COPPER CRUNCHLONG ON ADL, BGO, AZS
DJ China Official Aims To Allay Concern On Econ, Resources
Canberra, June 21 (Dow Jones) - China has successfully managed to cool parts of its overheating economy, while maintaining growth in key sectors, including external trade, Fu Ying, China's Ambassador to Australia, said Monday.
Fu also said China's strong demand for raw materials will continue for many decades. It already is a major global consumer of resources.
China has its problems and faces "serious challenges," she conceded, with the immediate concern of China's leaders being how to achieve a soft economic landing while cooling some sectors that were overheating.
As a result, China tightened money supply, increased controls on land use, and re-examined some licensing of projects, she said.
"The trend of rapid expansion of investment is curbed," Fu told a dinner here ahead of a conference Tuesday looking at the future for China's manufacturing and resources sectors.
"In the meantime, the industry and agriculture sectors have maintained healthy growth and the external trade is still rising," she said. "We are confident that the rapid and healthy development of the Chinese economy is achievable and sustainable."
Fu said that when China moved to cool its economy in May, shares in Australian mining companies slumped. This reflected concerns about a possible reduction in Chinese demand for overseas resources and a need for Australian companies to reconsider their plans for expansion, she said.
But China will remain a major consumer and importer of resources for decades to come, she said, citing three major reasons.
China's economy is undergoing profound and healthy adjustment and the role of resources as the fundamental supporting element of this will only be strengthened, she said.
China is "fairly rich" in resources, but with current consumption needs, there still is a big gap in the supply of raw materials, such as oil, gas, iron ore, gold, copper, bauxite and uranium, among others, she said.
"The supply for some is especially tight," she said.
China's economic expansion is driven by strong domestic and global demand, she said, with the country now the factory of the world.
Indeed, domestic demand is "waking up," she said.
"Pulled by these demand factors, there is no reason for you to worry that China's needs for resources won't continue," she said.
Australia is China's natural partner for resources cooperation, with growing interest in Chinese minerals circles in expanding business ties with Australia, she said.
The conference is being organized by the government's Australian Bureau of Agricultural and Resource Economics. Scheduled addresses include those by senior Chinese and Australian officials and analysts, and senior officers of major raw materials exporters, including BHP Billiton Ltd., Rio Tinto Ltd. and Royal Dutch/Shell Group's Australia unit.
Australia is a major global supplier of many minerals and energy products. Trade with China is growing rapidly, with two-way trade expanding 10% in 2003 to A$23.34 billion.
Ray Brindal, Dow Jones Newswires, 612-6208-0902
(END) Dow Jones Newswires
06-21-04 0530ET- - 05 30 AM EDT 06-21-04