Editorial comment

According to Chinese superstition, only one out of ten people born in the Year of the Goat finds happiness. Expectant mothers may therefore be encouraging their babies to make an early entrance into the world to avoid the 19th February cut-off when the calendar turns and the Year of the Goat begins. When it comes to the fortune of the country itself, however, perhaps it is best to look to analysts rather than astrologers.News reports in January this year told that China has surpassed the US to become the world’s biggest economy. In the same month, we were warned that growth had fallen to its slowest pace in 24 years – though still an enviable 7.4%, it was below the government target of 7.5%. The target for 2015 has yet to be announced, but Fitch Ratings is forecasting 6.8% growth this year and 6.5% in 2016. In Europe such numbers would be celebrated; in China, they are cause for concern. A downward trend is inevitable after almost three decades of double-digit growth. China has issues with bad debt and a stagnant property market, not to mention a smog problem that is, according to various figures, responsible for somewhere between 0.5 and 1.2 million deaths each year. Economy-wide debt has reached about 250% of GDP. The government has injected huge sums of cash into the economy, which have failed to have any significant impact on bringing down interest rates for businesses and industry. Despite all this, analysts do not seem overly concerned about consumption – the rising middle class continues to rise and with oil prices dropping, consumers should find themselves with more purchasing power.As for the aforementioned smog problem, China is working on it. Government targets to reduce emissions were reportedly met last year, with 7 million high-emission vehicles taken off the road and 50 000 coal-fired furnaces shut down, among other activities. The China National Coal Association reported in January that coal production had fallen 2.1% in the first 11 months of 2014 – the first time production has decreased since 2000. In November the government announced a cap on emissions from cement and steel plants, which stipulates that emissions from these industries remain at the same level in 2020 as in 2015. Since steel and cement are responsible for one fifth of the country’s total CO2 emissions, finding a way to stabilise their CO2 output would make a significant difference to the country’s environmental performance. So far, that way mostly seems to be getting rid of outdated capacity. For the steel industry, which produces more than China can use, another method is pushing production overseas – plans are already in place for Chinese steel plants in South Africa, Eastern Europe and South America. Could cement be next? Unlikely. Construction growth is still forecast at 8% in the short-term as demand from urbanisation and industrialisation continues to rise. Modernisation is ongoing.Speaking of modernisation, you may have noticed the new advert for a World Cement App. Subscribers can now download the digital version of the magazine to their iPad or Android tablet at no extra cost by visiting www.worldcement.com/cement-app. If you haven’t yet received your password, please email reader@worldcement.com and we will send it along.