China's cement demand will keep aslow growth rate in the following years, according to Lei Qianzhi, chairman of China Cement Association (CCA).

    The nominal growth rate of China's fixed assets investment was 27.3 percent in July, up 0.7 percent year on year. However, excluding price increase, it posted a declined real growth rate.

    The total output of cement in China increased 8.3 percent to 767 million tons in July, down 9.4 percent from the previous month.

    According to CCA, Southeast China, East China and central China will incur a lower growth rate of cement demands, but West China, Bohai rim areas and Northeast China's Heilongjiang Provinces will post a big demand for cement.

    Investment in cement production capacity in China increased 67 percent to 68 percent in the first seven months of 2008.

    Market experts worried that the 53 billion yuan of investment in the first half would enhance cement enterprises' production capacities in 2009, and break the balance of supply and demand in the market.

    CCA said the cement production capacity would not soar rapidly, as nearly 200 million tons of backward production capacity would be eliminated, offsetting 200 million tons of newly added cement production capacity in 2008 and 2009.

    Lei still warned that China's cement industry would incur a slump in 2009 as the demand continues to decline while production keeps expanding.

    He said that cement enterprises have to control their capacity utilization ratio to maintain profit.

    CCA predicted that the decline of cement demand would occur from 2018 to 2020. China's cement industry would still have a decade for its growth.