Rio Chairman Sees Many Positive Signals in China Reform PlanElisabeth Behrmann
Rio Tinto Group, the world’s second-biggest mining company, said proposed economic reforms unveiled this month by China had many positive signals, underpinning continued demand for raw materials.
The Communist Party’s third plenum document “contained many positive signals, including the pledge to further open up border areas in the interior and support land reform,” said Jan du Plessis, chairman of London-based Rio, according to notes for a speech today in Sydney. “My long-term view of the Chinese economy remains positive and we expect to see continued, robust growth in demand for commodities.”
BHP Billiton Ltd., the world’s biggest mining company, yesterday said it was “confident” about China’s announced reforms as the nation transitions to a consumption-led economy from export and capital-led growth. The government of China, Rio and BHP’s biggest customer, this month pledged to ease the one-child policy and boost private investment, giving more influence to market forces and loosening government controls.
“Beijing is steering its economy through a major transformation –- towards growth eventually being led more by domestic consumption than exports and investment,” said du Plessis. “The reform process in China will gain momentum.”
Rio rose 0.6 percent to A$65.18 at 2:42 p.m. in Sydney trading.
The company, generating 91 percent of profit from iron ore last year, would “always be a diversified miner,” said du Plessis during a question and answer session after the speech. Rio wasn’t tempted to “make acquisitions or to diversify out of iron ore just to appear more diversified. We are content with our portfolio as it is,” he said.
China pledged to allow more private investment in state-controlled industries, loosen its one-child policy and expand farmers’ land rights, according to a Communist Party statement published by Xinhua News Agency on Nov. 15. The document, covering 60 measures, follows a communique issued Nov. 12 after a four-day party conclave in Beijing that omitted details for reforming the world’s second-largest economy.