaoning and Guangxi posted net loss after offsetting by profit, with combined net loss of 390 million yuan. Among the 32 sectors in the building materials industry, three sectors, namely cement, construction and sanitary ceramics and cement products industries, each yielded profit of over one billion yuan. After offsetting by profit, the other mineral fiber and products industry, and the building material and other non-metallic mineral products equipment manufacturing industry were still in the red in 2001.(4) Import and ExportChinas import and export value of building materials and non-metallic mineral commodities reached 5.672 billion US dollars in 2001, up 12.12% over the previous year. Of this, exports accounted for 3.3 billion US dollars, up 15.11%. The surplus in import and export trade of building materials and non-metallic mineral commodities amounted to 933 million US dollars, up 37.43% over the previous year. The regions with an export value of over 100 million US dollars in 2001 included Guangdong, Fujian, Shandong, Shanghai, Liaoning, Zhejiang and Jiangsu, with their combined exports accounting for 84.17% of the countrys total export of building materials. Among them, Guangdong and Fujian contributed to 52.21% of the countrys total building materials export in 2001. The export markets each with a value of over 100 million US dollars included Japan, Hong Kong, the United States, Belgium and the Republic of Korea, with the combined exports to these markets accounting for 75.69% of the countrys total building materials export. They were followed by the Netherlands and Taiwan, each with an export value of over 50 million US dollars. The main export commodities were slab granite, diamond, cement and cement clinker, glass fiber and products, plate glass, fluorite and sandwiched glass. The combined exports of these seven kinds of commodities accounted for 60.63% of Chinas total building materials export in 2001.(5) OutputIn 2001, China produced 621 million tons of cement, of which six provinces, namely Shandong, Guangdong, Jiangsu, Hebei, Zhejiang and Henan each posted an output of over 40 million tons and combinedly contributed to 51% of the nations total production. An increase of over 20% was registered for the cement production in Tianjin, Jiangsu, Gansu and Shanghai.See Table 1-3 on the cement production of the top six provinces and their weight in the national output.Table 1-3: Cement Output and Weight of Six ProvincesProvinceOutput (100 million tons)Weight (%)Shandong 0.683111%Guangdong0.55899%Jiangsu0.49688%Hebei0.49688%Zhejiang0.49688%Henan0.43477%Others3.042949%Total 6.21100%In 2001, Chinas plate glass output stood at 204 million weight crates, up 14.48% over the previous year. A growth rate of over 20% was registered for the six provinces and regions of Sichuan, Zhejiang, Shanxi, Jiangsu, Inner Mongolia and Shandong; the provinces each with an output of over 10 million weight crates were Henan, Hebei, Jiangsu, Shandong, Liaoning and Zhejiang, which combinedly generated 57% of the nations total plate glass production.See Table 1-4 on the top six provinces in terms of plate glass production and their weight in the nations total.Table 1-4: Distribution of Plate Glass Production in 2001ProvinceOutput (100 million weight crates)Weight (%)Henan0.285614%Hebei0.224411%Jiangsu 0.224411%Shandong 0.18369%Liaoning0.16328%Zhejiang 0.1025%Others0.856842%Total 2.04100%See Table 1-5 on a summary of main economic indicators for the building materials industry in 2001.Table 1-5: Summary of Main Economic Indicators for Building Materials IndustryIndicator20002001GrowthIndustrial added value (100 million yuan)916.261023.0011.65%Sales (100 million yuan)2832.453146.0011.07%Total profit (100 million yuan)93.77118.9126.81%Total import and export value (100 million US dollars)50.5956.7212.12%Import (100 million US dollars)21.9223.728.21%Export (100 million US dollars)28.6733.0015.11%Cement output (100 million tons)5.836.216.52%Plate glass output (100 million weight crates)1.822.0412.09%(6) Reasons for Industrial Profit GrowthAs Zou Chuansheng, vice-chairman of the China Association of Building Materials Industry, holds, the good economic efficiency of Chinas building materials industry in 2001 was attributed mainly to three reasons. First, associated industries grew fast, which had a marked pulling role on the market demand for building materials. Second, measures in the building materials industry such as aggregate output control and elimination of backward capacities centering on structural adjustment began to pay off. Third, a number of large enterprise groups with strong competitiveness were set up in the building materials in