GO
Loading...

Australian CEOs Don't Fear a Chinese Hard Landing

Matthew Taylor|Reporter, CNBC Asia Pacific
Wednesday, 26 Oct 2011 | 2:48 AM ET

Australian CEOs at the Commonwealth Business Forum in Perth sounded a decidedly upbeat note about the future of trade with China despite looming uncertainty about the global economic picture as Europe grapples with its sovereign debt crisis.

Australian CEOs said they weren't worried about a major slowdown in China on the sidelines of the Commonwealth Business Forum in Perth.
Tony Ashby|AFP|Getty Images
Australian CEOs said they weren't worried about a major slowdown in China on the sidelines of the Commonwealth Business Forum in Perth.

Speaking to CNBC on the sidelines of the event, ahead of this weekend's Commonwealth Heads of Government meeting, CEOs from across various sectors of the Australian economy, gave their thumbs up to the work China is doing to engineer a soft landing.

Nev Power, the newly installed CEO of iron ore giant Fortescue Metals said the company is ramping up production as it predicts many years of robust Chinese demand.

While he acknowledged policy makers in China were working to slow the country's red-hot economy he says the signals Fortescue is receiving on the ground show the country's appetite for iron ore is showing no signs of slowing down.

"We're very upbeat on China and while the situation in Europe may rattle some nerves, this will likely only have a temporary impact on prices. Weaker prices are based around financial market uncertainty not physical demand," Power told CNBC. (Watch his interview here.)

The Premier of Australia's resource rich state Western Australia is also upbeat on China.

When asked by CNBC if the state was preparing for an end to the best terms of trade the country has seen in a century Colin Barnett said he didn't believe the current trend of sky high commodity prices was a boom.

The Premier, who recently returned from a brief visit to China said both India and China are set to transform over the coming years and Western Australia is well placed to take advantage of that.

But Colin Barnett warned against hasty policy decisions by the Federal Government that could alienate China.

Australia's Finance Minister Penny Wong told CNBC at the same meeting that the global economy is undergoing a structural shift where the West is turning to the East and where China will be the epicenter of the global economy.

The Finance Minister rejected suggestions Australian policy decisions like the carbon tax and Mineral Resources Rent Tax had stymied investment into the country.

"Look at the investment pipeline Australia has, this has not altered as a result of the MRRT or the carbon tax."

But the CEO of gold producer AngloGold Ashanti Mark Cutifani told CNBC at the forum that he's not worried about investment decisions for the next five to ten years, but rather for projects significantly down the track.

Mr Cutifani says the decisions made over the past three years by the Rudd and Gillard governments have done a lot of damage to Australia's international reputation. (Watch his interview here.)