In 2015, the building materials industry faced a severe situation characterized by serious overcapacity, weak market demand, and increasing downward pressure. It earnestly implemented the central government’s decisions and arrangements, made every effort to overcome various difficulties, and although the industry’s economic performance tended to slow down, it generally remained stable overall.
　 　I. Operational Characteristics in 2015  
　　 (1) Product output has both increased and decreased. Cement and flat glass production, both suffering from severe overcapacity, reached 2.35 billion tons and 740 million weight boxes, respectively, down 4.9% and 8.6% year-on-year. This marks the first year-on-year decline in cement production in 25 years. Meanwhile, output of low-energy-consumption and low-emission processed products continued to grow positively: commercial concrete reached 1.64 billion cubic meters, up 2.1% year-on-year, and tempered glass totaled 460 million square meters, up 7.5% year-on-year.
　　 (2) The growth rate of main business revenue has declined significantly. The main business revenue of building materials enterprises above a designated size reached 7.3 trillion yuan, representing a year-on-year increase of 3.3%, with the growth rate declining by 6.8 percentage points compared to the previous year. Among these, cement manufacturing generated 889.7 billion yuan, down 9.4% year-on-year, and flat glass production totaled 59.6 billion yuan, down 14.3% year-on-year. Cement products, architectural ceramics, and glass fibers achieved revenues of 924.8 billion yuan, 451.1 billion yuan, and 165.4 billion yuan, respectively, representing year-on-year growth rates of 3.2%, 2.9%, and 9.7%.
　　 (3) Economic benefits have明显 declined. Large-scale building materials enterprises achieved profits of 449.2 billion yuan, a year-on-year decrease of 6.9%. Among them, the cement industry reported profits of 33 billion yuan, down 58% year-on-year, while the flat glass industry posted profits of 1.2 billion yuan, a year-on-year decline of 12.4%. Although industries such as fiberglass, thermal insulation materials, and sanitary ceramics within the building materials sector continued to see relatively rapid profit growth—particularly the fiberglass industry, which expanded at a rate as high as 18%—these gains were still insufficient to offset the substantial decline in the cement industry.
　　 (4) The product price is at its lowest in five years. During the 12th Five-Year Plan period, prices of building materials followed a parabolic trend. In 2015, the overall ex-factory prices were 3.3% lower than in 2014, marking the lowest level over the five-year period. Specifically, the average annual ex-factory price of cement was 270 yuan per ton, down 29 yuan from 2014; and the average annual ex-factory price of flat glass was 63 yuan per weight case, down 0.3 yuan from 2014.
　　 (5) Investment growth has slowed down, but its structure has been optimized. Throughout the year, the building materials industry completed fixed-asset investments totaling 1.55 trillion yuan, representing a 6% increase over the previous year. Among these, investment in the cement and flat glass industries continued to decline; however, the low-energy-consumption processing sector saw growth significantly higher than the industry average. Concrete and cement products, quarrying and processing of construction stones, bricks and tiles, and lightweight building materials ranked among the top four, each with annual investments exceeding 100 billion yuan.
　　 (6) The export structure is improving. In 2015, China's exports of construction materials reached US$38.3 billion, representing a year-on-year increase of 6.1%. Although this growth rate was the lowest since the global financial crisis of 2008, the competitiveness of China's construction materials exports has strengthened when viewed from the perspective of export product prices. Throughout the year, exports of architectural and sanitary ceramics totaled US$13.8 billion, up 15.8% over the previous year. In terms of export product categories, three major product groups—architectural and sanitary ceramics, building stones, and architectural and technical glass—accounted for 69% of total exports.
　　The “gradual improvement amid decline” and “steady progress with overall positive trends” in the building materials industry’s economic performance in 2015 were largely attributable to three key factors: First, the initial effectiveness of resolving excess production capacity is becoming evident. Investment growth in the cement and flat glass industries has continued to slow down; among all sub-sectors, cement has fallen to fifth place, with annual investment falling below 100 billion yuan, while flat glass ranks thirteenth—both developments have effectively curbed the decline in profitability. Second, technological advancements have significantly accelerated. The adoption of technologies such as desulfurization, denitrification, and dust removal has been rapidly promoted across the industry. Co-processing urban waste and industrial by-products in cement kilns is gaining strong momentum, and the integration of intelligent manufacturing with information technology is speeding up, thereby driving down industry operating costs. Third, the development of emerging industries is picking up pace. High-value-added products such as fine ceramics, scintillating crystals, and high-pressure-resistant composite materials are becoming increasingly mature. Meanwhile, emerging industries—including cement products, lightweight building materials, thermal and sound insulation, and technical glass—are maintaining rapid growth rates of over 10% year-on-year.
　　 II. The Current Situation and Challenges Faced

The building materials industry not only shoulders the important responsibility of providing construction and industrial materials for national economic development and improving living conditions, but is also at a critical juncture of structural adjustment and transformation and upgrading. During the 13th Five-Year Plan period, growth in the building materials sector driven by investment will become even more limited, while constraints related to resources, energy, and the environment will continue to intensify, compelling the industry to accelerate its shift toward a new development model. Currently, the main issues affecting the stable economic performance of the building materials industry are:
　　 (1) The contradiction of overcapacity remains prominent. Take cement as an example: Although the momentum of capacity expansion has been noticeably curbed, in 2015, newly completed capacity continued to come online. Severe overcapacity has triggered vicious competition in the market, driving product prices steadily downward, sharply reducing corporate economic benefits, and rapidly increasing the number of loss-making enterprises in the industry.
　　 (2) Demand for traditional industries is declining. At the beginning of 2016, as the growth rate of nationwide fixed-asset investment slowed down and the share of real estate investment continued to decline, consumer demand in the traditional building materials industry became less optimistic. Consumption of cement, bricks, tiles, and blocks—products closely related to infrastructure construction—was all on the decline.
　　 (3) Disruption of the market competition order. To reduce emissions of atmospheric pollutants, some enterprises have adopted clean energy sources through technological upgrades and have installed environmental protection facilities such as denitrification and dust removal systems, thereby increasing their production costs. Meanwhile, some enterprises have failed to fully equip themselves with the necessary environmental protection measures, leading to unfair competition. Furthermore, there is also the issue of unlicensed production and the influx of counterfeit and substandard products into the market.
　　 III. Key Priorities  
　　2016 marked the beginning of the 13th Five-Year Plan. The building materials industry must seize new opportunities, adapt to the new normal, and firmly establish the development philosophy of innovation, coordination, green development, openness, and shared benefits. It should accelerate supply-side structural reform and focus on the following key areas of work:

(1) Vigorously promote “capacity reduction” in the cement and flat glass industries to stem the downward trend. We will resolutely implement the central government’s relevant directives and curb the reckless expansion of production capacity in the cement and flat glass industries. We will strictly enforce mandatory standards on energy consumption limits and pollutant emissions, thereby compelling less competitive capacities to exit the market. We will strengthen corporate social responsibility and continue to comprehensively promote off-peak production of cement clinker during the heating season in northern regions where heating is required.

(2) Promote the production and application of green building materials and accelerate the upgrading and replacement of bulk products. Implement the "Action Plan for Promoting the Production and Application of Green Building Materials," and advance the greening of building material production, the convenience of building material consumption, the high-end development of building material products, and the integration of building materials with construction. Accelerate the establishment of public service platforms, standardize the management of green building material evaluation and labeling, and release a list of green building material labeled products. Vigorously develop special cements, high-end glass, new types of ceramics, biomass-based building materials, and lightweight, high-strength wall materials.

(3) Accelerate the advancement of supply-side reform and focus on “addressing shortcomings.” Adhere to the combination of demand-driven and innovation-driven approaches, and strengthen the supply of new and scarce products. Focus on developing new materials such as glass fibers and their composite materials, liquid crystal glass substrates, and fine ceramics. Promote the deep processing of non-metallic minerals including fluorite, graphite, and kaolin, and vigorously develop functional mineral materials.

(4) Support enterprises’ technological innovation and do everything possible to “reduce costs.” Carry out comprehensive upgrades to ceramic production lines, integrating denitration, desulfurization, and dust removal. For segments in the building materials industry that involve large volumes, widespread operations, repetitive tasks, and high levels of risk, promote smart manufacturing and robotic substitution. Support cement enterprises around urban areas in undertaking collaborative treatment technology upgrades. Leverage the advantages of building materials equipment, seize the strategic opportunities presented by the Belt and Road Initiative, and encourage enterprises to “go global.”

(5) Strengthen monitoring of economic operations and promote the healthy development of the industry. Leveraging the advantages of industry regulators and industry associations—being close to enterprises and serving the industry—closely monitor industry operations, promptly identify and actively address key, pressing, and challenging issues, protect and stimulate the vitality of market entities, and promote the healthy and sustainable development of the building materials industry.