Analysis on major drivers of cement consumption during the urbanization process in China

Accompanying by the rapid urbanization process of China, unprecedented amounts of cement have been poured into urban construction over the last decade. Since research is still scarce on the factors underlying the cement consumption, the motivation of this paper is to provide insight into cement-based socioeconomic metabolism and to improve understanding of the linkage between human activities and cement consumption. To explore the key impact factors of cement consumption, an extended STIRPAT model is exploited in this paper to examine the effect of population, Gross Domestic Product (GDP) per capita, cement consumption intensity, fixed investment and urbanization level with regional panel data of China from 2005 to 2013. The empirical results indicate that fixed investment and GDP per capita are the decisive driving factors of cement consumption. The unbalanced investment between infrastructure and people's livelihood reflects bias urbanization policy in China. Inverted-U shaped nexus between cement consumption and urbanization, as well as GDP per capita, are observed in the empirical results. Moreover, regional heterogeneities are taken into account in the model estimation. On the ground of the empirical findings, several policy recommendations are provided for policy makers. It is suggested that policy makers should take account of the regional discrepancy and implement a sustainable urbanization strategy to curtail cement consumption. Only when excessive fixed investment is curbed does the enthusiasm of cement consumption calm down.