CHINA’S economic growth has slowed, prompting some so-called experts to claim that its economy will collapse. When coupled with the global downturn, this paints a gloomy picture. However, while there are some problems, China’s economy is not about to collapse as the government has deliberately slowed growth to achieve economic transformation and upgrade through a more sustainable growth rate.

In addressing Melbourne Mining Club recently, China Mining Association executive vice-president Wang Jiahua said he believed the Chinese economy has the following characteristics: “China’s 5000 years of civilization, heritage and tradition still have a large influence even in today’s industrialized age. Once 1.3 billion people reach consensus, the power will be incredible.

“Looking through the history of China’s economy, there have been periods of rapid development and of economic recession but overall there are signs of strong self-adjustment and recovery capabilities. The Chinese cultural features of knowledge, truthfulness, morality and compassion provide the foundation for economic adjustment and development which is why when Westerners look at China’s economic phenomenon it may appear to be similar to a Western economy on the surface, but deep down it is not, which leads to confusion and an inability to understand the term ‘Socialism with Chinese characteristics’.

“In my opinion, China’s economic development model is a ‘West meets East’ model, just like combining Western medicine with traditional Chinese medicine to treat illness. The latter is good to treat the cause of the illness and the former is effective in relieving the symptoms fast,” Wang Jiahua said.

Understanding these characteristics provides the rest of the world with a more sensible view of what is happening in China and how this influences the mining industry now and into the future. Supporting this confidence are recent statistics.

China’s investor confidence rose to a 7-month high in September due to signs of stabilizing in the economy and improved confidence in market prospects, according to a survey by China Securities Investor Protection Fund Corporation. It shows September’s Investor Confidence Index stood at 58.5 on a scale of 100, representing optimism among investors and up 17.71% month-on-month, or 24.73% year-on-year. The domestic economic fundamentals index rose 18.9 points from the previous month to 65.8 points, the survey showed, citing upbeat major economic indicators, including consumer price, producer price and purchasing managers’ indices, that all point to a firming economy.

China’s outbound FDI rose 17.6% year-on-year in 2012 to a record of $87.8 billion, according to the 2012 Statistical Bulletin of China’s Outward Foreign Direct Investment. Global ODI slid 17% last year, amid uncertainties confronting the world economy. China’s increase made the nation the world’s third-largest investor last year after the US and Japan, for the first time since the country began to release the data a decade ago.

The renminbi’s function in international trade is moving from a settlement currency to an investment currency, according to a senior manager of the Society for Worldwide Interbank Financial Telecommunications. A report from the society indicates the renminbi is in eighth place as a global transaction currency, one place higher than on a list from the Bank for International Settlements in early September. The renminbi’s rising status is on a par with its presence in international payment and financing, says the society’s head of markets, Asia Pacific, Patrick de Courcy. The currency is being used more widely in trade settlement and is particularly active in offshore markets, he adds.

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Sylwia Pryzbyla, Editor

Sylwia Pryzbyla
Editor, ASIA Miner and Australian Editor, E&MJ
[email protected]

Sylwia Pryzbyla has more than two decades of experience in media and publishing industries.