Research Of FDI In China Cement Industry

In recent years, with the slow growth of social fixed asset investment and other factors, the cement industry has undergone a series of changes in market demand from high-speed growth to steady growth. In the same time, the industry also had some serious problems of overcapacity and disorderly competition. Considering the uncertainty of the future market and poor performance of the investment in China, foreign companies in the cement industry turn to hold the investment progress. In this paper, by analyzing the history of FDI in China cement industry, entry motivation, withdrawal reason and beneficial effect on China’s cement industry, proved that FDI plays a very important role in the progress of industrial structure adjustment of China cement industry. China cement industry need FDI and FDI still has large space to develop which need government to encourage and guide.Through the analysis of cement industry scale, characteristics and current problems, China’s cement industry was detailed elaborated. Also with the correlation analysis to forecast the future market demand for cement industry. Then, with the historical analysis method and quantitative analysis method, it elaborated investment capitals, production capacity and sales scale of FDI in cement industry. It shows that FDI’s proportion in cement industry is still very small and FDI is not the main reason cause the over capacity. In this paper, theoretical method also has been used to analyze the favorable influence brought by FDI which contribute to the acceleration of cement industrial upgrading and restructuring. We should further increase the introduction of foreign capital. Through the case analysis of Lafarge, the No.1cement global company, and its investment experience in China, further demonstrates the positive effect of FDI to China cement industry. Meanwhile, it analyzes the reasons behind investment stagnation in recent years. In this paper, cement industry data and a large amount of information related to FDI to be analyzed, and same to the reason of FDI turned from swarming in to remain stagnation. By the analysis, it affirmed the important status of FDI in the cement industry and necessity of introduction FDI into it. Also it gives some suggestions to government about how to keep and expand FDI in China cement industry.