China's removing rebates on exported cement will impact big producers in the short term, but in the long run will speed up industry reshuffle and encourage them to invest overseas, said Kong Xiangzhong, secretary general of the China Cement Association (CCA).

   Kong said the rebate removal, which will take effect as of early July, shows the Chinese government's containment policy on energy-and resource-intensive products as cement.

   In the short term, the policy will dent the export of major producers as Conch Cement, Huaxin Cement and Sunny Cement and joint ventures with Japanese, South Korean and Taiwanese companies, Kong said, pointing out at the same time that cement companies are well ready for the policy change since CCA president Lei Qianzhi has reiterated such a possibility several times before.

   As Kong deems it, China's cement export boom is based on strong international demand, rather than because of the government's export tax rebates. Therefore, the annihilation of the rebates will not harm the long-term development of cement producers but rather will facilitate the industry's reshuffle and encourage more domestic companies to set up plants or production lines overseas, Kong said.

   Because of price hikes of production materials, production cost of cement rose as well. In the meantime, many provinces have switched to charging truck drivers by cargo weight, hence sending up cement transportation cost. The cost of cement transportation has increased by 30-50 yuan per ton, Kong said. That will force cement producers to shorten cement transportation radius, he concluded.