Forecasts that China’s annual economic growth will return to 8% by the end of the year may be too optimistic, Australia Chinese Business Council president Duncan Calder told MINING DAILY.
“I wouldn’t say I was very confident it could happen,” he said.
“It could be growing at 8% and above at the end of the year, but whether or not the overall average for the whole year will end up being 8%, I don’t know.”
According to figures from global investment and banking firm Goldman Sachs, China’s annual growth as of December 2008 had fallen to 6.8% from as high as 13% in 2007.
The country’s growth for the actual quarter was only 1.2%.
Calder said a new multi-billion dollar stimulus package from the Chinese government will aid growth, but it may be some time before obvious financial effects are felt.
“The new announcement obviously helps, but the question is how fast all of this will flow through to the economy,” he said.
“It will be late in the year or early next year before the all of the full benefits flow through from this fiscal stimulus package.
“There needs to be some time to see how quickly that will flow into the market.”
Whether its revival comes sooner or later, Calder believes that China ultimately has no choice but to take major steps to ensure resources for the future.
“China really has no choice in the long term but to invest in large scale, long life resources projects, particularly in those key commodities in which it has a shortage,” he said.
Such investment means that Australian resources such as nickel, coal, and high quality iron ore will continue to be sought after by China on a large scale.