Cement Energy and Environment

ICR: Some economists are concerned that the pace of growth in China is too fast and may be unsustainable - do you share this view? CCA: It is important to look not only at the economic growth indicator, but also the differences in national circumstances when judging whether a country'~ economic growth is too fast. China's economic development is based on a low per capita income. Moreover, China's infrastructure is weak and its people work predominantly in agriculture. The challenge is to try to satisfy peoples' basic needs and alleviate poverty, and also to take into account the coordinated development of urban and rural areas. To develop from an agricultural to an industrial nation, economic growth must appear quickly, even during a period of global financial crisis. China can still maintain the current pace of development and the speed is sustainable. The Chinese government is working on the inflation bubble, the income gap and other issues and taking measures to suppress any hardship during the transition . It has the ability to control the growth rate to maintain sustainable economic development. ICR: How will the Chinese construction sector perform in 2011 compared with last year? CCA: China's construction industry remains in a period of major development. At present, China's urbanization rate is about 50 per cent. The construction industry will experience rapid development for a very long time to achieve the desired urbanization rate of 65 per cent. This is also a great opportunity for cement, steel, other building materials, as well as construction machinery and labour for the construction market. Cement demand ICR: 2010 was a record year for cement consumption in China, with demand reaching_around 1.8bnt. What were the main drivers? CCA: In 2010, China's fixed asset investment growth rate remained at a high level of 23.8 per cent. Fixed asset investment reached CNY27trn, of which the real estate investment was more than CNY4.8trn, with su?h high levels d~iving up demand for cement. ICR: A high proportion of cement in China is consumed in the eastern markets. How strong is demand growth in the central and western regions of China? CCA: The eastern market accounts for more than 33 per cent of China's total cement output, while the central and western regions account for 48 per cent, showing that investment in key areas will be in the underdeveloped central and western regions to reduce the gap with the more developed eastern areas. Cement consumption in the southwest region is the fastest growing market, reaching more than 35 per cent. ICR: What are the main end– uses for cement consumption within the construction sector? CCA: The main types of cement consumption in China can be roughly divided into three segments: key infrastructure projects, urban construction and real estate, rural consumer market. Each segment accounts for a third of cement "The Chinese government is working on the inflation bubble, the income gap and other issues and taking measures to suppress any hardship during the transition. It has the ability to control the growth rate to maintain sustainable economic development. " consumption. ICR: What is your forecast for cement consumption growth in 2011? In which regions will cement demand be strongest /weakest? CCA: It is estimated that the contracted level of total investment construction Therefore, the in China's is limited. demand for cement remains strong. Conservative estimates in 2011 are that cement consumption will 34