The chief executive of global mining giant Rio Tinto, Sam Walsh, has expressed strong confidence in the Chinese government pulling “levers” to keep the economy on track, as he revealed that Rio’s internal economic measures for the nation were broadly in line with Beijing’s official estimates.
Mr Walsh admitted the world economy had become far more “volatile” and that potential “shocks” are in store for commodity markets, but was overall upbeat on China in the face of growing unease about its prospects.
Speaking in Washington on Friday, Mr Walsh pointed to reassurance from Chinese Premier Li Keqiang at the World Economic Forum on Thursday that China would avoid a hard landing and that Beijing will meet its 7 per cent growth target this year.
“Rio Tinto endorses that. We believe it will be around that,” Mr Walsh said, after delivering a speech at the US Chamber of Commerce.
“I am positive about China and I am positive about the Chinese leaders and what they can do in relation to pulling the levers they need to pull to keep the economy motoring,” he added.
Rio has a large exposure to China through the sale of iron ore, copper and other commodities used to construct buildings, bridges, roads and vehicles.
A slew of recent disappointing economic reports suggests China may be slowing faster than most economists had anticipated.
A shock devaluation of the yuan last month, a stock market plunge and tumbling commodity prices have amplified concerns about the fallout for trading partners and mining companies who have helped feed China’s earlier voracious demand for raw materials.
Iron ore imports to China fell 14 per cent in August, a development analysts blamed on softening demand, a factory explosion at Tianjin and a seasonal slowdown.
Mr Walsh said the drop was a “month to month” variation and that iron ore capacity being pulled from the global market by higher cost producers contributed.
“There is not a build up of stock at Chinese ports and everything is indicating the current iron ore price has reached some measure of stability,” Mr Walsh said.
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