Chen Guoqing, president of China’s stone association CSMA, analyzes the recent import/export stone statistics of his country
We have published the statistics of China’s stone imports and exports in 2022 (see https://www.stone-ideas.com/99231/chinas-natural-stone-imports-and-exports-in-2022/). The China Stone Material Association (CSMA) issued the data. The association’s president, Mr. CHEN Guoqing, gave us some explanations of the numbers:
Stone-Ideas.com: In 2022, there was a sharp year-on-year decline (-19.2%) in stone imports in value, following a similar decline in 2020 (-12.3%) and strong growth in 2021 (+25.7%). So in general, Chinese stone importers have been reducing their imports by -10%* per year in the last three years. Why: is there less stone consumption in China, or do the Chinese consume more stone from home production? If the Chinese consume more stone from China: Why that? What has changed? Was there a campaign, a campaign by the CSMA, or new guidelines by the government?
Chen Guoqing: The main reason for the decline in stone imports is the changes in the Chinese market. Stone imports in China reached a historical high in 2014. Then, with the declining market demand from the project sector, the imports decreased significantly, with a decrease of -18.7% in 2015 and a further decrease of -4.1% in 2016. With the strengthening of China’s environmental protection supervision in 2017, domestic quarrying has been affected, and the imports have resumed growth. In 2020, due to the pandemic, stone imports fell sharply again.
In 2021, as to the optimistic expectation of the global economy, especially the domestic economy, the import of stones increased again. In 2022, construction operations were seriously disturbed nationwide due to the pandemic, and the import quantity of stone materials fell sharply again.
With the adjustment and improvement of the global pandemic prevention and control policy in 2023 and the gradual recovery of the international economy, China’s import demand for stone will increase slightly. The general trend will be downward in quantity and upward in quality and value. Consumption upgrading will take the stone industry towards better quality and better service. Compared with 2017, the import prices of Italian and Brazilian stones had increased by more than +70%. However, there is still a long way to consumption upgrading, especially for stone products.
Stone-Ideas.com: Looking at the stone imports by material, we see significantly less marble but only a slight decline in granite – have the Chinese customers changed their taste and now prefer granite instead of marble? If so, again: where does that change come from?
Chen Guoqing: The main reason is the change in market demand. On the one hand, the demand for interior decoration has declined since 2014; on the other hand, the pandemic had a more severe effect on interior decoration projects, and marble is more used in interior decoration, while granite is more used in outdoor projects. In addition, to boost the economy, the government’s investment in transportation and other infrastructure has increased, which brings more demand for granite in municipal projects. The competition for interior decoration materials is always harsh. Marbles face competition from other natural stones, like granite, quartzite, limestone, and also from engineered stones, sintered stones, glass, decorative concrete, wood, and other interior decoration materials. Therefore, although the overall demand declined, the decline of granite demand was far lower than that of marble.
Stone-Ideas.com: For the first time, India is in the first place of stone suppliers for China. Turkey is only in second place. Why that change?
Chen Guoqing: : In terms of quantity, since 2015, India has been the largest sourcing country of stones to China. In value, India surpassed Turkey already for the third time, after 2015 and 2020. Granite is popular in China’s municipal projects. In addition to domestic granite, India is our top supplier of granite. Compared with other countries, Indian granite is more competitive in price.
Stone-Ideas.com: As to exports: last year, there was a strong decline by the ton (-11,7%), but by value, there was an extreme growth of +22,8%. That means: we have a significant growth of value per ton or value added per ton, respectively. Is behind that a general strategy of the Chinese exporters? What is this value-added the Chinese exporters give their products: sophistication in design, using sophisticated technologies?
Chen Guoqing: The reasons are complex. Our association has always advocated for the quality of China-made products, optimizing the structure of products, and increasing the proportion of value-added products. Of course, the rising costs, changes in the product structure, and the orders from some large projects are the main reasons for higher prices of the year. Although the quantity decreased by -11,7% in general, the fast gaining of value was mainly from Asian countries. In addition, the exchange rate may even impact the price.
Stone-Ideas.com: Comparing exports to the US to those to Europe, we have growth in the US and a continuous decline in Europe. There had never been such a difference – why now?
Chen Guoqing: The export of Chinese products to the United States and Europe has declined for years. Europe has always been China’s largest market in stone outside Asia. Since 2018, China’s exports of stone to Europe have declined, especially in the three years of the pandemic. Compared to 2019, the stone to Europe dropped by -56.5% in quantity in 2022. One reason is that Europe is rich in its stone resources; on the other hand, the cost increase of stone from China may also impact exports. With the end of the pandemic, we hope more Chinese enterprises go to Europe, who do understand the demand indeed, and provide more competitive products.
Due to trade conflicts between China and the US, China’s stone exports have declined since 2018. In 2019, the stone exports in quality and value declined sharply by -39% and -46.3%. In the last three years, the export of stone to the US has shown a recovery growth due to its high demand and the relatively stable supply chain in China. However, China’s stone exports to the US in 2022 are still far below that in 2018. The demand growth for sintered stone and engineered stone products in the US also impacts the need for natural stone. That should be a global problem.
Stone-Ideas.com: What is the role of ‘green’ production in the Chinese stone sector? Do Chinese customers ask for such products?
Chen Guoqing: Compared with other decoration materials, the production process of stone products is ultra-low energy consumption and green naturally. The trending green production and consumption will make such advantages more recognized. China pledged to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060. A series of green standards in the stone industry was created or is to be released, such as standards for green quarry, green plants, and green products. According to the Assessment Standard for Green Building (GB/T 50378-2019), the proportion of green materials used shall be at least 30%. Certification for green products will reach high levels. Green consumption is a profound shift to the green and low-carbon transformation in production and lifestyle. The Implementation Plan for Promoting Green Consumption proposed that ‘by 2025, the concept of green consumption will deeply root in the hearts of the people, and the market share of green and low-carbon products will increase significantly; by 2030, the green consumption mode will become the conscious choice of the public, and green and low-carbon products will become the mainstream of the market.’ Our association will strengthen international exchanges and cooperation in this field, work with overseas counterparts to promote the green development of the stone industry and boost the high-quality and broad application of stone products.
China Stone Material Association (CSMA, Chinese)
* To keep the many figures reasonably clear, we have placed a minus in front of the numbers for decreases, even though this is mathematically not correct.
(03.04.2023, USA: 04.03.2023)