BHP, the world’s largest mining company is disappointed with China.
But not that downcast.
Here’s an offering from chairman Jac Nasser:
In Japan, the renewed policy push is positive for medium-term growth, if the government can achieve its stated objectives.
In China, which accounts for about 30 per cent of our revenue, weaker trade and softer manufacturing activity have been a slight drag on growth relative to expectations.
However, China is only a “slight” drag at the moment. As a market it looks good, especially over the next 15 years when China, and other parts of Asia, could deliver a 75 per cent increase in demand for commodities.
Nasser spread out his take on China at BHP’s annual general meeting in London:
In the past 20 years, more than 650 million people have been lifted out of poverty in China alone.
Over the next 15 years, it is expected that around 250 million more people will move from the Chinese countryside to cities, while Asia’s middle class will reach about three billion people.
With employment conditions and income growth remaining resilient, we believe the Chinese Government has room to pursue reforms that support its agenda of stable, long term growth.
Domestic demand, as well as the types of goods and services produced in China, will continue to underpin a rise in the absolute demand levels for commodities.
We expect the Chinese economy to grow at over seven per cent next year.
China, and other emerging economies, will be the major drivers of economic growth in the long term, which could deliver up to a 75 per cent increase in demand for some commodities over the next 15 years.
BHP is concentrating on increasing production by about 8 per cent over two years to meet increasing demand.