Asia’s cement-usage driving global economic growth

Asia’s cement-usage driving global economic growth

Apr 21, 2015

Last month, I had the pleasure of reading a Washington Post blog “How China used more cement in 3 years than the U.S. did in the entire 20th Century” by Ana Swanson that initially surprised me.

Referring to Bill Gates blog, Swanson noted that between 2011 and 2013 China used more cement than the US in the entire 20th Century.

“It’s a statistic so mind-blowing that it stunned Bill Gates and inspired haiku,” she said.

More importantly, after following her logic explaining why China’s huge consumption was plausible, I understood why Asia is destined to continue driving 21st century global growth.

Six point four gigatons

Gates obtained his cement statistics from historian Vaclav Smil, who cited the U.S. Geological Survey.

Smil noted that America’s cement consumption during the whole 20th century added up to around 4.4 gigatons (1 gigaton is roughly 1 billion metric tons).

In comparison, he said China used around 6.4 gigatons in the three years of 2011, 2012 and 2013. (data from International Cement Review, an industry publication based in London)

The U.S. Geological Survey also provides similar estimates for China’s cement consumption.

“ According to Hendrik van Oss, a mineral commodity specialist at the USGS, China’s cement consumption between 2010–12 was about 140 percent of U.S. consumption for 1900–99.”

China’s massive urbanization

Swanson noted that China was urbanizing at a historic rate, much faster than the U.S. did in the 20th Century.

“More than 20 million Chinese relocate to cities each year, which is more people than live in downtown New York City, Los Angeles and Chicago combined.”

This massive change, she said has taken place in less than 50 years. “In 1978, less than a fifth of China’s population lived in cities. By 2020, that proportion will be 60 percent.”

China's cities, Swanson said have been transformed to make room for this influx of people.

“By some estimates, half of China’s infrastructure has been built since 2000, with new rail networks, interstates, dams, airports and high-rise apartment buildings springing up across the country.”

Big and small cities

Although everyone understands the massive growth of major Chinese cities such as Shanghai, Beijing and Guandong, Swanson said what’s more impressive is the incredible number of “small” cities that no one has ever heard of.

“In 2009, China had 221 cities with more than a million people in them, compared with only 35 in Europe.”

Even more impressively, Swanson said relatively minor cities like Zhengzhou and Jinan are more populous than Los Angeles or Chicago.

Demographics and building material shift

Referring to a Goldman Sachs study, Swanson said China’s population today is only about four times as large as the U.S., but it is 15 times as large as the U.S. was in the early 20th Century, and nine times the size of the U.S. in 1950.

These statistics only partly explain why China’s cement consumption has been so massive.

The world, she said has also experienced a shift in building materials.

“In 1950, the world manufactured roughly as much steel as cement; by 2010, steel production had grown by a factor of eight, but cement had gone up by a factor of 25.”

Unlike in the US, China’s relative lack of lumber has forced many people to live in high- or- low-rise buildings made out of cement.

“Finally, China's cement industry is much larger than it should be. Many of China's cement manufacturers are state-owned, and they benefit from government support and access to cheap capital.”

No Comments Yet.

Leave a comment