The institute of Technical Information for the Building Materials Industry of China has revealed that the Chinese flat glass industry recorded overall losses in 1997. The total loss came to about Rmb 2bn (by comparison, 1994 profits reached Rmb 3,800m). Whilst during 1992-1995, flat glass furnaces were making a lot of money, at the moment they seem to be "burning" it. The mean ex-works price for 5mm clear float glass is Rmb26.80/sq.m., thus, Rmb12 lower than the 1994 price. The ex-works price is lower than production costs. There are many reasons for this crisis. Firstly, glass capacity has increased at a quicker pace than demand, and glass supply is higher than demand. At the end of 1997, flat glass capacity was 9.49m t/year, in 1997 demand was 8m tonnes. Secondly, industrial structure is not necessarily rational &, thirdly, fragmented markets are out of order.
