Mr Tom Albanese CEO of Rio Tinto Group sees economic expansion in China, the biggest metals user slowing to as low as an annual 6% this decade after a 30 year run of average 10% growth.
Mr Albanese said that “We should temper our forecasts with the thought that nothing is forever. China’s growth rates, as amazing as they are, are bound to flatten.”
Mr Albanese said that “We can expect to see a lower GDP growth rate over the next decade; perhaps a decline to levels of 6% to 7% in the coming 10 years compared to around 9 percent in 2010. This is still robust compared to mature economies and still represents very large absolute levels of growth.”
Mr Albanese flagged growing inflationary risks in Asia as the region seeks to rein in the effect of the government stimulus. He said that “Asian countries are contending with inflationary risks arising from substantial stimulus packages that were put in place last year. Measures will have some negative effects on our markets.”
This year the economy is cooling as the Chinese government trims credit growth from last year’s record USD 1.4 trillion and discourages multiple home purchases to restrain surging property prices. Economic expansion was 10.3% in the second quarter, lower than the 11.9% in the first when fiscal spending to fend off a global recession spurred growth.