Australia must tackle lack of competitiveness — Rio Tinto
On Monday Rio Tinto's (LON, ASX:RIO) managing director for China said that he remains confident that resource demand will continue to grow despite China's efforts to cool its economy, but the company warns that Australia might miss the “Asian century” boat.
"While we should not expect demand to grow at the blistering pace we have seen over the last decade, nevertheless growth in demand will still be substantial," said Ian Bauert during the In The Zone Conference in Perth, Australia.
Despite moves towards a more consumption-oriented economy, China needs to prioritize the development of the country's western provinces and regions, said the executive and that by shifting to value-added manufacturing, Beijing would also support demand for minerals and metals.
Homework to do
During his presentation Rio’s Bauert also referred to Australia’s past, highlighting how the country became the most expensive place for the company, after being the cheapest five years ago.
The executive said Australia has to correct serious shortcomings, such as competitiveness, productivity, infrastructure investments and foreign capital attraction, reported Financial Review.
Bauert warned authorities that, unless the focus of future debate is on addressing such issues, Australia is likely to fall behind and seriously underachieve its potential in the Asian century.
Rio Tinto is the number two supplier of iron ore to China behind Brazil's Vale and the commodity is responsible for the bulk of the Anglo-Australian giant's profits.
Photo of Ian Bauert, courtesy of the University of Queensland.