China economy “slowing visibly”: Rio Tinto chief
China’s economy is “slowing visibly”, the chairman of mining giant Rio Tinto said Friday, but he expressed confidence that it will prove resilient to any sharp correction in other major economies. The miner provides key materials for China’s growth, with the Asian powerhouse accounting for 28 percent of its global sales of materials including iron ore, coal, aluminium, copper and diamonds, worth about US$16.7 billion. Chairman Jan du Plessis said the economic problems faced in the United States and Europe have led to greater scrutiny of China, but he remained upbeat about its prospects.“While the Chinese economy continues to grow at over nine percent annually, it is slowing visibly,” he told a business lunch in Sydney.
“However, an important difference between China and Europe or the US, is that the slowdown in China is largely the result of a lengthy and deliberate effort to tighten money supply and credit growth.”
This, he said, was an intentional safety valve to manage inflationary pressures that have been building up in the economy.
“While the declining prospects in the West will undoubtedly contribute to the Chinese slowdown, domestic demand remains strong,” said du Plessis, who added that debt levels among Chinese banks were manageable.
“That is why at Rio Tinto we continue to believe that China would be fairly resilient to even a quite sharp correction in the (Organisation for Economic Cooperation and Development) economies,” he said.
“Furthermore, although it will probably avoid the ‘shock and awe’ style of stimulus that we saw in 2009, if needed, China remains well equipped to support growth through a combination of fiscal incentives and monetary policy adjustments.”
Last month, China said its economic growth slowed to 9.1 percent in the third quarter as government efforts to tame inflation and turbulence in Europe and the United States curbed activity.
Growth in the world’s second-largest economy slowed from 9.5 percent in the second quarter to its lowest rate in two years.
“However, an important difference between China and Europe or the US, is that the slowdown in China is largely the result of a lengthy and deliberate effort to tighten money supply and credit growth.”
This, he said, was an intentional safety valve to manage inflationary pressures that have been building up in the economy.
“While the declining prospects in the West will undoubtedly contribute to the Chinese slowdown, domestic demand remains strong,” said du Plessis, who added that debt levels among Chinese banks were manageable.
“That is why at Rio Tinto we continue to believe that China would be fairly resilient to even a quite sharp correction in the (Organisation for Economic Cooperation and Development) economies,” he said.
“Furthermore, although it will probably avoid the ‘shock and awe’ style of stimulus that we saw in 2009, if needed, China remains well equipped to support growth through a combination of fiscal incentives and monetary policy adjustments.”
Last month, China said its economic growth slowed to 9.1 percent in the third quarter as government efforts to tame inflation and turbulence in Europe and the United States curbed activity.
Growth in the world’s second-largest economy slowed from 9.5 percent in the second quarter to its lowest rate in two years.
Comments
Post a Comment