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Winds Of Change In China's Stone Industry
Post Date: 16 Apr 2009 Viewed: 899
After the meteoric rise China's stone industry seems to be facing the winds of change. In the last ten years it grew from strength to strength challenging the leadership in the industry controlled by Italy .Be it stone production, consumption or export, China today ranks first in the world with stone output and export at 50percent and 15 percent respectively of the world .By the end of 2007 China's stone output is expected to reach 28,000,000 tones. The export is expected to be 18,500,000 tones valued at US$3.6 billion; import 7,500,000 tones valued at US $1.2 billion and domestic consumption 260,000,000 sq m.
The figures describe the mammoth size of China's stone industry whose base is mostly at Fujian and Shandong, the two largest raw material production and processing centres. Guangdong the other province has a strong base for processing of imports. 85 percent of Chinese stone output come from these three provinces, which mostly include marble and granite products.
The tremendous upswing seen in China's stone industry in production export, import and domestic consumption may be attributed to several reasons out of which events like 2008 Olympic Games, Shanghai 2010 World Expo and massive house construction activity are the most important ones.
But ,what next? A major question that naturally comes in people's mind. The experts in the industry are now talking of slow down phase in Chinese economy after the Olympic Games .But there are people from the industry who believe house construction in China will remain strong for another 15-20 years.
However winds of change have already started blowing. The recent adjustment and alteration in Government policies is expected to bring great change in stone production, import and export structure. This is because of Government's intention to implement the concept of scientific development and harmonious society .Moreover Chinese Government is now conscious towards mine exploitation and wants strict policies on export of high energy consumption, high pollution and resource -based products. The government's discouragement of export of resource -based products will take the international price of Chinese stone to higher level .This is likely to affect export of Chinese stone products.
Moreover several subsidies given by Chinese Government to its manufactures and exporters have either been removed or cut down. With this and the fluctuating foreign exchange rates, as well as because of the unexpected high rise in the cost of sea transport, Chinese stone products are no longer economical in the international market.
This changing picture of China's stone industry may make many think China is losing its grip over the leadership in stone production and export. Yes, Chinese producers are finding it difficult to keep the price of their products low. Only time will tell how they overcome the price crunch. The situation is really alarming. The freight costs for container transport from China have increased by up to 50 percent in the last six months.
Though changing government policies and rapid rise in sea freight prices have baffled importers of Chinese stone products, China has shown remarkable rise in its raw and semi-finished stone material imports. In the next few years it intends to become the world centre for stone processing. The annual import of 40,000,000 sq m of stone slabs by China provides wide scope for foreign exporters. The imported marble blocks, granite blocks and marble slabs account for 95 percent of China's total imports. India has the capacity to fulfill China's requirements with exclusive varieties in granite: Absolute Black, Paradiso, Vizag Blue, etc. and green marble. In the recent past China has reduced import duty on granite and marble blocks to zero to boost its imports.
It is in the interest of India to avoid export of marble and granite blocks and go ahead full steam to increase export of slabs. China is a huge country showing highest domestic consumption of stone, which is likely to stay for some time to come.
