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The head of mining giant Rio Tinto says he isn’t worried about China‘s slowing growth — and he sees “lots of opportunities” in the world’s second largest economy.
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“There is no doubt that the Chinese economy is still slowing down, but it is as expected. Even growing 6, and 6 and a half percent, is a massive number,” CEO Jean-Sébastien Jacques told CNBC’s Eunice Yoon at the China Development Forum in Beijing on Saturday.
Compared with growth rate of Europe, the U.S. and Canada, China’s projected expansion of 6 to 6.5 percent is still a “big number,” Jacques said.
China is a large-scale buyer of mined commodities from Australia, where Rio Tinto — one of the world’s largest metals and mining companies — has major operations.
The U.S. Federal Reserve downgraded its economic outlook for 2019 last week, and now sees growth of just 2.1 percent for the United States this year, down from the 2.3 percent estimate in December.
This month, Europe’s central bank cut its growth projection for the bloc — to 1.1 percent in 2019 and 1.6 percent in 2020 — and announced a slew of stimulus measures.
Jacques said that Rio Tinto is well placed to benefit from China’s infrastructure spending.
It is “very good for us,” he said. “The more iron ore you need, high quality iron ore, the more bauxite, the more copper, the better it is for Rio Tinto … We are one of the first players here, we’ve been there for more than a hundred years.”
On the ongoing trade negotiations between the U.S. and China, Jacques said: “I’ve got no doubt in my mind there would be a deal — the sooner the better.”
The U.S. and China have been embroiled in a trade battle since last year. Washington has levied duties on $250 billion of imports from China, while Beijing has retaliated with its own tariffs on $110 billion of American products. The countries have been in talks over not just their trade imbalance but also American complaints that China forces U.S. companies to hand over technology in exchange for market access.
Jacques said that escalating tariffs have had “no impact for us in terms of profitability” — as the increase in levies have been borne by the end user, such as Americans buying cares, bikes and iPhones.
However, he reiterated that “trade is absolutely essential for us … because 90 percent of our products move from one country to another.”
He acknowledged that China is an essential market for the mining giant. “Depending on the year, depending on the commodity prices, (China accounts for) between 45 and 50 percent of the turnover of Rio Tinto, so you can imagine that our best interest is for the U.S. and China to agree (to) a deal,” Jacques said.