Fortescue upbeat about China's growth

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Sep 2008

China's massive steel industry is expected to rebound next year as a feverish pace of construction returns, Fortescue Metals Group Ltd executive director Graeme Rowley says. There is no doubt China has "put the brakes on" its rapid urbanisation in recent months and has accordingly dropped steel prices, which had flowed on to a lower spot price for iron ore, Mr Rowley told media Tuesday. However, he remained optimistic about China's ongoing growth driven by internal demand for its products despite the crisis in the US financial markets.
"All the evidence that we have seen is that China can isolate itself from the damaging economic destruction that is happening in the US," Mr Rowley said.
"We have had some pretty good advice last week from some people in China who were very confident about its ability to withstand the financial crisis.
"Clearly it has such an enormous population, and is so focused on its own urbanisation and growth and development of general living standards, that they are prepared to continue to finance (industry or projects).
"Of course, there will be a slowdown as a result of lower demand (for China's exports) from the US."
"But when growth drops from 11 per cent to eight per cent, it is still a very strong growth position."
To sustain and grow Fortescue's operations the company would consider joint ventures or investment by sovereign funds such as China's EXIM Bank, Mr Rowley said.
He said it was not currently in discussions.

Source: Sydney Morning Herald